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دوشنبه 31 خرداد‌ماه سال 1389 ساعت 07:20 ب.ظ

[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) Argentinas 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 Tribunals failure

to account for the fact that the transfer of CAAs 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 CGEs 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 Respondents 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 Tribunals 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 Respondents 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 COMMITTEES ANALYSIS

1) Limits on the Scope of a Request for Supplementation/

Rectification

10. Before addressing the issues raised by Argentinas 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 Respondents Request.

2) On the Request for Supplementary Decision

13. As mentioned, the Respondents 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 Argentinas claim that the

Tribunals decision upholding its jurisdiction in the arbitration was undermined

by its failure to account for the manner in which CAAs 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

Respondents 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 Committees view, and contrary to what is argued by the

Respondent, neither the Committee nor indeed the Arbitral Tribunal omitted

to consider Argentinas position concerning the circumstances surrounding the

transfer of CAAs shares from DyCASA to CGE or the consequences of that

transfer as regards the Tribunals 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 Respondents 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 Argentinas 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 Committees 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

Argentinas 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 CAAs 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 Respondents case concerning the Committees

alleged omission the only case open to Respondent under Article 49 of the

ICSID Convention Argentinas 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 Committees

view (as, evidently, in the Tribunals 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

Tucumans agreement to its acquisition of DyCasas 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 Tribunals 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

Respondents 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 Argentinas 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 Respondents 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 Respondents 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 CGEs 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 CGEs

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 CAAs 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, Argentinas

request for rectification is rejected.

(c) Whether the Committee erred in describing the Respondents

position in relation to the possibility of a partial annulment and

its consequences (paragraph 67 of the Decision)

31. Once again, the Respondents request comprises an inappropriate

attempt to revise the wording of the Decision as it concerns the Committees

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 Argentinas

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 Respondents request

for rectification (b), above, Argentinas 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 Respondents 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 CAAs shares

from DyCASA to CGE. In any event, in paragraph 70 of the Decision, the

Committee clearly states that Respondents position to the effect that, if any

part of the Tribunals 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 Argentinas 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 Argentinas 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 Tribunals

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 Tribunals 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 Argentinas 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. Respondents 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 Respondents submissions, in particular as they

were developed in the oral hearings.

42. For these reasons, this element of Argentinas 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

Respondents Request are not only unfounded but inappropriate, consisting

essentially of attempts to re-argue substantive elements of the Committees

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 Committees 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) Respondents Request for a supplementary decision is denied;

(b) Respondents 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 Committees

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

 

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