[Date of dispatch to the parties: May 28, 2003]
International Centre for Settlement of Investment Disputes (ICSID)
In the Matter of the Annulment Proceeding in the Arbitration between
COMPAÑIA DE AGUAS DEL ACONQUIJA S.A. and VIVENDI UNIVERSAL (formerly COMPAGNIE GÉNÉRALE DES EAUX)
Claimants and ARGENTINE REPUBLIC Respondent
Case No. ARB/97/3
DECISION OF THE AD HOC COMMITTEE ON THE REQUEST FOR SUPPLEMENTATION AND RECTIFICATION OF ITS DECISION CONCERNING ANNULMENT OF THE AWARD 139
President: L. Yves FORTIER, C.C., Q.C.
Members of the Professor James R. CRAWFORD, S.C., F.B.A.
ad hoc Committee: Professor José Carlos FERNANDEZ ROZAS
Secretary of the Claudia Frutos-Peterson
ad hoc Committee:
In Case No. ARB/97/3
BETWEEN: Compañia de Aguas del Aconquija S.A. and
Vivendi Universal (formerly Compagnie Générale des Eaux)
(“Claimants”)
Represented by:
Judge Stephen M. Schwebel, as counsel Mr. Bernardo M. Cremades of the law firm B. Cremades y Asociados, as counsel Mr. Daniel M. Price and Mr. Stanimir A. Alexandrov of the law firm Sidley Austin Brown & Wood LLP, as counsel Mr. Luis A. Erize of the law firm Abeledo Gottheil Abogados, as counsel Mr. Ignacio Colombres Garmendia
of the law firm Ignacio Colombres Garmendia & Asociados, as
counsel And Argentine Republic (“Respondent” or “Argentina”)
Represented by: Dr. Rubén Miguel Citara, Mr. Hernán M. Cruchagan and
Mr. Carlos Ignacio Suárez Anzorena of the Procuración del Tesoro de la Nación, as counsel
A. BACKGROUND AND PROCEDURAL HISTORY
1. On July 3, 2002, the ad hoc Committee (the “Committee”) rendered
a Decision on Annulment with respect to the Award issued by the Tribunal in
the present arbitration (the “Decision”).1
2. On August 16, 2002, the Argentine Republic submitted to the
Secretary-General of ICSID a Request for Supplementation and Rectification
of some aspects of the Decision (the “Request”). The Request was made on the
basis of Article 49(2) of the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States (the “ICSID Convention”) and
Rule 49 of the ICSID Arbitration Rules. Article 49(2) of the ICSID
Convention reads as follows:
(2) The Tribunal upon the request of a party made within 45
days after the date on which the award was rendered may after
notice to the other party decide any question which it had
omitted to decide in the award, and shall rectify any clerical,
arithmetical or similar error in the award. Its decision shall
become part of the award and shall be notified to the parties in
the same manner as the award. The periods of time provided
for under paragraph (2) of Article 51 and paragraph (2) of
Article 52 shall run from the date on which the decision was
rendered.
3. The Argentine Republic having complied with the deadline set in
Article 49(2) and having made the payments required under the ICSID
Convention and the Arbitration Rules, the Request was registered by the
Secretariat and transmitted to the Claimants and the members of the
Committee on August 23, 2002.
4. After deliberation, the Committee decided, in accordance with the
provisions of Arbitration Rule 49(3), to grant the Claimants until November
4, 2002 to file their observations on the Request. Argentina submitted a Reply
to Claimants’ observations on December 6, 2002.
B. THE POSITION OF THE PARTIES
1) Argentina’s Position
5. In support of its Request, the Argentine Republic makes the following
fundamental arguments:
(a) Request for a supplementary decision under the provisions of
Arbitration Rule 49(1)(c)(i):
6. Respondent asserts that, in its Decision, the Committee incorrectly
omitted to decide whether, as argued by Argentina, the Arbitral Tribunal’s failure
to account for the fact that the transfer of CAA’s shares from DyCASA to
CGE was not previously authorised by the Government of Tucumلn undermined
its decision on jurisdiction.
7. This omission, contends Respondent, requires that the Committee
render a supplementary decision which specifically addresses the issue.
(b) Request for rectification of seven specific matters pursuant to the
provisions of Arbitration Rule 49(1)(c)(ii):
8. The Argentine Republic submits that, in its Decision, the Committee
committed seven material errors in its description of the arguments and legal
position advanced by Argentina in the annulment proceedings. These errors,
each of which is the object of a specific request for rectification, are:
(i) The Committee erred in affirming that there was no dispute
between the parties concerning CGE’s control of CAA at the
time the arbitration proceedings were commenced (paragraphs
48 and 49 of the Decision);
(ii) The Committee erred in stating that the Respondent acknowledged
that there exists no presumption either in favor of or
against annulment of an arbitral award (paragraph 62 of the
Decision);
(iii) The Committee erred in describing the Respondent’s position in
relation to the possibility of a partial annulment and its consequences
(paragraph 67 of the Decision);
(iv) The Committee erred in stating that the Respondent was not
making a late annulment application by way of a counterclaim
(paragraph 70 of the Decision);
(v) The Committee erred in stating that the Respondent argued that
there was a contradiction between the Tribunal’s reasons concerning
jurisdiction and its reasons concerning the merits of the
dispute (paragraph 72 of the Decision);
(vi) The Committee erred in stating that neither party disputes that
a tribunal commits an excess of powers if it fails to exercise its
jurisdiction (paragraph 86 of the Decision);
(vii) The Committee erred in summarizing the arguments of the
Respondent in relation to the treatment by the Tribunal of the
Tucumلn claims (paragraph 93 of the Decision).
2) Claimants’ Position
9. The Claimants object to the Respondent’s Request. They maintain
that the request for supplementary decision and each of the seven requests for
rectification should be rejected as disclosing no omission or error on the part
of the Committee.
C. THE COMMITTEE’S ANALYSIS
1) Limits on the Scope of a Request for Supplementation/
Rectification
10. Before addressing the issues raised by Argentina’s Request, the
Committee considers it appropriate to comment on the nature and purpose of
the procedure by which ICSID awards and decisions may be supplemented or
rectified.
11. In this regard, it is important to state that that procedure, and any supplementary
decision or rectification as may result, in no way consists of a
means of appealing or otherwise revising the merits of the decision subject to
supplementation or rectification.2 Those sorts of proceedings are simply not
provided for in the ICSID system. Still less may a request for supplementation
or rectification of a decision on annulment be employed as vehicle by which to
examine the correctness, not of the decision of the ad hoc committee, but of
the underlying arbitral award.
12. With these comments firmly in mind, the Committee turns to the various
aspects of Respondent’s Request.
2) On the Request for Supplementary Decision
13. As mentioned, the Respondent’s written submissions of August 16 and
December 6, 2002, set out the legal grounds on which the Argentine Republic
relies in support of its Request.
14. As regards its request for a supplementary decision, the Respondent
argues that the Committee omitted to rule on Argentina’s claim that the
Tribunal’s decision upholding its jurisdiction in the arbitration was undermined
by its failure to account for the manner in which CAA’s shares, and thus
control of the company, was transferred from DyCASA to CGE. Argentina
contends that, in accordance with the provisions of the Concession Contract,
this transfer required the express authorization of the Government of
Tucumلn. The existence or non-existence of such authorization and the consequences
thereof for the jurisdiction of the Tribunal must, in the
Respondent’s view, be examined by the Committee.
15. For their part, the Claimants argue: that the Committee is not obliged
to opine on every single matter raised by the parties; that the Request exceeds
the scope of Article 49(2) of the ICSID Convention; and that in any event the
Decision reveals no omission, but, rather, a decision by the Committee contrary
to the position advocated by the Respondent.
16. In the Committee’s view, and contrary to what is argued by the
Respondent, neither the Committee nor indeed the Arbitral Tribunal omitted
to consider Argentina’s position concerning the circumstances surrounding the
transfer of CAA’s shares from DyCASA to CGE or the consequences of that
transfer as regards the Tribunal’s competence. As the Argentine Republic
acknowledges in its written submissions, the Committee stated in its Decision
that CGE had always been an investor, whether or not it had overall control
of CAA; and in any case CGE controlled CAA at the time that arbitration proceedings
were commenced, such that there was no question but that the
Tribunal enjoyed jurisdiction over CAA.3 Specifically, in paragraph 50 of its
Decision, the Committee declared:
[W]hile it is arguable that the Tribunal failed to state any reasons
for its finding that “CAA should be considered a French
investor from the effective date of the Concession Contract,”
that finding played no part in the subsequent reasoning of the
Tribunal, or in its dismissal of the claim. (…) It is also clear the
CGE controlled CAA at the time the proceedings were commenced,
so that there was no question that the Tribunal lacked
jurisdiction over CAA as one of the Claimants in the arbitration.
4
17. These constitute material and substantive findings by the Committee
that belie the contentions underlying Respondent’s Request, although they
admittedly do not expressly refute its entire legal argument.5 Indeed, the
Decision itself demonstrates that, as asserted by Claimants in their written
submissions, the Committee in fact considered – and denied – the relevance
of Argentina’s arguments with respect to jurisdiction.6
18. In these circumstances, only a highly subjective perspective makes it
possible to affirm, as does Respondent, that, but for the Committee’s alleged
“omission,” the content of the Decision would have been different. This subjective
perspective has led the Respondent to refer matters to this Committee
that have already been addressed and decided in the Decision.
19. In no way can it be said that the Committee omitted to address
Argentina’s arguments. Rather, it appears that Respondent is seeking to reopen
a substantive debate that occurred and was resolved during the earlier, merits
phase of the annulment proceeding, with a view to having the Committee
reconsider its findings concerning CAA’s status as an investor subject to the
jurisdiction of the Tribunal and the manner in which the issue was addressed
by the Tribunal. This is something that, in this exceptional phase of the annulment
proceeding, the Committee cannot and will not do.
20. With the collapse of Respondent’s case concerning the Committee’s
alleged omission – the only case open to Respondent under Article 49 of the
ICSID Convention – Argentina’s entire argument in support of its request for
a supplementary decision falls.
21. The Committee wishes to stress that it was not necessary, in order to
decide that CGE controlled CAA at the time of the commencement of the
arbitration, to decide whether relevant contractual requirements had been
met. The question was exclusively whether CAA was a “body corporate effectively
controlled, directly or indirectly, by” CGE (see 1991 Agreement, Article
1(2)(c)), and the dossier indicated clearly that it was. In the Committee’s
view (as, evidently, in the Tribunal’s view also), para. (c) looks to the factual
situation and is concerned with jurisdiction, not with the implications of any
failure to comply with contractual or other requirements, even if these might
be relevant to the merits. Even assuming that CGE should have obtained
Tucuman’s agreement to its acquisition of DyCasa’s shares and did not, it
remained the case that at the time of commencement of the arbitration CGE
directly or indirectly controlled CAA, and for the purposes of ICSID jurisdiction
that is enough. The Committee made it quite clear that in partially
annulling the Tribunal’s decision, including its finding that CAA was controlled
by CGE from the effective date of the Concession Contract, it made
no decision for itself on any aspect of the merits of the Tucuman claim.
22. For the foregoing reasons, the Committee rejects that aspect of
Respondent’s Request that consist of a request that the Committee issue a supplementary
decision.
3) On the Requests for Rectification
23. The Argentine Republic also requests the rectification of what it considers
to be seven material errors in the Decision. It submits that the scope of
the remedy of rectification provided for in Article 49(2) of the ICSID
Convention is well established, as illustrated by recent precedents, and argues
that the particular errors affecting the Decision in the present case are so seri-
ous that, unless rectified, they could “nullify the Decision on Annulment” and
prejudice Argentina’s position in future ICSID arbitrations. The implication is
that, in its deliberations and preparation of the Decision, the Committee disregarded
many of the arguments put forward by the Respondent, to its significant
detriment.
24. The Claimant, for its part, argues that the seven requests for rectification
should be rejected, on the grounds that they exceed the scope of Article
49(2) and, in effect, represent further attempts by the Respondent to reopen
debate on issues already decided by the Committee.
25. A review of pertinent arbitral awards7 illustrates that the availability of
the rectification remedy afforded by Article 49(2) depends upon the existence
of two factual conditions. First, a clerical, arithmetical or similar error in an
award or decision must be found to exist. Second, the requested rectification
must concern an aspect of the impugned award or decision that is purely accessory
to its merits. Simply stated (and contrary to Respondent’s assertion at
paragraph 26 of its Request), Article 49(2) does not permit the “rectification”
of substantive findings8 made by a tribunal or committee or of the weight or
credence accorded by the tribunal or committee to the claims, arguments and
evidence presented by the parties. The sole purpose of a rectification is to correct
clerical, arithmetical or similar errors, not to reconsider the merits of issues
already decided. As will be seen, below, many of the Respondent’s requests
derive from a misunderstanding of this fundamental principle.
(a) Whether the Committee erred in affirming that there was no
dispute between the parties concerning CGE’s control of CAA at
the time the arbitration proceedings were commenced (paragraphs
48 and 49 of the Decision)
26. The Committee reaffirms the statements (actually, the summary of the
facts) contained in paragraphs 49 and 50 of its Decision. Those passages are
not concerned with whether or not the parties are in agreement as to CGE’s
control of CAA or as to the consequences of a determination one way or
another; they merely describe the factual circumstances relating to the alleged
transfer of control of CAA prior to the commencement of the arbitration proceedings.
It is solely in relation to these facts, that is, concerning the manner
in which the shares of CAA changed hands, that the Decision states that there
is no disagreement between the parties. This does not imply that the
Committee considers that there was agreement between the parties with
respect to the validity or juridical consequences of that transfer, for example as
regards CAA’s status as a foreign investor under the ICSID Convention.
27. No error having been found, the Committee denies the rectification
requested by Respondent, which appears as yet another attempt to revisit the
same issue as in its request for a supplementary decision.
(b) Whether the Committee erred in stating that the Respondent
acknowledged that there exists no presumption either in favour
of or against annulment of an arbitral award (paragraph 62 of
the Decision)
28. Paragraph 62 of the Decision comprises, inter alia, a summary of complex
legal arguments raised by the parties during the annulment proceeding. It
focuses on what the Committee considered to be the central aspects of the parties’
positions for the purpose of its Decision. In summarising their positions
thus, the Committee is by no means obliged to restate the parties’ submissions
in their entirety. In this case, the Respondent certainly did make submissions
regarding the existence of a presumption in favor of the validity of the awards,
but not in specific terms, as can be seen by a reading of paragraph 3 of its written
submission of December 6, 2002. Rather, it limited itself to suggesting the
possibility of support for the presumption of the validity of awards without,
however, making an issue of it, or in any way questioning the legitimacy of the
annulment proceeding, which was accepted by all parties.
29. At the end of paragraph 62 of its Decision, the Committee merely
observes that there is no definitive presumption one way or the other. And the
two parties appear independently to have arrived at the same conclusion, as
illustrated by the fact that they both accept that annulment proceedings are
restricted to certain very concrete cases and that the competence of an ad hoc
committee extends only to annulment justified on one or other of the specific
grounds enumerated in Article 52 of the ICSID Convention, rather than on
any general presumption.
30. There being no error that is susceptible of rectification, Argentina’s
request for rectification is rejected.
(c) Whether the Committee erred in describing the Respondent’s
position in relation to the possibility of a partial annulment and
its consequences (paragraph 67 of the Decision)
31. Once again, the Respondent’s request comprises an inappropriate
attempt to revise the wording of the Decision as it concerns the Committee’s
summary of the parties’ allegations, rather to “rectify” any error within the
meaning of Article 49(2). Indeed, the Committee is unable to identify any
specific error in paragraph 67 of the Decision, notwithstanding Argentina’s
view to the contrary. As stated above, in summarising the parties’ positions in
relation to a particular issue, the Committee is by no means obliged to restate
the parties’ submissions in their entirety.
32. For these reasons, and on the same basis as for Respondent’s request
for rectification “(b),” above, Argentina’s request is rejected.
(d) Whether the Committee erred in stating that the Respondent was
not making a late annulment application by way of a counterclaim
(paragraph 70 of the Decision)
33. The foregoing reasons could apply as well to the Respondent’s fourth
request for rectification. That said, there are additional compelling reasons on
the basis of which the Committee also denies this request.
34. The Respondent itself admits, in paragraph 53 of its Request, that it
had pointed out “in a subsidiary and conditional manner” the absence of consideration
of the jurisdictional issue arising from the transfer of CAA’s shares
from DyCASA to CGE. In any event, in paragraph 70 of the Decision, the
Committee clearly states that Respondent’s position to the effect that, if any
part of the Tribunal’s award is annulled its jurisdictional decision must also fall,
is not to be considered as a “late annulment application by way of a counterclaim”
or “an inadmissible counterclaim for annulment on new grounds.” It
should be stressed that the Committee did consider Argentina’s subsidiary
argument relating to jurisdiction, and did so in full.
35. The Committee need not and will not re-visit the parties’ respective
positions as to whether or not Argentina’s submissions were in fact “late.”
Suffice it to state that the Respondent has identified no error whatsoever that
requires rectification, and that its request for rectification is therefore rejected.
(e) Whether the Committee erred in stating that the Respondent
argued that there was a contradiction between the Tribunal’s
reasons concerning jurisdiction and its reasons concerning the
merits of the dispute (paragraph 72 of the Decision)
36. Paragraph 72 of the Decision similarly refers to the parties’ positions
concerning the Tribunal’s jurisdictional finding and the annulment of that
aspect of its Award. And in this instance, the Decision does reveal an error: the
word “Respondent” in the third sentence should read “Claimants,” since it was
in fact the Claimants which “…argued, in the alternative, that there was a contradiction
between those reasons and the reasons given by the Tribunal concerning
the merits.” This clerical error can easily and accurately be remedied
by changing one word, without the need to delete the entire sentence, as
requested by Argentina.
37. Accordingly, this element of Argentina’s Request is granted, in part.
The third sentence of paragraph 72 of the Decision shall be rectified by the
substitution of the word “Claimants” for the word “Respondent.”
(f ) Whether the Committee erred in stating that neither party disputes
that a tribunal commits an excess of powers if it fails to
exercise its jurisdiction (paragraph 86 of the Decision)
38. In paragraph 86 of its Decision, the Committee described what it considered
to be the settled and uncontroversial principle that a tribunal may
commit an excess of powers not only by purporting to exercise a jurisdiction
that it does not possess, but also by failing to exercise a jurisdiction that it in
fact does possess. In so doing, the Committee stated that “neither party disputes”
this proposition.
39. It is true, however, that the Respondent – although only in its
Memorial, and not in its subsequent written submissions on annulment or
during the hearing – made the arguments relating to the issue that are enumerated
in paragraph 59 of its Request. The Committee interpreted the
Respondent during the oral hearing as – at least – not stressing this argument
any longer, but accepts that it was not formally abandoned. As such, the phrase
“neither party disputes” could be seen as a clerical or similar error, which in no
way affects the merits of the Decision.
40. Accordingly, and for the sake of accuracy, the first sentence of paragraph
86 of the Decision shall be rectified by the deletion of the words “, and
neither party disputes.” Respondent’s Request is thus granted in this respect.
(g) Whether the Committee erred in summarizing the arguments of
the Respondent in relation to the treatment by the Tribunal of
the Tucumلn claims (paragraph 93 of the Decision)
41. As with the majority of its specific requests for rectification, the
Respondent has failed to identify, in this particular request, any clerical, arithmetical
or similar error susceptible of rectification. Once again, its objective
appears to be to have the Committee substantially alter the summary, in paragraph
93 of the Decision, of what it appreciated as the most relevant aspects
of the parties’ positions concerning the issue under consideration. It goes without
saying that such a summary could obviously be approached in a number
of different ways. The important point, however, is that paragraph 93 contains
no identifiable error. On the contrary, the Committee is of the opinion that it
captures the essence of the Respondent’s submissions, in particular as they
were developed in the oral hearings.
42. For these reasons, this element of Argentina’s Request is denied.
D. COSTS
43. In its Decision, the Committee determined that “in the light of the
importance of the arguments advanced by the parties in connection with this
case, [it] considers it appropriate that each party bear its own expenses
incurred with respect to this annulment proceeding…” The same cannot,
however, be said of the present phase of the proceeding. Indeed, in all but two
instances, the Committee has found that the various requests that comprise
Respondent’s Request are not only unfounded but inappropriate, consisting
essentially of attempts to re-argue substantive elements of the Committee’s
Decision.
44. In the circumstances, the Committee finds that each party shall bear
all of its own costs incurred in connection with the Request for
Supplementation and Rectification of the Committee’s Decision, but that
Argentina shall pay the entirety of the fees and expenses incurred by the
Committee in connection with the above-mentioned request of Argentina.
E. DECISION
45. For the foregoing reasons, the Committee DECIDES:
(a) Respondent’s Request for a supplementary decision is denied;
(b) Respondent’s Requests for rectification are denied, with the exception
of the following:
(i) The third sentence of paragraph 72 of the Decision is rectified by
the substitution of the word “Claimants” for the word
“Respondent”;
(ii) The first sentence of paragraph 86 of the Decision is rectified by
the deletion of the words “, and neither party disputes.”
(c) Each party shall bear all of its own costs incurred in connection with
the Request for Supplementation and Rectification of the Committee’s
Decision, and Respondent shall pay the entirety of the fees and
expenses of the Committee in connection with the above-mentioned
request of Argentina.
Done in English and Spanish, both versions being equally authoritative.
L. YVES FORTIER, C.C., Q.C.
President of the Committee
Professor JAMES R. CRAWFORD Professor JOSة CARLOS FERNANDEZ ROZAS
Member Member