INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES In the arbitration

343 Pages·2017·11.89 MB·English

INTERNATIONAL CENTREFOR SETTLEMENT OF INVESTMENT DISPUTES
In the arbitration proceeding between
UNIÓN FENOSA GAS,S.A.
Claimant
and
ARAB REPUBLIC OF EGYPT
Respondent
ICSIDCase No. ARB/14/4
AWARD
The Tribunal:
V.V. Veeder, President
J.William Rowley, Arbitrator
Mark Clodfelter, Arbitrator
Secretary of the Tribunal
Milanka Kostadinova
Date of Dispatch to the Parties: 31 August 2018
REPRESENTATIONOFTHEPARTIES
Representing Unión Fenosa Gas, S.A.: Representing the Arab Republic of Egypt:
MrR. Doak Bishop H.E. CounsellorHussein Khalil Hamza
Mr David H. Weiss Counsellor Abdel Hameed Nagashy
MsAnisha Sud CounsellorMohamed Khalaf
Ms Sara L. McBrearty CounsellorAmr ArafaHassan
MsGinny Castelan CounsellorFatma Khalifa
King & Spalding LLP Counsellor Yousria El Gamal
1100 Louisiana Street, Suite 4000 Counsellor Lela Kassem
Houston, Texas 77002 Egyptian State Lawsuits Authority (ESLA)
United States of America 42 Gameat El Dowal El Arabiya St.
Mohandeseen, Giza, Cairo
and P.O. Box: 12311
Egypt
Mr Edward G. Kehoe
MsIsabel Fernández de la Cuesta and
MrAloysius Llamzon
Mr Timothy M. McKenzie (since 17 March 2015)
King & Spalding LLP
DrClaudia Annacker
1185 Avenue of the Americas
MrRobert T. Greig
New York, New York 10036
MrJ. Cameron Murphy
United States of America
MsLaurie Achtouk-Spivak
Mr Larry Work-Dembowski
and
Ms Ariella Rosenberg
MsEllie Norton
Mr James E. Castello
Cleary Gottlieb Steen & Hamilton LLP
Mr Rami Chahine
12, rue de Tilsitt
King & Spalding International LLP
12, cours Albert 1er 75008 Paris
France
75008 Paris
France
and
Ms Sara Burns
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
United States of America
i
TABLEOFCONTENTS
I. THE ARBITRATION I.001
(1) THE PARTIES I.001
(2) THE ARBITRATION’S PROCEDURE I.001
II. THE PARTIES’ DISPUTE II.001
(1) INTRODUCTION II.001
(2) THE CLAIMANT’S CASE II.001
(3) THE RESPONDENT’S OBJECTIONS,RESPONSES ETC II.002
(4) THE PARTIES’RESPECTIVE PRAYERS FOR RELIEF II.004
III. THE PRINCIPAL TEXTS III.001
(1) INTRODUCTION III.001
(2) THE TREATY III.001
(3) THE SPA III.003
(4) THE EGAS TOLLING CONTRACT III.009
(5) THE ICSID CONVENTION III.009
(6) THE ILC ARTICLES ONSTATE RESPONSIBILITY III.010
IV. THE PRINCIPAL ISSUES IV.001
(1) INTRODUCTION IV.001
(2) THE PRINCIPAL ISSUES IV.001
V. THE PRINCIPAL FACTS V.001
(1) INTRODUCTION V.001
(2) DRAMATIS PERSONAE V.001
(3) SELECTED FACTUAL CHRNONOLOGY V.004
1980-1982 V.005
1993 V.005
1994 V.005
1997 V.005
1999 V.006
2000 V.006
2001 V.023
2002 V.030
2003 V.038
2004 V.040
2005 V.042
2006 V.043
2007 V.046
2008 V.051
i
2009 V.054
2010 V.055
2011 V.058
2012 V.065
2013 V.082
2014 V.096
2015 V.099
2016 V.101
2017-2018 V.102
VI. THE JURISDICTION ISSUES VI.001
(1) INTRODUCTION VI.001
(2) THE RESPONDENT’S CASE VI.003
(3) THE CLAIMANT’S CASE VI.011
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS VI.018
(5) SUMMARY OF DECISIONS VI.024
VII. THE CORRUPTION ISSUES VII.001
(1) INTRODUCTION VII.001
(2) THE RESPONDENT’S CASE VII.001
(3) THE CLAIMANT’S CASE VII.007
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS VII.014
(5) SUMMARY OF DECISIONS VII.031
VIII. THE NECESSITY ISSUES VIII.001
(1) INTRODUCTION VIII.001
(2) THE RESPONDENT’S CASE VIII.002
(3) THE CLAIMANT’S CASE VIII.006
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS VIII.011
(5) SUMMARY OF DECISIONS VIII.016
IX. THEMERITSISSUES IX.001
(1) INTRODUCTION IX.001
(2) THE CLAIMANT’S CASE IX.001
(3) THE RESPONDENT’S CASE IX.010
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS IX.018
(5) SUMMARY OF DECISIONS IX.046
X. THE COMPENSATIONISSUES X.001
(1) INTRODUCTION X.001
(2) THE CLAIMANT’S CASE X.003
(3) THE RESPONDENT’S CASE X.015
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS X.022
(5) INTEREST X.031
(6) SUMMARY OF DECISIONS X.032
ii
XI. THE STAY/SUSPENSION ISSUES X1.001
(1) INTRODUCTION XI.001
(2) THE RESPONDENT’S CASE XI.001
(3) THE CLAIMANT’S CASE XI.004
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS XI.007
(5) SUMMARY OF DECISIONS XI.008
XII. THE COSTS ISSUES XII.001
(1) INTRODUCTION XII.001
(2) THE CLAIMANT’S CASE XII.001
(3) THE RESPONDENT’S CASE XII.003
(4) THE TRIBUNAL’S ANALYSES AND DECISIONS XII.007
XIII.THE OPERATIVE PART XIII.001
iii
A:SELECTEDABBREVIATIONS
ICSID Rules of Procedure for Arbitration
Arbitration Rules
Proceedings (2006)
Agreement on the Reciprocal Promotion and
Protection of Investments between the
BIT or Treaty Kingdom of Spain and the Arab Republic of
Egypt, signed on 3November 1992 and
entered into force on 26 April 1994
BCMor bcm Billion cubic meters
Bcma orbcma Billion cubic metersper annum
C-[#] Claimant’s Exhibit
CL-[#] Claimant’s Legal Authority
Claimant’s Memorial on the Merits dated 7
Cl Mem Merits
August 2015
Claimant’s Counter-Memorial on Jurisdiction
Cl CM Jur
dated 13 June 2016
Claimant’s Objection to Bifurcation dated 22
Cl Obj Bif
December 2015
Claimant’s Rejoinder on Bifurcation dated 5
Cl Rej Bif
February 2016
Claimant’s Reply Memorial on the Merits
Cl Rep Merits
dated 7 October 2016
Claimant’s Rejoinder on Jurisdiction and
Cl Rej Jur
Admissibility dated 16 January 2017
Claimant’s StatementofCosts dated 17 May
ClSoC
2017
COS Claimant’s Opening Statement
The gas liquefaction plant in Damietta, Egypt
Damietta Plant
Egyptian Arab Trading Company
EATCO
Egyptian Natural GasHolding Company
EGAS
iv
Case 1:18-cv-02395 Document 1-1 Filed 10/17/18 Page 11 of 347
EGPC Egyptian General Petrolemn Corporation
ENI Eni S.p.A.
Engineeting for the Petrolemn & Process
ENPPI
Industries
ER# First, Second, etc. Expe1t Repmt
GASC O Egyptian Natmal Gas Company
GNF Gas Natural Fenosa
Heating on Judsdiction and the Metits held on
Heating
6 to 11 March 2017
The IDA Rules on Taking of Evidence in
IDA Rules
Intemational Arbitration (29 May 201 0)
Intemational Centre for Settlement of
ICSID or the Centre
Investment Disputes
Convention on the Settlement of Investment
ICSID Convention
Disputes Between States and Nationals of
Other States dated 18 March 1965
Alticles on Responsibility of States for
ILC Alticles Intemational Wrongful Acts of the
Intemational Law Commission
•
LNG Liquefied Natmal Gas
NG Nantral Gas
MBtu or MMBtu or MMBTU Million Bdtish Thetmal Units
R-[#] Respondent's Exhibit
RL-[#] Respondent's Legal Authodty
Respondent's Counter-Memorial on the Medts
Resp CM Melits
dated 13 Jtme 2016
Respondent's Memmial on Objections to
Resp Obj Jm & Req for Bif Jmisdiction and Request for Bifmcation dated
25 November 2015
Respondent's Rejoinder on the Medts dated 16
Resp Rej Merits
Januaty 2017
v
Respondent’s Reply Memorial on Bifurcation
Resp Rep Bif
dated 18 January2016
Respondent’s Reply Memorial on Objection to
Resp Rep Jur Jurisdiction and Admissibilitydated 7 October
2016
Respondent Statement ofCosts dated 17 May
RespSoC
2017
RfA Request for arbitration dated 14 February 2014
ROS Respondent’s Opening Statement
SEGAS Spanish-Egyptian Gas CompanyS.A.E.
Natural Gas Sale and Purchase Agreement
between Egyptian General Petroleum
SPA Corporation,as“Seller”,and Unión Fenosa
Desarrollo y Acción Exterior, S.A.,as
“Buyer”, dated 1 August 2000
Tr.Day [#] [page] Transcript ofthe Hearing –day and page
The Arbitral Tribunal constituted on 8
Tribunal
December 2014
Unión Fenosa Unión Fenosa, S.A.
Unión Fenosa Desarrollo y Acción Exterior,
UFACEX
S.A.
UFGor UFGas Unión Fenosa Gas, S.A.
UFGC Unión Fenosa Gas Comercializadora, S.A.
UFI(previously UFACEX) Unión Fenosa Internacional, S.A.
WS# First, Second, etc.Witness Statement
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Case 1:18-cv-02395 Document 1-1 Filed 10/17/18 Page 13 of 347
B: SELECTED LEGAL MATERIALS
Exhibit
Short Name Full Name
Number
Asian Agricultural Products Limited v. Republic of
AAPL v. Sri Lanka Sri Lanka, ICSID Case No. ARB/87/3), Award, 27 CL-0098
Jlllle 1990
Accession Mezzanine Capital L.P. and Danubius
Kereskedohaz Vagyonkezelo Zrt. v. Hungary,
Accession v. Hungary ICSID Case No. ARB/12/3, Decision on RL-0052
Respondent's Notice of Juiisdictional Objections
and Request for Bifurcation, 8 August 2013
ADC Affiliate Limited and ADC & ADMC
Management Limited v. The Republic ofH ungary,
ADC v. Hungary CL-0095
ICSID Case No. ARB/03/16, Award, 2 October
2006
Alex Genin, E. Credit Limited, Inc. and A.S Baltoil
Alex Genin v. Estonia v. The Republic ofE stonia, ICSID Case No. CL-0151
ARB/99/2, Award, 25 Jlllle 2001
Alpha Projektholding GmbH v. Ukraine, ICSID
Alpha v. Ukraine CL-0061
Case No. ARB/07/16, Award, 8 November 2010
Alps Finance and Trade v. Alps Finance and Trade AG v. The Slovak
RL-0140
Slovak Republic Republic, UNCilRAL, Award, 5 March 2011
Amco Asia Corporation and others v. Republic of
Indonesia, ICSID Case No. ARB/8111
Amco v. Indonesia RL-0048
(resubmitted case), Decision on Jurisdiction, 10
May 1988
Amco Asia Corporation and others v. Republic of
Amco v. Indonesia Indonesia, ICSID Case No. ARB/8111, Decision CL-0131
on Jmisdiction, 25 September 1983
Amoco International Finance Corporation v. The
Government of the Islamic Republic ofI ran
National Iranian Oil Company, National
Amoco v. Iran CL-0097
Petrochemical Company and Kharg Chemical
Company Limited, Case No. 56, Pattial Award No.
310-56-3, 14 July 1987
Ampal-American Israel Corp. v. Arab Republic of
Ampal v. Egypt Egypt, (ICSID Case No. ARB/12111), Decision on CL-0273
Liability and Heads of Loss, 21 Febmary 2017
Anat o lie Stati et al. v. Republic of Kazakhstan,
Anatolie Stati v. Kazakhstan SCC Arbitration No. 116/2010, Awru·d, 19 CL-007
December 2013
Apotex Holdings, Inc. and Apotec Inc. v. United
States ofA merica, ICSID Case No.
Apotex v. United States CL-0112
ARB(AF)/12/1, Procedural Order Deciding
Bifurcation and Non-Bifurcation, 25 JanUatyr 2013
Apotex Holdings, Inc. and Apotex Inc. v. United
Apotex v. United States States ofA merica, ICSID Case No. RL-0047
ARB(AF)/12/1, Award, 25 August 2014
ix
Case 1:18-cv-02395 Document 1-1 Filed 10/17/18 Page 14 of 347
Exhibit
Short Name Full Name
Number
Mr. Franck Charles Arifv . Republic ofM oldova,
Arifv . Moldova CL-0129
ICSID Case No. ARB/11/23, Award, 8 April2013
AWG v. Argentina, UNCITRAL, Decision on
AWG v. Argentina CL-0200
Liability, 30 July 2010
Azurix Corp. v. The Argentine Republic, ICSID
Azurix v. Argentina Case No. ARB/01/12, Decision on Jmisdiction, 8 CL-0133
December 2003
Azurix Corp. v. The Argentine Republic, ICSID
Azurix v. Argentina CL-0010
Case No. ARB/01/12, Award, 14 July 2006
Azurix Corp. v. The Argentine Republic, ICSID
Case No. ARB/01/12, Decision on the Application
Azurix v. Argentina CL-0099
for Annulment of the Argentine Republic, 1
September 2009
Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v.
Islamic Republic ofP akistan, ICSID Case No. CL-0161
Bayindir v. Pakistan
ARB/03/29, Decision on Jmisdiction, 14 RL-0072
November 2005
Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v.
Bayindir v. Pakistan Islamic Republic ofP akistan, ICSID Case No. CL-0086
ARB/03/29, Award, 27 August 2009
Bernardus Henricus Funnekotter and others v.
Bernardus Henricus v.
Republic ofZimbabwe, ICSID Case No. CL-0104
Zimbabwe
ARB/05/6, Award, 22 Aptil2009
BG Group Plc v. The Republic ofA rgentina,
BG Group v. Argentina CL-0036
UNCITRAL, Award, 24 December 2007
Biwater Gaujf (Tanzania) Ltd. v. United Republic
Biwater v. Tanzania ofTanzania, ICSID Case No. ARB/05/22, Award, CL-0014
24 July2008
sec
Iurii Bogdanov et al. Republic ofM oldova,
Bogdanov v. Moldova V. CL-0035
Case Award, 22 September 2005
Yuri Bogdanov and Yulia Bogdanov v. The
Bogdanov v. Moldova Republic ofM oldova, SCC Case No. V091/2012, CL-0088
Final Award, 16 Aplil2013
Case Concerning Application Of The Convention
On The Prevention And Punishment OfThe Crime
Bosnian Genocide Case Of Genocide (Bosnia And Herzegovina v. Serbia RL-0049
And Montenegro), Judgment, IC.J Reports 2007,
p.43
Bureau Veritas, Inspection, Valuation, Assessment
and Control, BIVAC B. V. v. The Republic of
Bureau Veritas v. Paraguay Paraguay, ICSID Case No. ARB/07/9, Fmther RL-0043
Decision on Objections to Jmisdiction, 9 October
2012
Burlington Resources Inc. v. Republic ofE cuador,
Burlington v. Ecuador ICSID Case No. ARB/08/5, Decision on CL-0058
Jmisdiction, 2 June 2010
X