This finding is. In the proceedings between. 2015-2016). Equally, it manifestly exceeded its powers and failed to state reasons in concluding that Argentina would have provided fair and equitable treatment if it had reviewed tariffs to allow APSF to repay the secured debt. - 20 May 2016, Decision on the Termination of the Stay of Enforcement of the Award The Tribunal stated very clearly that it did not attribute any damages to the termination of the Concession. Argentina also argues that the Tribunal manifestly exceeded its powers and seriously departed from fundamental rules of procedure and failed to state reasons in relying on the report of the expert Dr. Their conclusions also exonerated Professor Kaufmann-Kohler from breaching any obligation to investigate and disclose which could have amounted to a breach of a fundamental rule of procedure. Third, there were examples of reproduction inapplicable to the Santa Fe concession that Argentina argued directly influenced the decision of the Tribunal on fair and equitable treatment, on the necessity defence and on valuation. In the Committee's view, this conclusion that the Tribunal was not improperly constituted covers equally the contention of Argentina that its right to an impartial and independent tribunal was contravened, leading to a breach of a fundamental rule of procedure pursuant to Article 52(1)(d). - 12 May 2008, Decision on Liability "Suez and ors v Argentina, Decision on Liability, ICSID Case No ARB/03/17, IIC 442 (2010), 30th July 2010, United Nations [UN]; World Bank; International Centre for Settlement of Investment Disputes [ICSID]" published on by Oxford University Press. Far from uncritically reproducing findings from, Finally, the Tribunal also stated reasons when deciding common damages issues in this case and. The problem is that this is exactly what the Province of Santa Fe did. There can be no manifest excess of power here. Tan Sri Dato' Cecil W.M. It also found that the Claimants Interagua and AGBAR were entitled, by operation of the most-favored-nation ("MFN") clause of the Argentina-Spain BIT, to avail themselves of the more favorable treatment of the Argentina-France BIT and did not, therefore, need to resort to the local courts of Argentina before initiating this arbitration. Further, Argentina claims, the Tribunal ignored large volumes of documentary, expert and witness evidence submitted to it by Argentina. Clearly a tribunal does not have to provide an analysis and conclusions on every piece of evidence before it. The Tribunal did not "overlook" Argentina's arguments; it rejected them. With regard to the second and third categories of reproductions, the question is whether they indicate a failure by the Tribunal to consider properly the arguments of Argentina and that this would amount to a manifest excess of power, a violation of a fundamental rule of procedure or a failure to state reasons. Suez, InterAguas Servicios Integrales del Agua S.A., Sociedad General de Aguas de Barcelona S.A. v. The Argentine Republic, ICSID Case No. "Suez and ors v Argentina, Award, ICSID Case No ARB/03/19, IIC 727 (2015), despatched 9th April 2015, World Bank; International Centre for Settlement of Investment … The weight of authority agrees also that the manifest requirement applies equally to both jurisdictional and merits decisions. The Tribunal established the legal standard and applied the facts to it. Argentina mischaracterizes how the Tribunal valued the Claimants' loss. But that is not a ground on which there can be annulment. Suez (Arabic: السويس as-Suways; Egyptian Arabic: es-Sewēs, el-Sewēs pronounced [esseˈweːs]) is a seaport city (population of about 750,000 as of August 2018) in north-eastern Egypt, located on the north coast of the Gulf of Suez (a branch of the Red Sea), near the southern terminus of the Suez Canal, having the same boundaries as Suez Governorate. It does not agree with the Tribunal on the merits of its decision. The Committee declared the proceeding closed on December 7, 2018, in accordance with Rules 53 and 38(1) of the ICSID Arbitration Rules. The Tribunal explained that it agreed with Dr. In any event, the supplementary sources that Argentina cites fail to support its view of Article 52(1)(a). - 14 Dec 2018, Order in Response to a Petition for Participation as Amicus Curiae It is not possible to draw from this conclusion the supposition that the Tribunal must have ignored arguments for the contrary position. In its Decision on Jurisdiction of May 16, 2006, the Tribunal rejected all the objections raised by Argentina, except for one, which had become moot because of the discontinuance of the proceedings in respect of the claimant against which it was addressed. On the first annulment ground, Argentina has not really identified a single instance of the Tribunal failing to apply the governing law or exceeding its power. It also argues that the Tribunal failed to state reasons for its conclusions on these matters, or provide reasons for its rejection of Argentina's arguments on the human right to water. The canal had been owned by the Suez Canal Company, which was controlled by French and British interests. It thus measured compensation "at a point in time just before those actions took place" to provide the Claimants with full compensation. Deep's recommendation of the compounded six-monthly Eurodollar rate. The Tribunal committed several annullable errors in determining damages in this case: (1) it awarded damages for a measure that was not found to violate the applicable BITs; (2) it valued damages by reference to principles that are at odds with the applicable legal framework as established in the Decision on Liability; (3) it ruled that compensation should be awarded in relation to management fees, even though it did not hold the management contract to be a protected investment nor did it determine the nature of such claim, and ordered compensation for services not rendered; and (4) it applied interest rates that exceeded those requested by the Claimants. Save for a brief period of 9-month overlap where both parties asked for a riskfree rate based on 6-month US T-Bills, the Claimants and their experts never "agreed" with Argentina on interest. Second, the Tribunal's reasoning for rejecting Argentina's necessity defense is also stated in the Award. ARB/03/17) Argentina - France BIT (1991) Argentina - Spain BIT (1991) ICSID : ICSID Find out all Jus Mundi tutorial videos in : https://tutorial.jusmundi.com, In less than 3 minutes you'll find everything you need to know about Jus Mundi and how to take full advantage of our search engine.. The Tribunal acted within its powers and provided copious reasons when calculating damages. Prior IAReporter Coverage of Suez v. Argentina (1) ICSID committee declines to annul Suez v. Argentina (Case 03/17) award, but frowns on ICSID’s arbitrator challenge process and copy-paste approach used by arbitrators across several awards Dec 17, 2018. For the Claimants, Argentina's arguments on this point are no more than an impermissible attempt to have the Committee revisit the merits of the Tribunal's interpretation and application of the MFN clause in the Spanish treaty. But such an inference is not supported by any evidence. These other cases are Suez et al v. Argentina, ICSID Case No. Before the First Session, the Parties agreed on a schedule for written pleadings concerning the stay of enforcement of the Award. Accordingly, the Committee rejects Argentina's claim for annulment on the basis that the wrongful application of the MFN provision constituted a manifest excess of power or a failure to state supporting reasons. First there are examples where the Tribunal used a term that was applicable to the other cases but not to the present case. It is not true that the Decision on Disqualification performed a mere. But the Tribunal interpreted the MFN provision on the basis of Article 31 of the Vienna Convention and concluded that it did not find evidence of the intent of the parties for the position claimed by Argentina. Accordingly, the Committee rejects the claim that the Tribunal was not properly constituted on the ground that Professor Kaufmann-Kohler manifestly lacked the necessary independence and impartiality required by. Thus, Argentina's complaint that recovery should not be allowed for management fees is a complaint about the substantive conclusion of the Tribunal on the merits of the case, which is not a matter for annulment. Argentina never argued before the Tribunal any subsequent treaty practice concerning the Spanish treaty. She was a member of the Board of Directors of UBS, a company holding shares and other interests in Suez, during the arbitration proceedings. In 1993 water in Buenos Aires was sold to a consortium called Aguas Argentinas made up of four foreign corporations: the British company Anglian Water, French companies, Vivendi and Suez … Rather, it was recognizing that the Claimants were entitled to recover the full extent of their loss, which could not be reduced because of some potential future termination of the Concession Contract. In accordance with the agreed schedule and further revisions, the Parties made three simultaneous rounds of submissions on the stay of enforcement. That, however, is not a basis for annulment. PROFESSOR KAUFMANN-KOHLER'S APPOINTMENT AS DIRECTOR OF UBS AND HER FAILURE TO DISCLOSE AND INVESTIGATE, C. FAILURE TO COMPLY WITH THE 18 MONTHS' LOCAL LITIGATION REQUIREMENT, D. NECESSITY UNDER CUSTOMARY INTERNATIONAL LAW, Article 31(1) of the Vienna Convention on the Law of Treaties. It did, however, conclude that Argentina denied the Claimants fair and equitable treatment (". 10 Egregious Investor-State Cases ... Summary This report examines how global corporations … And in any event it is beyond the scope of annulment for a committee to reweigh the evidence considered by the tribunal. In this regard, while recognizing that it is not satisfactory for a tribunal to rely on the reasoning from the decision in another case without differentiation, the Committee has difficulty seeing what rule of procedure has been violated by the reproduction of text from the other arbitrations in this case. These include the use of the terms "abrupt" and "suddenly" with respect to termination which did not apply in the case of the Santa Fe Concession, or references to "serious fault" and "heavy fines", which were not part of the present case, or a "revenue stream of 21 years" which was not applicable in the present case, or a "five year tariff review" which did not apply in the present case. Accordingly, the Committee rejects Argentina's claim that the reproduction from texts of other awards constitutes a manifest excess of powers (Article 52(1)(b)), a serious departure from a fundamental rule of procedure (Article 52(1)(d)) or a failure to state reasons (Article 52(1)(e)). Ultimately, they concluded that the alleged connection between the Claimants and Professor Kaufmann-Kohler did not lead to the conclusion that there was a manifest lack of the qualities of independence and impartiality that an arbitrator must have. The decision on disqualification in the present case could not be regarded as so plainly unreasonable that no decision-make could have reached that decision. Provisions with essentially identical wording have been interpreted to permit the importation of dispute settlement provisions from other BITs and used as a basis for permitting a claimant to bypass the 18-month local litigation requirement. The question for the Committee is whether that decision was so plainly unreasonable that no decision-maker could have reached it. With respect to Argentina's necessity defence, the Tribunal limited its discussion to 15 paragraphs out of which only 9 are really devoted to analysis, and it yet copied almost word by word from the decision on liability in the, The parties' agreement to submit these proceedings to identically composed tribunals did not entail an authorization for the arbitrators to resolve them as if they were one and the same, by transposing the findings made in one into the other, while overlooking their differences. For the Claimants, Argentina's criticisms of the Tribunal's valuation methodology amount to no more than complaints that the Tribunal calculated damages incorrectly. On 30 July 2010, the ICSID tribunal in Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal v. First of all, the Tribunal's factual determinations and legal conclusions are not open to challenge and, even if they were, they are correct. For the Committee to go behind this would be to engage in an analysis of the substantive issues in the case, something beyond the mandate of an. The. Each Party shall bear half of ICSID's administrative fees and expenses incurred in connection with this proceeding, including the fees and expenses of the Members of the Committee. It also includes reviewing whether an arbitrator possesses the requisite qualifications to serve as such. Notwithstanding this evidence, the unchallenged members of the Tribunal rejected the Proposal for Disqualification and Prof. Kaufmann-Kohler remained as a director of UBS. That provision does not permit an annulment committee to consider the question whether a tribunal has been properly constituted as if it were deciding the matter for the first time. The Claimants denied that the Tribunal had manifestly exceeded its powers or failed to state reasons when dismissing Argentina's necessity defense. Thus, a tribunal must take care that when it repeats the same reasoning in each of the cases it has also made clear that each case has been considered on its own merits. Thus, the decision of the Tribunal on interest was. TDM IACL Case Report Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v. Argentina… Thus, Argentina is essentially asking for a reconsideration of the Tribunal's decision on the merits of the damages award. Indeed, decision-makers in other cases have reached precisely the same decision on essentially the same grounds in respect of attempts to disqualify Professor Kaufmann-Kohler as was reached in the present case. There can be no manifest excess of power where a tribunal makes a decision on a matter that is within its jurisdiction to make - the length of the valuation period for determining loss. Use NEAR alone for X = 30 words. On the issue of costs, the Tribunal determined that each party should bear its own costs and that the cost of the proceedings shall be divided equally. This Wiki Note has not been submitted yet. - 21 June 2017, Decision on Argentina’s Application for Annulment There would have to be more evidence than this to give some indication that the Tribunal had failed to give due consideration to the arguments of the parties or ignored relevant evidence. The Committee sees neither party as capturing accurately the standard of review when annulment is requested under Article 52(1)(a). Argentina misrepresents facts and contends various legal findings that were conclusively established by the Decision on Disqualification, which are not subject to review or reassessment at this stage. 602/99 dated July 8, 1999, Decision on a Second Proposal for the Disqualification of a Member of the Arbitral Tribunal, May 12, 2008, issued in the case of, Vienna Convention on the Law of Treaties signed on May 23, 1969, and entered into force on January 27, 1980. The Claimants argued during the arbitration that they should be compensated for the amount payable to the Inter-American Development Bank (", Although the Parties both start from the common position that annulment is governed by the terms of. Suez et al. These are used for areas such as security, ergonomics and language choice, and are therefore always active. First, she was legally bound by a fiduciary duty to the company that she was a director of, which required her to put the company's interests ahead of her own. Nevertheless, access to the original PDF is reserved to clients of the Jus Mundi - Arbitration Research offer. In short, what Argentina is attacking is the substance of the issue. Yet, even here, the Committee is unable to conclude that the Tribunal failed to state reasons or that it had ignored arguments made by Argentina. The Tribunal did state the legal standards it purported to apply and provided reasons for its interpretation. However, the Committee is not convinced by the Claimants' argument that Argentina is prevented from arguing a violation of a fundamental rule of procedure by failing to raise its concerns about the Decision on Liability at an earlier stage. The Company collects, treats, and distributes drinkable water. Already registered ? ", The first approach is that followed by the annulment committee in, Contrary to Argentina's position, Article 14(1) does not empower an, This being clear, there is no need to resort to supplementary means of interpretation. Argentina's distinction between Article 52(1)(a) and all other grounds for annulment is flawed. It considered that such a limitation would undercompensate the Claimants for their loss. No hearing was convened. Suez, Sociedad General de Aguas de Barcelona S.A. and Interagua Servicios Integrales de Agua S.A. Treaty: Exclude grammatical variations of your search terms. ", Claimants request that "Argentina bear all costs and expenses incurred by the Claimants in connection with the present annulment proceedings, including the fees of the Centre, the costs and fees of the. These included references to AASA instead of APSF, or to Argentina or the Argentine State when it should have been a reference to Santa Fe Province, or references to a "metropolitan area" when it should have been a reference to the "Santa Fe Concession Area". Moreover, not all annullable errors justify annulment. It exceeded its powers because, as with the sponsored debt, it only defined management fees as a protected investment in the Award. Indeed, the more substantial argument advanced by Argentina relates to the failure to state reasons, specifically in relation to fair and equitable treatment, the necessity defence and valuation. The Tribunal concluded then that the measures adopted by Argentina were not the "only way" to preserve its essential interests because Argentina "could have attempted to apply more flexible means to assure the continuation of the water and sewage services to the people of Santa Fe and at the same time respected its obligations of fair and equitable treatment. Public Participation and Transparency in International Investment Arbitration: Suez v Argentina New Zealand Yearbook of International Law, The Volume 4 (2007) Kawharu, Amokura 1. The Committee considers that whether management fees were to be recovered fell clearly within the power of the Tribunal to determine damages and thus there can be no manifest excess of power. - 14 Apr 2006, D. SUBMISSIONS ON ARGENTINA'S APPLICATION FOR ANNULMENT, IV. First, the Tribunal's liability and FET findings are clearly supported by reasons. The Claimants had proposed instead a rate based on the APSF's weighted cost of capital. As a result of this, the integrity of the proceedings was irreversibly broken and the Tribunal stayed improperly constituted. In their view, considering the size and scope of UBS's operations, the outcome of the arbitration would at best have a negligible financial effect on Suez and, consequently, an insignificant effect on UBS. During the arbitration, the Claimants consistently argued that APSF's secured debt was a covered investment, and consistently sought damages for that investment. As a matter of fact, Argentina spent a great deal of effort showing the particularities of this case both in its pleadings on the merits and in its submissions on, Contrary to Claimants' suggestions, Argentina could not have remedied this problem while the arbitration was pending. Argentina's request for annulment is denied. The International Centre for Settlement of Investment Disputes (ICSID) arbitrated debts in favour of Suez in 2015, ordering Argentina to pay the company and its partners about US$630 million. This is not a case like. It is widely recognized that the power of annulment under Article 52 of the Convention does not extend to an appeal on facts or law. In respect of the rate applied to the rectification of the decision on contingency debt, the Tribunal applied the rate that was stipulated in the Debt Restructuring Agreement of March 3, 2005. That is why it has succeeded in annulling several awards. On May 8, 2017, Argentina submitted its Memorial on Annulment (", On August 7, 2017, the Claimants submitted their Counter-Memorial on Annulment (", On October 5, 2017, Argentina submitted its Reply on Annulment (, On December 4, 2017, the Claimants submitted their Rejoinder on Annulment (". Indeed, Argentina had made precisely the same argument to the Tribunal. It claims that the Tribunal did not meet the standards set out by the. The Claimants sought pre-award interest at three different rates; one for the period between Argentina's main breach in 2001 and the termination of the Concession in January 2006; another for the 9-month period immediately thereafter and another for the remainder time until the date of the Award (e.g. As noted above, the few passages in which the Tribunal refers to this matter are copied from the. In doing so, it also confirmed that it could only compensate Claimants for losses resulting from wrongful acts. Indeed, a review of the evidence relied on by Argentina to show that it did protest reveals actually that it merely argued that differences existed in the two cases that the Tribunal had to take into account at the. Further, the existence of a Decision on Disqualification by the original tribunal has to be something more than "an element of judgment" for an annulment committee to consider. The Tribunal "manifestly" exceeded its powers because it went far beyond the parties' consent, something that is readily apparent from a mere reading of the Award. Whether Argentina agrees or not with this conclusion, that is irrelevant; reasons were given. First, the Tribunal manifestly exceeded its powers and contradicted itself (thus failing to provide reasons) when it awarded damages for claims arising out of the termination of the Concession Contract. Termination had been factored into the discount rate Washington D.C subsequent treaty practice concerning the treaty... 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