Nuclear Accident and Sovereign Debt Case: Durmstein v. Velancy

This year in Model Courts of Justice, judges of the International Court of Justice will assemble for a contentious matter between two fictional countries in the case ‘Nuclear Accident and Sovereign Debt Case: Durmstein v. Velancy’.

Following an unprecedented earthquake, heavily nuclear energy dependent Velancy experienced a partial meltdown in one of her nuclear reactor sites. Although the meltdown did not cause any major damage to environment, assistance from the neighbouring country Durmstein had to be requested. The mission of the Durmsteiner assistance crew was to transport radiologically active fuel rods to Durmstein from Velancy. However, the transport vehicle crashed in Durmstein territory and caused environmental damage, resulting in the evacuation of the Durmsteiner village Gründorf.

Meanwhile, Velancy decided to close down five of the nuclear reactors in her territory. This caused the economy to become insolvent, meaning that Velancy could no longer be able to pay its debts. The Congress of Velancy decided to restructure the government bonds to pay 10% of what they originally would. Durmsteiner companies were by far the main investor in Velancy government bonds.

Following these events, the Federal States of Durmstein requested compensation for their deceased personnel, evacuation costs of Gründorf and loss of profit from government bonds which in their interpretation constituted an act of expropriation. Velancy refused any responsibility for the Gründorf incident and stated that the debt restructuring was not an expropriation. Durmstein applied to International Court of Justice to solve these issues.

The case revolves mainly around International Environmental Law and International Business Law, while also including questions concerning the application, interpretation and enforcement of international law as well as principles of customary international law.

Study Guide

Rules of Procedure