7-15-12 Gft v Fyrom Icsid Request

7/22/2019 7-15-12 Gft v Fyrom Icsid Request

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Before the

INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENTDISPUTES

__________________________________________________________________

GUARDIAN FIDUCIARY TRUST, LTD, F/K/A CAPITAL

CONSERVATOR SAVINGS & LOAN, LTD

Claimant

v.

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA

Respondent

Request For Arbitration Proceedings

Counsel for the Claimant:Juan F Torres III, Esq.Juan F Torres III, P. A.4900 Oleander AvenueFort Pierce, Fl 34982772-672-5200 (telephone)772-293-9017 (telefax)

` Petro Janura, Attorney at lawAdvocate Petro JanuraOrce Nikolov 94Skopje, Macedonia0038970228619


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Dated:

TABLE OF CONTENTS

Page

I. SUMMARY OF THE DISPUTE.....3II. PARTIES TO THE DISPUTE5

A.Organizational Structure, Control and Nationality.......6B.Other Relevant Entities.....8

III. ICSID JURISDICTION........9 A. The ICSID Convention and (Bilateral Investment Treaty)

Agreement Between The Former Yugoslav Republic of

Macedonia and the Kingdom of The Netherlands.................9

B. Consent to ICSID Jurisdiction..12

1. The Respondents Consent Expressed in theAgreement Between the Kingdom ofThe Netherlands and FYROM....12

2. The Claimants Consent13IV. RELEVANT FACTS OF THE INVESTMENT DISPUTE..13

A. The Claimants Investments In The Former Yugoslav

Republic of Macedonia26

B. Respondents Actions ...........................28


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C. Consequences of Respondents Actions..34

V. CLAIMS38VI. REQUEST FOR RELIEF....42

REQUEST FOR ARBITRATION

Claimant, Guardian Fiduciary Trust, Ltd, f/k/a Capital Conservator

Savings & Loan, Ltd, (hereafter, Claimant or GFT) hereby submits this

Request for Arbitration pursuant to Chapter IV, Section 1, Article 36, of

the Convention On The Settlement of Investment Disputes Between States

And Nationals Of Other States (hereinafter Convention) to resolve, by

means of arbitration administered by the International Centre for Settlement

of Investment Disputes (hereinafter ICSID) under Chapter IV, Arbitration,

Section 1, of the Convention, the following legal investment dispute with

the Former Yugoslav Republic of Macedonia (Respondent or FYROM):

SUMMARY OF THE DISPUTE

1. This dispute concerns the Respondents gross misconduct, gross negligenceand unlawful arrest of one of Claimants directors for money laundering

and illegal activities and statements made by Respondent connecting


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Claimant to said money laundering and illegal activities involving

Claimants substantial investment in FYROM when Respondent knew or

should have known that said statements were false. Respondent, publicly,

officially, through the news media, and through its official website, alleged

that Claimants Director, using only his initials, but using Claimants name

and the names of its related companies, laundered approximately

$30,000.000.00 USD (Claimants investment in FYROM) through a bank

in FYROM via Claimants non-resident account and its related companies

non-resident accounts and that said funds came from the United States and

were the source of frauds perpetrated on investors in the United States and

Great Britain. Said allegations will be set forth in detail in Section IV

below.1

In truth, neither the funds ($30,000.000.00 USD) invested through

FYROM in Claimants non-resident bank account nor the monies

($431,934.00 USD, comprised of four (4) wire transfers) which also went

through Claimants non-resident account subsequently alleged to be

laundered by Claimants former Director and used to convict said Director

were from frauds perpetrated on investors in the United States and Great

Britain.

2. Claimant made large investments by way of operating its trust financialservices business through a non-resident bank account in the largest bank in

FYROM from 2007 through 2009. In managing and operating their

investments, the Claimant relied on the guaranteed protections for their

rights and interests, including the commitment to treat said investments

1Factualallegationsmadehereinarebasedondocumentaryevidenceaswellasrepresentationofcorporate

employeesoftheClaimanttobepresentedindetailinSectionIVbelowandattheappropriatestageofthe

proceedings.Citationstosomeofthedocumentaryevidenceinsupportoftheallegationsmadehereinare

providedinappropriatesectionsherein.


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fairly and strictly in accordance with FYROM laws and a Bilateral

Investment Treaty (BIT). See footnote 3.

3. The actions and measures of Respondent gravely affected Claimantsbusiness and customer relations to such an extent that said actions were

tantamount to a wrongful expropriation of the investment and the returns2

made by the Claimant in FYROM, were a breach of FYROMs own laws,

breach of international laws, and a breach of FYROMs obligations under

the BIT3 to accord fair and equitable treatment to Claimants investment,4

among other violations of said BIT. Through these actions and measures the

Respondent indirectly expropriated the Claimants investments and profits

and returns, including the value of Claimants business and related assets

and operations in that Claimants operations virtually ceased as Claimant

could not find a company operating business account. The measures taken

by the Respondent against the Claimant violates FYROMs obligations

under its Bilateral Investment Treaty (BIT) with the Kingdom of the

Netherlands and principals of international law.

I. PARTIES TO THE DISPUTE

2UnderArticle1(d)oftheBITthetermreturnsshallmeanmoneyyieldedbyaninvestmentandinparticular,

thoughnotexclusivelytheprofit,theinterest,thedividends,compensationwithrespecttolicenses,aswellas

othersimilarcompensation.3TheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandtheKingdom

oftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT)4ThespecificbreacheswillbesetforthintheSectionIVbelowandsetforthintheappropriatestageofthe

proceedings..


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4. Claimant, GFT, is a trustee company and registered financial servicesprovider, incorporated and regulated pursuant to the laws of New Zealand.

GFTs main headquarters are in New Zealand with administrative offices in

Uruguay and Serbia. GFTs address is Level 2, The Public Trust Building,

442 Moray Place, PO Box 3058, Dunedin, New Zealand 9016.

5. The previous name of GFT was Capital Conservator Savings & Loan, Ltd.That entity was incorporated and qualified as a trustee company pursuant to

the laws of New Zealand, headquartered in New Zealand, with an

administrative office in Uruguay and a European Representative Office in

Serbia. After it re-registered in New Zealand as a trustee company under the

name GFT the law in New Zealand changed, and it registered as a financial

services provider.

A.Organizational Structure, Control, and Nationality

6. Guardian Fiduciary Trust Limited, (GFT) formerly known as CapitalConservator Savings & Loan, Ltd., is a Trustee Company and Registered

Financial Services Provider, incorporated and regulated pursuant to the

laws of New Zealand. It was incorporated on 16 July 2007.

7. GFT is wholly owned by Capital Conservator Trustees, Ltd., a TrusteeCompany, incorporated and registered pursuant to the laws of New

Zealand. It was incorporated on 17 September 2008.


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8. Capital Conservator Trustees, Ltd. is a wholly owned subsidiary of In AssetManagement, Ltd. a company incorporated and registered pursuant to the

laws of New Zealand. It was incorporated on 22 May 1995.

9. In Asset Management, Ltd., is wholly owned by Stichting Intetrust, a Dutchfoundation founded on 22 December 1988, having its registered office at

Velp (Gld), Netherlands. The founder and director of Stichting Intetrust is

Nicolas Jan Carol Francken. Stichting Intetrust is the owner and holder of

all the family interests of Nicolas Jan Carol Francken.

10.On 17 September 2008 Capital Conservator Trustees, Ltd. wasincorporated as a wholly owned subsidiary of In Asset Management, Ltd.

11.Capital Conservator Savings & Loan, Ltd., now renamed GFT, Ltd., wasincorporated and registered on 16 July 2007. And on 17 September 2008,

Capital Conservator Trustees, Ltd., acquired all of the issued shares of

Capital Conservator Savings & Loan, Ltd.

12.On 17 September 2008 Capital Conservator Trustees, Ltd. acquired all ofthe issued share capital of Capital Conservator Savings & Loan, Ltd. From

17 September 2008, Stichting Intetrust, through its wholly owned

subsidiary IN Asset Management, Ltd., and through its wholly owned

subsidiary Capital Conservator Trustees, Ltd., held all the shares and voting

rights in CCSL, Ltd., (now renamed GFT, Ltd.)


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13.In conclusion, Capital Conservator Trustees, Ltd., and all of its whollyowned subsidiaries are ultimately owned and controlled by Stichting

Intetrust of Velp (Gld) the Netherlands.

5

14.Therefore, for the purposes of this Request, GFT, Ltd., is a national of theNetherlands pursuant to Agreements On Encouragement and Reciprocal

Protection of Investments between the Macedonian Government and (the

BIT)6 and has standing to file this request pursuant to that BIT.

15.Since the Stichting Intetrust is a Netherlands registered foundation andwholly owns and directly and indirectly controls GFT. GFT is therefore a

National of the Netherlands which is a Contracting State for the purpose of

the ICSID Convention.7

B. OTHER RELEVANT ENTTIES

5AchartreflectingtheorganizationalstructureofGFTisannexedheretoinAppendixIA6SeetheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandthe

KingdomoftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT);SeeN5.7SeeICSIDConventionChapterII,JurisdictionoftheCentre,Article25,(2), National of another Contracting

State means:(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on thedate on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date onwhich the request was registered pursuant to paragraph (3)of Article 28 or paragraph (3) of Article 36, but does notinclude any person who on either date also had the nationality of the Contracting State party to the dispute; and(b)any juridical person which had the nationality of a Contracting State other than the State party to the dispute on thedate on which the parties consented to submit such dispute to conciliation or arbitration and any juridical personwhich had the nationality of the Contracting State party to the dispute on that date and which, because of foreigncontrol, the parties have agreed should be treated as a national of another Contracting State for the purposes of this

Convention .andtheBIT.SeealsoArticle1(b)IIIoftheBIT.


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16.Bank of America (BOA) is a bank incorporated pursuant to the laws ofNorth Carolina and registered and conducting business in New York

17.Michael S. Krome (Krome or MSK) is a United States citizen, a resident ofthe State of New York and was an attorney licensed to practice law in New

York.

18. Borko Markovic (Markovic) was a former director of CCSL,

and the shareholder, sole owner and director/authorized person, of Capital

Conservator DOOEL (hereinafter CC DOOEL). He is a citizen of

Montenegro, and at the times herein was a legal resident of the Oriental

Republic of Uruguay.

19. CC DOOEL is a limited liability company incorporated,

registered and regulated pursuant to the laws of the FYROM.

20. The United States Securities and Exchange Commission

(SEC) is a federal agency created by the Securities Exchange

Act of 1934 (15 U.S.C. 78d).

II. ICSID Jurisdiction

21. As explained below, ICSID has jurisdiction over this investment dispute

under the Convention on the Settlement of Investment Disputes between

States and Nationals of other States (the ICSID Convention).8 The Claimant

and the Respondent have expressed their consent to ICSID as they are

8TheConventionoftheSettlementofInvestmentDisputesbetweenStatesandNationalsofotherStatesmadein

Washington,D.C.18March1965,inforcesince14October1966(hereinafterICSID).


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Contracting States of the ICSID and through the Bilateral Investment Treaty

between FYROM and the Kingdom of the Netherlands, (the BIT).9

A.The ICSID Convention and Agreement Between The FormerYugoslav Republic of Macedonia and The Kingdom of The

Netherlands (The BIT)

1. The Netherlands and the FYROM are both parties to the ICSID

Convention.

2. The Kingdom of Netherlands signed the ICSID Convention on

14 October 1966.

3. The FYROM signed the ICSID Convention on7 July 1966.

22. Under Chapter II, Article 25, of the ICSID Convention, the ICSID has

jurisdiction over any legal dispute arising directly out of an investment,

between a Contracting State to the ICSID Convention and a National of

another Contracting State to the Convention if both parties to the dispute have

consented in writing to submit the dispute to ICSID.10

23. The Agreement On Encouragement and Reciprocal Protection of

Investments Between the Macedonian Government and the Government of the

9TheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandtheKingdom

oftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT)10

SeeChapterIIArticle25oftheICSIDConventionandfootnote11belowandparagraphsA5through14above.


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Kingdom of the Netherlands signed at Washington on 18 March 1965,

(hereinafter the BIT), is a bilateral investment agreement wherein each State

consents to the jurisdiction of the ICSID in the event of a legal dispute arising

between that Contracting State and a national of the other Contracting State

concerning an investment of that national in the territory of the former

Contracting State.11

24. As stated above, GFT is a National of the Kingdom of the Netherlands for

the purposes of the ICSID Convention and the Bilateral Investment

Agreement because it is a legal entity controlled by a Netherlands legal entity,

Stichting Intetrust.12 See footnotes 9 and 10 above.

25. The Claimant held direct investments in the territory of the FYROM

within the meaning of, and economic activity described in, Article 25 of the

ICSID Convention, as well as within the meaning of the BIT.

a. Article 1 of the BIT states as follows:For the purposes of this Agreement:

i. The term investments means every kind of asset and moreparticularly, though not exclusively.

11Article9oftheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaand

theKingdomoftheNetherlandssingedatSkopje,FYROMon7July1998.(theTreaty)statesEachContracted

Statehereby

consents

to

submit

any

legal

dispute

arising

between

the

Contracting

State

and

anational

of

the

otherContractingStateconcerninganinvestmentofthatnationalintheterritoryoftheformerContractingState

totheInternationalCentreforSettlementofInvestmentDisputesforsettlementbyconciliationorarbitration

undertheConventionontheSettlementofInvestmentDisputesbetweenStatesandNationalsofotherStates,

openedforsignatureatWashingtonon18March1965.AlegalpersonwhichisanationalofoneContractingState

andwhichbeforesuchadisputearisesiscontrolledbynationalsofotherContractingStatesshall,inaccordance

withArticle25(2)(b)oftheConvention,forthepurposesoftheconventionbetreatedasanationaloftheother

ContractingState;signed07July1998.12

SeetheBIT,Article1(b)(III).


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1. Movable and immovable property as well as any otherrights in rem in respect of every kind of asset;

2. Rights derived from shares, bonds and any other kindsof interests in companies and joint ventures;

3. Claims to money, to other assets or to any performancehaving an economic value;

4. Rights in the field of intellectual property, technicalprocesses, goodwill and know-how;

5. Rights granted under public law or under contract,including rights to prospect, explore, extract and win

natural resources.

26.The details of claimants investment in FYROM will be described in PartIV of this Request for Arbitration.

27.The Claimants investments in using operating bank accounts in FYROMevidence their interests in the fact of exclusively using FYROM and the

largest bank in FYROM for its operation.

28.The dispute described herein is a legal dispute arising directly out of theClaimants investment in FYROM, as explained in Part IV.

A. Consent To ICSID Jurisdiction29.The Claimant has expressed its consent in the letter to Respondent

described and annexed hereto as Exhibit __. Additionally, the claimant

consents to ICSID jurisdiction pursuant to the BIT attached and described

herein. Respondent also has expressed its consent in the BIT. The


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Claimant has expressed its consent in the letters annexed herein as

Exhibit__ and ratifies its consent by filing this Request for Arbitration.

1. The Respondents Consent Expressed in the BITbetween the Kingdom of the Netherlands and

FYROM.

30. As stated in footnote 11 above, Article 9, of the BIT between the partiesprovides for the settlement of disputes through ICSID arbitration and states

as follows:

A. Each Contracting State hereby consents to submit any legal disputearising between the Contracting State and a national of the other

Contracting State concerning an investment of that national in the

territory of the former Contracting State to the International Centre for

Settlement of Investment Disputes for settlement by conciliation or

arbitration under the Convention on the Settlement of Investment

Disputes between States and Nationals of other States, opened for

signature at Washington on 18 March 1965. A legal person which is

a national of one Contracting State and which before such a dispute

arises is controlled by nationals of other Contracting States shall, in

accordance with Article 25(2) (b) of the Convention, for the purposes

of the convention be treated as a national of the other Contracting

State.

B.By the very nature of FYROM entering into this Agreement with theKingdom of the Netherlands, it has ratified its consent to ICSID

jurisdiction for arbitration to resolve the legal investment dispute

herein.

C.Pursuant to the spirit of the ICSID Convention Claimant, by letter dated_____________, mailed a rough draft (note the Request provided to


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Respondent has been modified to the present Request) of a Request For

Arbitration to Respondent with the intent to amicably settle this claim

(negotiate) and determine whether they agree to ICSID arbitration

(jurisdiction). Claimant even provided a translated version of the rough

draft of said Request to the Respondent.

2. The Claimants Consent

31. The Claimant has consented to the ICSID jurisdiction of this dispute

by letter from In Asset Management/Nicolas Jan Francken/Stichting

Intetrust dated 15 April 2012 to counsel authorizing counsel to proceed

with ICSID arbitration, by the BIT, and by the said authorized consent of

GFTs directors and controlling entity (Stchting Intetrust) national of the

Netherlands and contracting State to the ICSID and to the BIT. Said

consent is attached hereto as Exhibit __.

IV. RELEVANT FACTS OF THE INVESTMENT DISPUTE

32. As a New Zealand-qualified Trustee Company and Registered

Financial Services Provider, GFT formerly, CCSL provides fee-based

private trust and wire financial services, private major high- limit

traditional and nontraditional Mastercard debit cards, private on-line

trading and private gold and precious metal purchases -- all through

licensed and regulated banks, credit card issuers, gold repositories and

brokerages. Its trust and trust financial services business are based on

complete trust, and the trustful operations and professionalism of said

business is its cornerstone. Additionally, CCSL provides company


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formation services in many jurisdictions, as well as multi-jurisdictional

business structures and investment accounts held in trust for its clients also

through license registered and regulated firms and trust of said business is

also its cornerstone.

33. After an intensive worldwide research of countries with large banks

advertising and appealing to foreign businesses to invest in their countries

with favorable business treatment, GFT determined that FYROM and its

largest bank, Stopanska Banka, Skopkje (hereinafter SB) both contained

the ideal business environment for Claimants business. GFT determined

that FYROM was one of the few countries and worldwide that allowed a

company such as GFT to perform the full range of services that it was

authorized to provide pursuant to its registration in New Zealand. GFT

contacted SB to inquire if SB could provide GFT with accounts in multiple

currencies through which wire sending and receiving services could be

provided for GFTs trust clients.

34. GFTs engaging in these arrangements was authorized by NewZealand law, and its business actions were authorized by SB and by

FYROM law. Toward this end, GFT provided SB with its New Zealand

Certificate of Incorporation, Constitution (which clearly sets forth the

services GFT provides and would provide through SB), a legal opinion

from a New Zealand law firm, GFTs Anti-Money Laundering and Know

Your Client Procedures, and complete due diligence on the principals of

GFT, for SBs examination and approval. GFT relied upon and specifically

chose FYROM and SB because GFT could conduct its business activities in

FYROM, and SB would provide all of the aforementioned activities

requested by GFT. Other reasons why SB in FYROM was chosen were that


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FYROM allowed SB to provide GFT with the following services: (i) had

key U.S. dollar accounts, trading in United States dollars, with three (3) of

the largest banks in New York; (ii) was the largest bank in the FYROM; (iii)

was a member of the NBG Group, the largest banking group in Southern

Europe; (iv) was a leading bank in FYROM in its national banking market

concerning international payments in several currencies; (v) was an

institution within FYROM with a high rating within the sphere of

international payments; (vi) FYROM allowed SB to provide commercial

payments for non-residents and legal entities; (vii) had a professional

experienced staff that provided prompt and quality performance of

international wires, servicing customers professionally; and (viii) due to

FYROMS incentive laden business environment SB had very competitive

service fees, and special discounts for international good standing customers

as required by FYROM. Most importantly, FYROM allowed SB to provide

same day transfer/wire orders in favor of non-resident businesses at the

moment of receiving an order from its client.

35. On November 5, 2007, GFT, under its former name, and SB executed

a contract for a non-resident foreign currency account and non-resident

MKD Denar account in the name of CCSL, now GFT. As requested by

CCSL, the contract between CCSL and SB was drafted by SB in English.

36. Said contract was written by SB to provide CCSL with the

aforementioned banking services in FYROM.

37. CCSL, being a New Zealand qualified Trustee Company, was

required by FYROM and SB to open a non-resident foreign account and a

non-resident Denar account (MKD account).


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38. Once the account at SB was opened, CCSL deposited in excess of

$100,000.00 into it.

39. Upon opening the non-resident account, the business relationship

between CCSL and SB commenced. SB and FYROM were fully aware of

the type of services CCSL provided to its customers, and that it was a

qualified trustee and financial services provider.

40. CCSL operated its financial account wire sending and receiving

services in FYROM through the nonresident foreign currency accounts with

SB for approximately two years. During the course of these two years, over

$30,000,000.00 USD passed through said accounts. These funds were

infused through the FYROM economy via SB. The business relationship

between the parties was a very positive one to the extent that SB even

provided a Letter of Reference for CCSL to use in establishing additional

financial accounts at other banking institutions and encouraged CCSL to

bring on higher end clientele.

41. On June 11, 2009, without any reasonable notice, explanation, or

cause, SB emailed a notice to CCSL stating that all of CCSLs accounts

would be closed as of June 12, 2009. The notice was also sent to CCSL by

international mail.

42. To the best knowledge and belief of Claimant, the SEC began an

investigation of Krome/MSK and their bank accounts and wire transfers in

or around 2009.

43. In or around September, 2009, long after the last of the wire transfers

discussed above, CCSL learned of the United States Securities & Exchange

Commissions (hereinafter SEC) investigation of MSK/Krome and their


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accounts and wires. In order to cooperate with the SEC investigation,

CCSLs president, R. David Finzer, telephoned the SECs office that was

conducting the investigation, to offer CCSLs full cooperation. Mr. Finzer

spoke with Alberto Arevalo, Assistant Director and Richard Thatcher, Esq.,

Investigating Attorney. On the same day, Assistant Director Arevalo and

Attorney Thatcher called CCSL back to discuss the means by which CCSLs

cooperation could be best effectuated. During that conversation, Mr. Finzer

requested a subpoena from the SEC. Said conversation was memorialized in

a fax sent to these officials on September 12, 2009. Pursuant to the SECs

request, CCSL hired an attorney in the United States, Shayne R. Kohler

(Kohler), and authorized Kohler to accept a Subpoena from the SEC.

44. The SEC issued the subpoena. CCSL thereafter completely, totally,

and openly cooperated with the SEC, which was investigating, the wires, in

conjunction with the FYROM SEC and other FYROM authorities.

A. The SEC also contacted the FYROM SEC with respect to the

funds that were transferred from MSK/Krome account in BOA in the

United States to SB. A letter from the Securities and Exchange

Commission of the Republic of Macedonia to the Office for

Prevention of Money Laundering and Financing Terrorism of the

Republic of Macedonia dated 24 August.2009, establishes that

FYROM was directly contacted by the SEC. The letter from the US

Securities and Exchange Commission to the Securities andExchange Commission of the Republic of Macedonia notifies

FYROM that the US Securities and Exchange Commission is

conducting an investigation and is asking for cooperation in said

investigation for a possible Fraud perpetrated against


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shareholders upon the sales of shares, who reported it to the US

Securities and Exchange Commission, wherein a part of the funds

allegedly went to one of the non-resident accounts of Capital.

Conservator Savings & Loan with Stopanska Banka AD Skopje,.

45. CCSL requested SB to provide CCSL with the SWIFT confirmations

regarding the aforementioned wires so that CCSL could conduct due

diligence on them pursuant to CCSLs Anti-Money Laundering Policies, and

in order to comply with CCSLs obligations under New Zealands Anti-

Money Laundering Legislation, to comply with FYROM laws, as well as to

provide the information to the SEC requested in its subpoena. SB refused to

comply with CCSLs request for cooperation and disclosure.

46. SWIFT stands for Society for Worldwide Financial

Telecommunication (SWIFT). It operates a worldwide financial messaging

network that exchanges messages between banks and other financial

institutions. SWIFT sends payment orders that must be settled via

correspondent accounts that institutions have with each other. To exchangebanking transactions, each financial institution must have a banking

relationship by either being a bank or affiliating itself with another bank.

SWIFT is a cooperative society incorporated in Belgium and owned and

operated by its member financial institutions for their mutual benefit.

47. Eventually, the SEC expressed its gratitude for CCSLs cooperation

and stated that it had no further need for cooperation from CCSL. At notime did the SEC ever suggest or indicate that CCSL had engaged in any

wrongdoing.


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48. Similarly, the FYROM authorities officially recognized that CCSL

fully cooperated with the United States SEC. But this statement was never

placed in the official Ministry of Interior of FYROM website.

A. At the main hearing in the criminal procedure against Markovic,

held on 12 October 2009, the Main Prosecutor stated in the minutes

that the evidence produced in the case was obtained from the US

Securities and Exchange Commission and that since the

commencement of the criminal procedure Capital Conservator offered

to cooperate and made available to the US SEC the entire

documentation thereof, wherein a part of the documentation

was gathered owing to the cooperation with Capital Conservator,

due to which he proposed that, if the court should find Borko

Markovic guilty, it should consider this circumstance as an

extenuating one upon the determination of the sentence.

49. On or about 31 August 2009, the FYROM authorities, the Ministry

of Interior, in conjunction with the Office of Prevention of money

Laundering and Financing Terrorism, the Prosecutors Office of Organized

Crime and Corruption, arrested Markovic, then a director of CCSL, for

money laundering in the amount of thirty million dollars ($30,000,000.00

USD). In contrast to this enormous sum, Markovic was subsequently

charged and convicted by the FYROM authorities of money laundering in

the amount of $431,943.00 USD, the same amount that Krome transferredand that the SEC was investigating.

A. On or about 2 September 2009, the Ministry of Interior of

FYROM stated, in its news release, in their official website and to the


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news media that CCSL, all of its related companies which had bank

accounts at SB, and their former director BM had laundered

around $30,000,000.00 USD of illegal funds coming from

different countries. A copy of said web page is annexed hereto as

Exhibit __. It is important to note here that the Claimant was never

charged with a crime. But the language used by the Respondent in

undermining the operations of the Claimant, by specifically using and

mentioning Claimants name and those of its related companies infers

the Claimant was, indeed, involved in illegal activities (e.g. money

laundering). In said statement Respondent used Claimants name and

that of its related companies, whereas with Claimants former

director, Markovic was mentioned only by his initials and thus

according more favorable treatment to him than to Claimant.

B. In official proceedings under the investigative stage of the

proceedings the State asserted the following:

Under the Decision of the investigation judge I KIOK 54/09 dated

01.09.2009 it was decided to start an investigation and to hold the

defendant in custody. In the Decision it was stated that in the period

from, November 2007 until August 2008 in Skopje, Republic of

Macedonia, as the person authorized for several non-resident bank

accounts with Stopanska Banka AD Skopje of the legal entity Capital

Conservator Savings & Loan Limited from New Zeeland and as themanager and owner of the legal entity Capital Conservator DOOEL

Skopje and the signatory of the account of the legal entity Capital

Conservator DOOEL Skopje, he [BM] received, transferred and

obtained money in a total amount of $30 million, originating from a


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criminal act of fraud perpetrated in the USA and other countries.

Among the many transactions stated in the Decision of the

investigation judge, it was also stated that he received $431,943.00 via

related transactions thereafter that money was converted and

transferred to the accounts of other legal entities abroad, among which

also Capital Conservator Savings SA Uruguay and USA.An official

copy of said hearing is attached hereto as Exhibit .

C. In the Indictment stage of the proceedings held on 27 November

2009 Markovic was charged on a lesser crime under Article 4 of the

Criminal code, which could punish the accused up to three (3) years

of imprisonment not the original $30 million USD with the amount of

the crime changing from the $30 million USD, to $431,934.00; it also

alleged [t]he description of the prior criminal act (sic) perpetrated

abroad corresponds to the text of the description given by the [SEC].

An official copy of said hearing is attached hereto as Exhibit __.

D. In the Summary Proceeding of Markovic dated 10 December

2009, a hearing was scheduled pursuant to the provisions on summary

proceedings, in accordance with the Code of Criminal Procedure of

the Republic of Macedonia, having regard to the fact that it is an act

for which a sentence for a short period of imprisonment is issued

(Defendant was charged for a criminal act money laundering and

other proceeds from a criminal act, as per Article 273 paragraph 4of the Criminal Code. The amount of the crime and punishment was

less than the original charge).


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1.In the explanation of the Judgement it is stated that thedefendant is guilty because in the period from November 2007

until August 2008, in Skopje Republic of Macedonia, as an

authorized person employed at Capital Conservator Savings

& Loan Limited from New Zeeland, on behalf of the legal

entity, he opened and was the signatory of a non-resident

account in various foreign currencies, among which also the

account USD with Stopanska Banka AD Skopje, through

which, in contravention of the regulations on banking

operations of the Republic of Macedonia according to which

banking activities may be performed solely by foreign and

domestic banks or the subsidiaries thereof that obtained a

permit from the Governor of the NBRM, he performed banking

financial activities and concurrently, on four occasions,

received and took over money in a total amount of $431,943.00

which was transferred from the accounts of Michael S. Krome

with Bank of America and which originated from an act of

crime - fraud against clients from Great Britain who were

mislead by means of a false presentation of facts by the legal

entities KLEIN AND VAN ZANDT regarding the status and

the value of the stock market shares, to the detriment of their

property, whereupon they effectuated payments to escrow

accounts of Michael S. Krome in the USA, from which he

made a payment, while the legal entity Capital Conservator

Savings & Loan took over the funds on the non-resident

account with Stopanska Banka AD Skopje from which, with a

loan alongside the other proceeds, they were transferred to the


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24

resident account of the domestic legal entity Capital

Conservator DOOEL Skopje. An official copy of said hearing

and judgment are attached hereto as Exhibit .

E. In fact the funds ($431,934.00 USD) used to convict Markovic

and said to have been laundered through CCSL were clean funds

totally unrelated to any illegal activities. As previously stated these

funds had been in the escrow account of MSK wherein he held funds

of multiple clients including CCSLs clients Threlkeld and Bailey as

well as others i.e. Klein and van Zandt. And the funds herein were

not found to come from a criminal act of money laundering, fraud or

any other illegal activity.

50. The events giving rise to the actions of FYROM involved the funds

alleged in paragraph 51 below were initially located, to the best knowledge

and belief of Claimant, at Bank of America NA, Lake Grove, New York, in

escrow accounts of MSK. The funds were held in MSKs escrow accounts

for the benefit of two persons: Clinton Hayes Threlkeld, a United States

citizen, and David Bailey, a British citizen. At that time, both of them were

customers of Claimant and resided in Spain.

51. On September 17, 2008, October 24, 2008, March 19, 2009 and May

$22, 2009, Krome or MSK wired the following amounts in USD currency:

$28,943.00, $3,000.00, $100,000.00, and $300,000.00, respectively, from

MSKs escrow accounts at BOA in New York to the CCSL account at SB.

Krome or MSK wired these funds to CCSLs account at SB to be held in

trust and for the benefit of CCSLs aforementioned clients. CCSL neither

knew Krome nor MSK nor had any type of relations with either of them.


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54. Krome was subsequently indicted in the U.S. District Court for the

Southern District of Florida on counts of Conspiracy to Commit Securities

Fraud, Wire Fraud and Mail Fraud, Securities Violations, Wire Fraud and

Obstruction of Justice. A copy of said Indictment is attached hereto as

Exhibit __.

55. However, the aforementioned wires (totaling $431,494.00 USD) and

funds that passed through CCSL were investigated by the SEC and

seemingly had no connection or relationship to the actions underlying

the Krome indictment, nor were they seized by the SEC or any other

United States law enforcement authorities. To CCSLs knowledge,

said funds were neither connected to any illegal activities nor derived

from illegal sources. They were legitimate funds held in trust by CCSL for

its clients, Clinton Hayes Threlkeld and David Bailey, neither of which to

CCSLs knowledge was investigated nor arrested. To CCSLs best

knowledge, Markovics arrest and subsequent conviction was unrelated to

Kromes indictment.

56. Unfortunately the news the FYROM authorities posted in their

official website that CCSLs director was arrested and convicted for being

involved in illegal activities and money laundering and that CCSL was part

of the chain of the money laundering companies severely affected the way

CCSL operated as a trust company and was forced to shut down its business

and lose clients, bank accounts, the ability to open bank accounts, and creditcard business due to the posting of these events in the official Ministry of the

Interior of FYROM website. Copies of texts from media from the internet

are attached hereto as Exhibit __.


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57. Eventually the monies that were in CCSLs account at SB were

transferred into the CC DOOEL resident account at ESB in accordance

with a loan agreement that was approved by the National Bank of Republic

of Macedonia, Attached hereto as Exhibit __ is a copy of the entire

procedure before the National Bank of Republic of Macedonia. The balance

of the funds that remained in CC DOOELs resident account at ESB was

confiscated by FYROM.

A. THE CLAIMANTSINVESTMENTS IN THE

FORMER YUGOSLAVIC REPUBLIC OF

MACEDONIA

58. While the Convention requires that the dispute arise "directly out of

an investment," it deliberately does not define the term. It is abundantly

clear that Claimant made a substantial commitment of more than

$30,000,000.00 USD and in other currencies through the largest bank within

FYROM territory which affected its economy in a positive and direct

manner and thus creating a substantial significance for FYROMs

development of its economy , a continuing expanding role in the banking

sector of FYROM and attraction of international businesses in FYROM

which has been a long standing goal of FYROMs allure of being a business

friendly nation for foreign companies to operate therein. This type of

investment is contemplated within the ICSID investment parameters and

within the parameters and, more importantly, definition of investments in

Article 1 of the BIT.13 Claimants investment, the funds passing through the

13Theterminvestmentsmeanseverykindofassetandmoreparticularly,thoughnotexclusively.


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non-resident account in SB was movable property and an asset within the

definition of investment of the BIT, Article 1 (a) (I); the said investment

involves a claim for monies and has a great economic value as per Article 1

(a) (III) of the BIT. Claimants investment, per Article 1 (a) (IV) of the BIT,

also includes its good will established by the Claimant (e.g. its brand name

Capital Conservator) while, as alleged above, infusing over $30 million

USD through said account in FYROM economy.

A. Claimant operated its trustee and financial services business

through FYROM via SB for over a two (2) year duration directly

infusing into the FYROM banking sector and economy over $30

million USD; as a result there was between the Claimant and

Respondent a regularity of profit and return, Claimant assumed the

risk of losing its operations within FYROM, and the significance to

the FYROM economy was evident both by the amounts passed

through it and by Claimant operating its business via SB in FYROM

and thus attracting more multinational companies to do the same as

(I) Movableandimmovablepropertyaswellasanyotherrightsinreminrespectofeverykindofasset;

(II) Rightsderivedfromshares,bondsandanyotherkindsofinterestsincompaniesandjointventures;

(III) Claimstomoney,tootherassetsortoanyperformancehavinganeconomic

value;

(IV) Rightsinthefieldofintellectualproperty,technicalprocesses,goodwillandknowhow;

(V) Rightsgrantedunderpubliclaworundercontract,includingrightstoprospect,explore,extractandwinnaturalresources.

SeealsoCHRISTOPHSCHREUER,THEICSIDCONVENTION:ACOMMENTARY(2001).


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Claimant, in effect, was aiding Respondents Business Friendly

country development.14

B. Due to the positive business relationship and circumstances

in FYROM and with SB, Claimant had made plans with

Markovic to form a local company to conduct business as a call

center clearing house to provide consulting services such as due

diligence, know your customer (KYC) and anti-money laundering

review and monitoring and provide said services to local companies

engaged in international business and foreign companies wanting to

invest in FYROM and that the resident company would be an

affiliated company to Claimant. The closing of Claimants account

precipitated the formation and registration of CC DOOEl, a resident

corporation, as it was done to expeditiously transfer funds in order to

operate Claimants business. This business plan was still in place after

the formation of the resident corporation but was completely halted

and interrupted by the actions and measures taken by Respondent. Notonly was the Capital Conservator brand named totally ruined, but

also Claimants director, Markovic, as part of his conditional sentence

in FYROM, would never be allowed back into FYROM.

C. All along Claimant assumed the risk that FYROMs currency

control and regulations could change and Claimants investment

would be diminished to zero. Furthermore, FYROMs regulationswith respect to the movement of monies could have changed due to its

economic and political policies. Additionally, Claimants reliance that

14CSchreuer,CommentaryontheICSIDConvention(1996),11ICSIDRevFILJ316,372.SeealsoCHRISTOPH

SCHREUER,THEICSIDCONVENTION:ACOMMENTARY(2001).Seealsoparagraph58above.


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it could provide the type of trust and financial services it was advised

Claimant could perform in FYROM could change thereby causing

claimant to lose its total investment, its profits and returns. And

finally Claimant assumed a systemic risk of the collapse of

FYROMs entire financial or market system wherein the foreign

exchange rates or implied volatility would change which would affect

the value of Claimants asset held in currency.

B. RESPONDENTS ACTIONS

59. Article 2, of the BIT states that [e]ach Contracting State shall,

within the framework of its laws and regulations, promote economic

cooperation through the protection in its territory of investments of

nationals of the other Contracting State. Subject to its rights of exercise

powers conferred by its laws or regulations, each Contracting State shall

admit such investments.

60. Article 3, of the BIT states as follows:

1) Each Contracting State shall ensure fair and equitable

treatment of the investments of the nationals of the other Contracting State

and shall not impair, by unreasonable or discriminatory measures, the

operation, management, maintenance, use, enjoyment, or disposal thereof


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by those nationals. Each Contracting State shall accord to such investments

full physical security and protection.

2) More particularly, each Contracting State shall accord to such

investments treatment which in any case shall not be less favorable than

that accorded either investments of its own nationals or to investments of

nationals of any third State, whichever is more favorable to the national

concerned.

3) If a Contracting State has accorded special treatment to

nationals of any third State by virtue of agreements establishing customs

unions, economic unions, monetary unions, monetary unions or similar

institutions, or on the basis of interim agreements leading to such unions or

institutions, that Contracting State shall not be obliged to accord such

advantages to nationals of the other Contracting Sate.

4) Each Contracting State shall observe any obligation it may

have entered into with regards to investments of nationals of the other

Contracting State.

5) If the provisions of law of the either Contracting State or

obligations of international law existing at the present or established

hereafter by the Contracting States in addition to the present Agreement

contain a regulation, whether general or specific, entitling investments by

nationals of the other Contracting State to a treatment more favorable than

is provided for in the present Agreement, such regulation shall, to the

extent that it is more favorable, prevail over the present Agreement.15

61. More importantly, Article 6, of the BIT States as follows:

Neither Contracting State shall take any measures depriving, directly or

15SeealsoArticle4oftheBITwhereinitstatesthateachContractingStateshallaccordtonationalsofthe

otherContractingStatewhoareengagedinanyeconomicactivityinitsterritory,treatmentnotlessfavorablethan

thataccordedtoitsownnationals.


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31

indirectly, nationals of the other Contracting State of their investments

unless one of the following conditions are complied with:

a. The measures are taken in the public interests and under due

process of law;

b. The measures are not discriminatory or contrary to any

undertaking which the Contracting State which takes such measures

may have given;

c. [T]he measures are taken in just compensation. Such

compensation shall represent the genuine value of the investments

affected, shall include interest at a normal or commercial rate, until

the date of payment and shall, in order to be effective for the

claimants, be paid and made transferable, without delay, to the

country designated by the claimants concerned and in the currency of

the country of which the claimants are nationals or in any freely

convertible currency accepted by the claimants.

62. As a Trust and Financial Services Provider, registered and regulated

under the laws of New Zealand, GFTs trust and trust financial services are

the cornerstones of GFTs business. Once FYROM posted the false

allegations in their official government website the damage to GFT was

irreversible and substantial.

63. The actions of FYROMs authorities in arresting GFTs former

director, (BM) Markovic, and subsequently including GFTs name and its

related company names in the official website in the internet and the news

media alleging that Markovic through GFT and its related companies

laundered around $30 million USD, knowing that it was false were

violations of the BIT, international law, and FYROM laws. Neither the

SEC nor any other law enforcement authorities determined that Claimants


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investment in FYROM (e.g. the $30 million USD and the total of the four

(4) wires totaling over $434,000.00 USD) were derived from a criminal

source or were monies derived from money laundering and were never

seized.

64. At the very least FYROM grossly, negligently and in violation of the

BIT and FYROM law posted the above statements as it knew that neither

GFT nor Markovic laundered around $30 million USD. As importantly,

Respondent also reported and used the amount of the four (4) wires,

$431,494.00 USD to, again, unlawfully convict Markovic and harmfully

affect Claimants trust and trust financial services and destroy its brand

name, CCSL.

65. Respondents actions as alleged in paragraphs 62 through 64 violate

Articles 2, 3, 4, 5 h)16

, and 6 of the BIT between the Netherlands and

FYROM.

A. The information that was spread in the media regarding

money laundering in an amount of $30 million and that stillcirculates today with respect to CCSL has caused severe

harmful consequences to the Claimant. Respondent either

intentionally or negligently harmfully acted against the

Claimant by initiating a criminal procedure for a severe crime

against Claimants director wherein all the funds said to be

illegal were not, in fact, of a criminal nature, but were clean

funds and for alleging that such a high amount of money,

$30 million, was derived from fraud and money laundering

16Article5oftheBITstatesthatTheContractingStatesshallguaranteethatpaymentsrelatingtoaninvestment

maybetransferred.Thetransfersshallbemadeinafreelyconvertiblecurrency,withoutrestrictionordelay.Such

transfersincludeinparticularthoughnotexclusivelyh)compensationincaseofexpropriationpursuanttoArticle

6.


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and directly caused substantial harmful consequences and

damages to Claimant and its investment in FYROM.

66. Neither the said wires nor any funds that were investigated by the

SEC had any connection or part of the Krome indictment, neither were they

seized by the SEC nor any other United States law enforcement authorities.

Said funds were neither connected to any illegal activities nor derived from

illegal sources. In fact, not even the FYROM authorities seized these funds.

Instead, they were legitimate funds held in trust by CCSL for its clients,

Clinton Hayes Threlkeld and David Bailey, neither of whom was indicted,

sued, arrested, prosecuted or otherwise charged by the SEC or any other

law enforcement authority.

67. RespondentviolatedArticle2oftheBITbynotprotecting

ClaimantsinvestmentinFYROM,i.e.ClaimantsoperatingaccountatSB

andthefundsthatpassedthroughsaidaccount. As stated above the

Respondent acted contrary to said Article by completely doing the opposite

and not protecting Claimants investment as Respondent illegally deprived

Claimant of its investment. Claimant could not continue to operate in

FYROM and lost its immediate business plan as Markovic could never

return to FYROM and CCSL and its employees and directors had and still

have a well grounded fear not to go into FYROM for fear of reprisals (e.g.

being falsely arrested and falsely charged like Markovic).

68. More particularly, Respondent has violated Article 3 subsection 117 as

Respondents actions described above clearly show that it did not treat

171) Article 3, Each Contracting State shall ensure fair and equitable treatment of the investments of the nationals

of the other Contracting State and shall not impair, by unreasonable or discriminatory measures, the operation,


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Claimants investment fairly and equitably. More importantly, Respondent

impaired, by both unreasonable and discriminatory measures, Claimants

operation, management, maintenance, use and enjoyment and disposal of

GFTs investment in FYROM. In effect, Respondent directly, unreasonably

and discriminatorily interfered with GFTs operations and due to FYROMs

continuous actions and measures the damages incurred by Claimant

continued for over two (2) years and still continues today. In fact, the

domino effect of Respondents actions (e.g. posting the heretofore

mentioned media release in its Official Ministry of Interior website) in the

various media outlets are still affecting Claimants ability to open operating

bank accounts as Claimant cannot meet AML and KYC standards in todays

banking and financial industry.18

69. Respondent also violated Article 619, of the BIT by posting the above

referenced information in its official website and in the media; in effect,

Respondent took measures which directly and indirectly deprived

Claimant of its investment in FYROM. After Markovics arrest and theposting of the statements regarding Markovics and Claimants involvement

in alleged money laundering Markovic was ordered to leave FYROM and

management, maintenance, use, enjoyment, or disposal thereof by those nationals. Each Contracting State shallaccord to such investments full physical security and protection.18

Justrecentlyon30June2012anarticlewaspostedonthenakedcapitalism.comwebsiteparrotingRespondents

claimsthatClaimant,itsrelatedcompanies,anditsformerdirectorlaunderedover$30BillionUSDandthat

moniesweretransferredwithouttheappropriatedocumentation;wheninfacttheNationalBankoftheRepublic

ofMacedoniaapprovedanyandalltransfers.SeeExhibit__.19

Article6states:NeitherContractingStateshalltakeanymeasuresdepriving, directlyorindirectly,nationalsof

theother

Contracting

State

of

their

investments

unless

one

of

the

following

conditions

are

complied

with

a. Themeasuresaretakeninthepublicinterestsandunderdueprocessoflaw;

b. ThemeasuresarenotdiscriminatoryorcontrarytoanyundertakingwhichtheContractingStatewhich

takessuchmeasuresmayhavegiven;

c. [T]hemeasuresaretakeninjustcompensation.Suchcompensationshallrepresentthegenuinevalue

oftheinvestmentsaffected,shallincludeinterestatanormalorcommercialrate,untilthedateof

paymentandshall,inordertobeeffectivefortheclaimants,bepaidandmadetransferable,without

delay,tothecountrydesignatedbytheclaimantsconcernedandinthecurrencyofthecountryofwhich

theclaimantsarenationalsorinanyfreelyconvertiblecurrencyacceptedbytheclaimants.


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never return, and Claimant was completely precluded from operating in

FYROM as its employees and directors had a well grounded fear that

FYROM would retaliate against them as well and therefore could not go into

the FYROM.. Due to the said actions of Respondent, Claimants business,

which was growing by leaps and bounds, was reduced to just being barely

able to operate and suffered substantial losses and continues to lose monies

to this date. More particularly, the business plan between Markovic and

Claimant was totally foiled. The net effect of FYROMs actions was that it

expropriated Claimants investment therein. See Article 5 of the BIT.

70. Respondents continued actions and measures with respect to GFT

were not made under the best interests of the public since the actions taken

by FYROM had absolutely nothing to do with the public interest but with

Claimant, its director and its related residential company. Assuming

arguendo, that there is a public interest component to Respondents actions,

said actions went against the public interest as FYROM, in effect, without

due process of law, forced Claimant out of FYROM thereby directlyaffecting FYROMs economy and its banking and financing sector in that

the large sums of Claimants continued investments in FYROM were

extremely advantageous to FYROMs economy and thus the public.

71. Respondents measures were completely discriminatory in nature to

such an extent that GFT to this date cannot use its brand name Capital

Conservator as if it does it would have to shut down its operations due tothe fact that it cannot obtain an operating account to conduct its trust and

trust financial services due to the fact that under the Capital Conservator

name it cannot meet anti- money laundering standards and know your client

standards of banking institutions around the world.


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B.CONSEQUENCES OF RESPONDENTS ACTIONS

72. Claimants main source of revenue was derived from incoming

and outgoing wire services exclusively through international banks

that are licensed and regulated and that have SWIFT accounts. Prior

to the actions and measures of the Respondent, wire fees collected were

growing at an average rate of 93.63% per quarter. In the second quarter of

2009, which amounted to a 10 week quarter due to the account closure,

which was, to the best knowledge and belief of the Claimant, caused by

FYROMs orders and effectuated by SB, CCSL collected $133,947.25 USD

in wire fees. Once operations resumed in the name of a different company

at a different bank in a different country, there was a pent-up demand which

kept the wire fees collected near the same figure for the next few quarters.However, the damage done to CCSLs trust and trust financial services

severely hampered new client acquisition and existing clients who had lost

faith in the company began looking for other alternatives. These two

elements combined to devastate CCSL. First, and most obvious, was the

fall-off in new client acquisition. The average growth per quarter of new

account registrations was 37.92% in the 6 quarters leading up to the account

closure. However, immediately following the actions of SB, new account

registrations went down by 50% in quarter 3 of 2009 and fell another 25%

in quarter 4 of 2009. By the second quarter of 2010 - not even one full year

after the closing of the account new account registrations were down


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93.5% from quarter 2 of 2009 136 new accounts versus 2084 the year

prior. Not surprisingly, CCSLs loss of the ability to receive and send

wires for 6 weeks, and then the sudden change to a new name (necessary to

operate), a new country, and a new bank severely diminished the trust

existing clients had as well. As a result, as soon as existing clients were

able, many stopped using CCSL and its related companies. The first two (2)

quarters after the account closure saw diminished growth, and by quarter 2

of 2010, within one year after the SB closure, revenues were down 42% year

over year $77,000.00 USD versus $133,000.00 USD the year prior. One

year after that, quarter two (2) 2011 wire fees collected were only

$35,000.00 USD, off 74% of the quarter immediately prior to SBs actions.

73. Subsequently to the Claimants account closure, its funds were

deposited at ESB and were then temporarily transferred to First Fidelity

Trust AGs (FFT) account in Commerz Bank. FFT is a third-party Swiss

Trust Company. In June 2009, CCSL purchased SPT Swiss Private Trust

1975 AG, which was an existing Swiss Trust company for which anaccount was opened at Commerz Bank approximately thirty (30) days later

in order to send and receive bank wires on behalf of CCSLs clients.

CCSLs account was closed by Commerz Bank in January 2010, due to

FYROMs illegal arrest of its director and the allegations made by FYROM

that Claimant was involved in money laundering of $30 million USD and its

funds were of criminal origin.

74. Ultimately, CCSL was forced to use its credit card money

management accounts at CreditCard Services SAL, in Lebanon, in place of

a normal bank account, in order to continue to send and receive wires on


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behalf of its clients. In April, 2010, that account and the credit card program

were closed, again, due to the aforementioned actions of FYROM.

75. In May 2010, CCSL was able to open an account at CreditWest Bank

in the Turkish Republic of Northern Cyprus for incoming and outgoing

wires but eventually CreditWest Bank severely restricted CCSLs ability to

send outgoing wires; once again due to FYROMs actions regarding the

arrest of CCSLs former director, Markovic, and the statements of alleged

illegitimate sources of CCSLs funds.

76. In June 2010, CCSL had to change its name to GFT in order to

conduct all of its operations because, as a result of FYROMs actions, other

banks would not open accounts like the one at SB with the CCSL

name, or any company name with the words Capital Conservator in

it. GFT was and remains relegated to operating only a few investment and

brokerage accounts on behalf of CCSLs clients, having transferred all of its

credit card, and wire sending and receiving operations to an affiliated

company.

77. In August 2011, GFT and its affiliate companies were able to open

accounts at Piraeus Bank in Cyprus. At the onset of this new business

relationship between Piraeus Bank and GFT, problems again arose as a

result of FYROMs actions described above, and the accounts of GFT and

its affiliates were restricted with the intent to close all the accounts. In

addition, every transaction was manually inspected, costing GFT 250.00

Euros per month for each companys account.

78. Eventually GFTs accounts were restored to full normal status, and it

has since been operating as it did while it had its accounts at SB. However,


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as discussed above, as a result of the unlawful closing of CCSLs account,

it took CCSL over two years to finally find a commercial or universal bank

that would allow CCSL to provide the services CCSL is legally authorized

to provide under New Zealand law.

A. However once again GFTs operating account has been closed. As

of 12 April 2012 Piraeus Bank closed GFTs operating account; and

once again GFT finds itself searching for other banks that will allow

and accept the trust and financial services it provides to its customers.

To the best knowledge and belief of the Claimant the actions and

measures undertaken by Respondent were part of the cause

of this closure.

B. The actions taken by Respondent have taken such a strong

domino effect that to the current date Claimant is still experiencing

problems using its brand name, Capital Conservator or any of its

related or affiliated company names to open operating bank accounts

to conduct its trustee and financial service provider services.

79. FYROMs actions, as stated above, directly resulted in the loss to

CCSL of wire fees, opening account fees, credit card purchases, and credit

card funding fees. They have also resulted in significant additional

operations costs. They have resulted in loss of the ability to meet

established due diligence standards in the trust, finance, and banking

industries in the United States and around the world to the extent that it has

been nearly impossible to obtain new operating accounts for CCSL.

FYROMs actions have resulted in a loss of existing and future clients. And

very importantly, CCSL cannot, to this day, maintain an operating account


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in its own name due to FYROMs actions. As such, the conversion rate of

prospective clients into actual clients has diminished precipitously. This is

because, while the applicants apply for a trust account under the Capital

Conservator brand name, they are subsequently given wiring instructions

to send their trust account funds to an account with an entirely different

name, as Citibank and HSBC, among others, block all wire transactions with

the words Capital Conservator in them, even if said name is placed in

SWIFT Field 70, the sender reference line which identifies for the recipient

the purpose of the payment. Thus, CCSL cannot maintain an operating

account in its brand name as it had to change its name to GFT. But for

all of the actions of FYROM described above, Claimant would not have

incurred any of the damages as alleged herein.

V. CLAIMS

80. Claimant realleges paragraphs 60 through 80 as if fully set forth

herein as they form the part of Claimants Claim.

81. Respondent also violated FYROM laws as follows: Pursuant to

Article 9, Contract Law/Law on Obligations Everyone is obliged to

abstaining from activity that could cause damage to another. Additionally,

Pursuant to Article 187 paragraph 1 of the Contract Law/Law on

Obligations A person who undermines another persons honour and states

or conveys false allegations regarding the past, the knowledge, the

capability thereof or any other aspect thereof, and who knew that such


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allegations are false and thereby causes a material damage, shall be obliged

to compensate for the damage caused."

82. Respondent knew that the amount being investigated by the SEC was

not $30 million USD as the evidence presented in the criminal case VIII

KOK No. 73/09, shows that a letter from the Securities and Exchange

Commission of the Republic of Macedonia to the Office for Prevention of

Money Laundering and Financing Terrorism of the Republic of Macedonia

dated 24August 2009, references a letter for the US Securities and

Exchange Commission to the Securities and Exchange Commission of the

Republic of Macedonia, which had been submitted prior to the

commencement of the investigation proceedings, and the amount mentioned

therein was not $30 Million USD. The amount used by FYROM to ruin

GFTs reputation was obtained from SB as that is the approximate

investment GFT made through SB and SB was the only entity apart from the

National Bank of Republic of Macedonia who knew the amount of

Claimants investment. Furthermore, the statements of the allegedlydeceived shareholders of the legal entity GREEN ENERGY LIFE in the

USA also support these allegations. It is more than clear that the Defendant

knew that the amount in question was not $30 million USD.

83. Pursuant to the Contract Law /Law on Obligations Article 142,

damage constitutes the reduction of another partys property (regular

damage) and prevention of the increase of such property (lost benefit).Pursuant to Article 178 paragraph 3 of the Contract Law of the Republic of

Macedonia, upon the assessment of a lost benefit, consideration should be

made of the benefit that would be reasonably expected based upon the

regular course of activities or based upon special circumstances, the


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acquisition of which was prevented by a harmful action, in this case by the

Defendant, the Republic of Macedonia.20

84. Pursuant to Article 189 paragraph 3 Contract Law /Law on

Obligations of FYROM, for undermining the right to a good reputation

and other personal rights of legal entities, the Court, if it finds that the

severity of the breach and the circumstances in the specific case provide a

sufficient justification, may decide to order the payment of a monetary

amount regardless of the damage indemnification, as well as in the absence

thereof. Accordingly, the Claimant requests the amount of $80 million USD

of the non-material damage.

85. Pursuant to Article 192 of the Contract Law /Law on Obligations

of FYROM, the Court, upon the request of the damaged party, shall decide

on a reasonable monetary amount also for a future non-material damage, if

according to the current course of events it is reasonable to anticipate that

the damage would endure also in the future.

A. The measures and actions taken by the Respondent are

continuing and ongoing since as of this date GFT cannot use its brand

name Capital Conservator and therefore it is more than reasonable

to anticipate that Claimants damages will endure and have endured in

the future. Accordingly, Claimant requests the amount of $70 million

USD in future non-material damage.

86. As heretofore stated, in the Summer and Fall of 2009 FYROM

wrongfully arrested, detained and convicted an officer of the Claimant and

20DuetoRespondentsactionsinunderminingClaimantstrustandtrustfinancialservicesClaimantsclientsand

thepotentialclientsthereoflosttheirconfidenceinClaimantasatrustcompany.Manytransactionswereblocked

bybanksandother institutions.Furthermore,thebankswithwhichtheClaimanthadaccounts,throughwhich it

providedservicesto itsclientsandotherfinancialinstitutions,decidedtocease itsbusinessrelationshipwiththe

Claimant. In addition, thebankswithwhich theClaimant tried toopenbank account in order tooperate and

pursueitsbusinessactivityrefusedtoaccepttheClaimantasaclient.


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posted false and misleading information regarding the claimant and its

related companies in its official website and released same to the media

which caused irreparable damage to the Claimant. Claimant had entered

into the rapid growth stage of start-up companies which will be

demonstrated herein, and that halt in business operations caused solely

by the actions of the FYROM amounted to huge and substantial losses. For

over two (2) years, Claimant has been unable to operate profitably and at

times, unable to operate at all. The damage done by the reporting of the

money laundering allegations about Claimant and the conviction of a

director of the Claimant has led to consistent denial of service in the

Claimants main business, as a trust and trust financial services provider.

Dozens of banks have denied Claimant simple accounts. Even when

Claimant has been granted accounts, large clearing banks have refused to

send wires on behalf of Claimant and its related companies effectively

shutting down the business. This not only stopped the growth Claimant had

been experiencing, but actually reversed its growth trends. With the

damaged made to the Claimants trust and trust financial services

culminating in the inability to service clients, the last two to three years have

seen consistent losses.21

87. The violations of Respondents own laws with respect to Claimants

claim are all within the ambit and definition of investment within the

Agreement and therefore must be taken into account in calculating damages.

88. The financial losses incurred by CCSL under FYROM law,

international law and the BIT can be broken down into a few categories and

due to the circumstances and facts of this case the only way to fairly and

21SeeAppendix__


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justly determine valuation and damages is to include moral damages such as

material and non-material damages and lost profits and returns:

Wire Fees

Account Opening Fees

Credit Card Purchase

Credit Card Funding Fees

Ancillary operations

Over-Staffing

Attorney Fees

These losses will be shown and explained in Appendix __.

89. The measures described above, implemented by FYROM and

possibly by other organs of the Macedonian State and attributable to the

Respondent under international law, have caused substantial damages to the

Claimant as described above. The amount of these damages will be

documented in detail by competent financial evidence in this proceeding.

VI. REQUEST FOR RELIEF

90. The facts demonstrate that the actions and measures taken by theRespondent within the FYROM website and news media worldwide

disseminating false and misleading information damaged Claimants trust

and trust financial services within the trust banking and financial business

arena worldwide and continues to so to this date.


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91. For the foregoing reasons, the Claimant respectfully request that a

Tribunal be constituted in accordance with the Convention and the Rules to

resolve the claims set forth in this Request for Arbitration,22 and that the

tribunal render an award in favor of the Claimant as follows:

A. Declaring that the Respondent has breached the BIT

i. by expropriating the Claimants investments without

complying with the requirements of the BIT, including

payment of prompt, adequate and effective compensation;

ii. by failing to accord fair and equitable treatment to the

Claimants investments;

iii. by taking unreasonable or discriminatory measures that

impaired the operation, management, maintenance, use,

enjoyment or disposal of the Claimants investments; and

iv. by discriminating against the Claimant and in favor of

other nationals by using Claimants name in FYROMs official

website regarding the money laundering activities while

using GFTs former directors initials BM in said website

and;

v. by failing to observe obligations entered into with respect to

Claimants investments under the BIT;

B. Declaring that the Respondent has breached customary

international law

i. by violating the minimum standard of treatment of foreign

investors; and

22The Claimant hereby reserves its right to amend or supplement this Request for Arbitration.


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ii. by expropriating the Claimants investments without

observance of due process and payment of prompt, adequate

and effective compensation;

C. Declaring that the Respondent violated FYROMs own laws such

as follows: Articles 9,187, 142, 178, 189, 192 and their respective

subsections as alleged herein above;

D. Ordering the Respondent to pay to the Claimants full reparation in

accordance with the BIT and customary international law,

including compensation for damages sustained as a result of the

aforesaid actions and measures of the Respondent, in an amount of

$451, 000,000.00 USD, or the amount established in the proceedings,

plus compound interest thereon in accordance with applicable law and

gross up of any taxes that may be imposed by the Respondent on or

affecting such compensation;

i. The total damages, consequential and moral non-material and

future non-material damages based on the breaches of the

FYROM laws, international law and violations of the

Agreement, conservatively calculated are

$601,000.000.00 USD, and is hereby requested as total

damages in this case.23

E. Ordering the Respondent to pay all costs and expenses of this

arbitration proceeding, including the fees and expenses of the tribunal

and the cost of legal representation, plus interest thereon in

accordance with applicable law;

F. Granting pre-award compound interest on all compensatory

damages from the date of Respondents actions to the date of issuance

23SeeAppendix__.


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of the award and post-award compound interest on all amounts

awarded from the date of the award to the date of payment;

G. Order Respondent to remove the statement with respect to

Claimant being involved in any type of money laundering or criminal

activity and post the fact that Claimant was not involved in money

laundering activities and that Claimant, as Respondent officially

stated in Court, fully cooperated with the SEC and was not involved

in any criminal activities .

H. Such other or additional relief as may be appropriate under the

applicable law or may otherwise be just and proper.

Respectfully submitted,

Juan F Torres III, Esq.Juan F Torres III, P.A.4900 Oleander AveFort Pierce, Fl 34983(772)652-5200 (telephone)(772) 293-9017 (telefax)

Petro Janura, Esq.Janura Law OfficeOrce Nikolov 94Skopje, Macedonia


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