2007 Loan Transaction | Agility's initial investment of USD 250 million to fund Korek's license fee payment in 2007 |
2011 Equity Transaction | The transaction between Agility, Orange, and Korek whereby Agility and Orange acquired an indirect stake in Korek from Korek's Iraqi shareholders |
2015 BIT or BIT | Agreement Between the Government of the State of Kuwait and the Government of the Republic of Iraq for Reciprocal Promotion and Protection of Investments, which entered into force on 4 February 2015 |
Arbitration Rules | ICSID Rules of Procedure for Arbitration Proceedings (2006) |
Agility or Claimant | Agility Public Warehousing Company K.S.C., a company incorporated under the laws of the State of Kuwait |
Alcazar | Alcazar Capital Partners, Agility's wholly-owned subsidiary |
CMC | Communications and Media Commission |
CMC Order | The decision of the CMC dated 2 July 2014, which provided that the 2011 Equity Transaction was void |
ICSID Convention | Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965 |
ICSID or the Centre | International Centre for Settlement of Investment Disputes |
Iraq or Respondent | The Republic of Iraq |
IH | International Holdings Limited, incorporated in the DIFC to serve as IT Ltd's common holding company |
Iraqi Administrative Court | The Shoura Administrative Court in Iraq |
IT Ltd | Iraq Telecom Limited, a company owned by Agility and Orange as a joint venture vehicle |
KCR Decree or KCR Administrative Order | KRG Directorate of Registration of Local Companies, Administrative Order No. 4961 dated 19 March 2019 |
Korek | Korek Telecom Company LLC, an Iraqi telecommunications company incorporated in August 2000 |
KRG | The Kurdistan Regional Government of Iraq |
KRG Guarantee | A guarantee issued by the KRG for the benefit of Agility in connection with its investment in Korek in 2007 |
For the Claimant :
Mr. Cyrus Benson Gibson, Dunn & Crutcher LLP
Mr. Rahim Moloo Gibson, Dunn & Crutcher LLP
Mr. Philip Shapiro Gibson, Dunn & Crutcher LLP
Mr. Philipp Kurek Kirkland & Ellis International LLP
Mr. Bader El-Jeaan Meysan Partners
Mr. Abdulwahab Sadeq Meysan Partners
For the Respondent :
Mr. Donald Francis Donovan Debevoise & Plimpton LLP
Ms. Catherine Amirfar Debevoise & Plimpton LLP
Ms. Sarah Lee Debevoise & Plimpton LLP
Ms. Tegan Grace Debevoise & Plimpton LLP
Court Reporter:
Ms. Diana Burden Diana Burden Reporting
For the Claimant:
Mr. Cyrus Benson Gibson, Dunn & Crutcher LLP
Mr. Rahim Moloo Gibson, Dunn & Crutcher LLP
Ms. Lindsey Schmidt Gibson, Dunn & Crutcher LLP
Mr. Philip Shapiro Gibson, Dunn & Crutcher LLP
Mr. Patrick Taqui Gibson, Dunn & Crutcher LLP
Mr. Philipp Kurek Kirkland & Ellis International LLP
Mr. Bader El-Jeaan Meysan Partners
Mr. Abdulwahab Sadeq Meysan Partners
For the Respondent:
Mr. Donald Francis Donovan Debevoise & Plimpton LLP
Ms. Ina Popova Debevoise & Plimpton LLP
Mr. Nawi Ukabiala Debevoise & Plimpton LLP
Ms. Sarah Lee Debevoise & Plimpton LLP
Mr. Andrew Esterday Debevoise & Plimpton LLP
Mr. Simon Alton Debevoise & Plimpton LLP
Mr. Salem Chalabi Stephenson Harwood LLP
Court Reporters :
Ms. Georgina Ford Briault Reporting
Mr. Ian Roberts Briault Reporting
(1) The Tribunal dismisses the Respondent's jurisdictional objection ratione temporis in respect of the Claimant's denial of justice claim.
(2) The Tribunal dismisses the Respondent's jurisdictional objection ratione temporis in respect of the Claimant's claim arising from the Respondent's alleged failure to implement the CMC Order.
(3) The Tribunal allows the Respondent's jurisdictional objection ratione temporis in respect of the rest of the claims made by the Claimant in its Memorial.
(4) As to all other matters, the Tribunal retains in full its jurisdiction and powers generally to decide such matters in these arbitration proceedings, whether by order, decision or award.
For the Claimant :
Mr. Cyrus Benson Gibson, Dunn & Crutcher LLP
Mr. Rahim Moloo Gibson, Dunn & Crutcher LLP
Ms. Lindsey Schmidt Gibson, Dunn & Crutcher LLP
Mr. Moeiz Farhan Gibson, Dunn & Crutcher LLP
Mr. Philip Shapiro Gibson, Dunn & Crutcher LLP
Mr. Patrick Taqui Gibson, Dunn & Crutcher LLP
Ms. Wendy Cai Gibson, Dunn & Crutcher LLP
Mr. Sam Berman Gibson, Dunn & Crutcher LLP
Mr. Bader El-Jeaan Meysan Partners
Mr. Abdulwahab Sadeq Meysan Partners
Ms. Abby Cohen Smutny White & Case LLP
Mr. Brody Greenwald White & Case LLP
Mr. John Willems White & Case LLP
Ms. Noor Davies White & Case LLP
Mr. Samy Markbaoui White & Case LLP
Mr. Andrei Popovici White & Case LLP
Experts:
Mr. Santiago Dellepiane A. Berkeley Research Group
Mr. Eric Madsen Berkeley Research Group
Mr. Noah Feldman Harvard Law School
Ms. Reema Ali AP Consulting
Witnesses:
Mr. Tarek Sultan Agility Public Warehousing
Mr. Ihab Aziz Agility Public Warehousing
For the Respondent:
Ms. Catherine Amirfar Debevoise & Plimpton LLP
Ms. Ina Popova Debevoise & Plimpton LLP
Ms. Elizabeth Nielsen Debevoise & Plimpton LLP
Ms. Sarah Lee Debevoise & Plimpton LLP
Ms. Suzanne Zakaria Debevoise & Plimpton LLP
Ms. Mary Grace McEvoy Debevoise & Plimpton LLP
Mr. Richard A. Brea Debevoise & Plimpton LLP
Mr. Ramsey Nassar Debevoise & Plimpton LLP
Mr. Salem Chalabi Office of the Prime Minister of the Republic of Iraq
Experts:
Mr. Robert Grien TM Capital Corp.
Dr. Reyadh Al-Kabban Al-Kabban & Associates
Court Reporter:
Ms. Claire Hill Claire Hill Realtime Reporting
Interpreter :
Mr. Marwan Abdel-Rahman
(a) IH, a holding company incorporated in the Dubai International Financial Centre (the "DIFC"), wholly owned Korek.
(b) Iraq Telecom Limited ("IT Ltd"), the Claimant's and Orange's investment vehicle incorporated in the DIFC, held 44% of the shares in IH. The Claimant held 54% of IT Ltd through the Cayman Islands company, Alcazar, and Orange held 46% through the company, Atlas Services Nederland B.V. ("Atlas"), incorporated in the Netherlands.
(c) Korek International (Management) Limited ("CS Ltd"), the Iraqi Shareholders' investment vehicle incorporated in the Cayman Islands, held the remaining 56% of the shares in IH. An Iraqi national, Mr. Sirwan Barzani, owned 75% of the shares in CS Ltd.
"... take the procedures to revoke and terminate any contracts assigning shares in [Korek]'s capital that were concluded after 13/3/2011, prove this revocation in the legal entries with the companies registrar and provide [the CMC] with a new statement proving the return of shares to their original owners" (the "CMC Order").34
(a) DECLARE that Respondent is in breach of its obligations under the BIT and customary international law;
(b) DIRECT Iraq to pay USD 614.1 million in damages for the value of (i) the Sovereign Guarantee backed Convertible Note reinstated plus interest accrued through today's date, and (ii) the return of USD 50 million cash investment plus pre-award interest as a result of Iraq's partial and improper implementation of the CMC Order;
(c) In the alternative to (b), DIRECT Iraq to pay USD 552.7 million in damages for the value of the Sovereign Guarantee-backed Convertible Note reinstated and honored plus interest accrued through today's date caused as a result of Iraq's partial and improper implementation of the CMC Order and/or its repudiation of the Sovereign Guarantee;
(d) In the alternative to (c), DIRECT Iraq to pay Agility USD 652.1 million in damages as the value of Agility's indirect equity position in Korek as of 1 July 2014 assuming Orange exercises Call Option plus pre-award interest as a result of Iraq's denial of justice;
(e) In the alternative to (d), DIRECT Iraq to pay Agility USD 353.1 million in damages as an alternative calculation of value of Agility's indirect equity position in Korek as of 1 July 2014 plus pre-award interest as a result of Iraq's denial of justice;
(f) ORDER interest not covered in any damages award, including post-award interest on all sums awarded at a rate established on the amount of the award;
(g) ORDER Iraq to pay all costs of and associated with this arbitration, including Agility's legal fees and expenses, management time, legal counsel, witnesses, experts and consultants' fees and expenses, administrative fees and expenses of the International Centre for Settlement of Investment Disputes, and the fees and expenses of the Arbitral Tribunal together with post-award interest on those costs so awarded; and
(h) AWARD such other and further relief as the Tribunal deems just and proper.70
(a) Denying in full the relief Agility requests in paragraph 315 of its Reply;
(b) Ordering Agility to pay all the costs of the arbitration and reimburse the Republic's costs (including attorneys' fees) incurred in the arbitration, plus interest thereon at a commercially reasonable rate, if payment is not received by the Republic within 30 days of the issuance of the Final Award; and
(c) Ordering such other relief as the Tribunal may determine to be just and appropriate.71
(a) an unlawful expropriation of Agility's investment;
(b) a violation of fair and equitable treatment;
(c) an impairment of Agility's investment by arbitrary and discriminatory measures;
(d) a failure to accord Agility's investment full protection and security;
(e) a failure to provide national treatment protections; and
(f) a breach of the MFN Clause of the BIT by failing to observe its obligations.
Investments of investors of one Contracting Party in the territory of the other Contracting Party shall not be nationalized, expropriated or otherwise subjected to any other measures having effect equivalent to nationalization or expropriation (hereinafter referred to as "expropriation") by the other Contracting Party except for public purpose that pertains to national interest of that Contracting Party and against prompt, adequate and effective compensation. The expropriation shall be carried out on a non-discriminatory basis in accordance with generally applicable legal procedures.94
For the purposes of this agreement, the term "expropriation" shall also apply to interventions or regulatory measures by a Contracting Party that have the same effect as expropriation results in depriving the investor in fact from his ownership, control or substantial benefits over his investment or which may result in loss or damage to the economic value of his investment such as the freezing or blocking of the investment, levying arbitrary or excessive tax on the investment, compulsory sale of all or part of the investment, or other comparable measures.95
We inform you that, after long and deep study of the subject of partnership between your company and the foreign French company France Telecom/Agility, studying its different legal and factual aspects, and in respect of the authority granted to our Commission by virtue of the terms of the meeting which was held on 21/4/2011 between our Commission and your company, and based upon the regulatory role exercised by our Commission within the framework of verifying that the suspension conditions have been met, upon which the partnership was based, and to determine the appropriate legal consequences, including the revocation of the mentioned partnership in light of the fact that the suspension conditions have not been collectively met, the Board of Commissioners decided, in its session held on 24/6/2014, in report No. 19/2014, to consider the approval of our Commission based upon the principle of partnership dated 29/5/2011 as void and null as the suspension conditions, to which you were committed to fully carry out, have not been met by virtue of the report of the meeting dated 21/4/2011 and by virtue of your repetitive letters.
Thus, we inform you by virtue of this letter of the final decision of our Commission by considering the partnership, desired between you and the foreign French company France Telecom/Agility, as void, null and invalid because the related suspension conditions have not been met, and for lack of evidence thereof without any legal or material effects of any type whatsoever. And we warn you in this respect to immediately proceed, within a period of no later than 15 days from the date of this letter, to reinstate the status as it was on 13/3/2011, take the procedures to revoke and terminate anycontracts assigning shares in your company's capital that were concluded after 13/3/2011, prove this revocation in the legal entries with the companies registrar and provide our Commission with a new statement proving the return of shares to their original owners. Otherwise, your company shall bear all the legal consequences and necessary procedures will be taken against your company to compel you to obey and execute the content of the decision mentioned above.102(emphasis added)
Korek company requested approval to dispose of the license for the interest of a third party based upon Article 24, paragraph b, being Korek Holding company that is intended to be established in Dubai provided that the latter contributes to the company composed of Orange and Agility; 56% of the shares to CS Ltd company and 44% of the shares to IT Ltd company composed of Orange and Agility provided that the approval is based upon the following conditions
...
In case of failure to meet any of the following conditions, this approval shall be considered invalid and all consequences thereof are invalid, and Korek company shall not be entitled to file an appeal against the decision…109
[Korek] may not assign, sub-license, transfer, or otherwise dispose of this License Agreement, or the rights derived therefrom, in favor of any third party for a period of two years after the Effective Date [i.e. 30 August 2009], and may do so thereafter only as is provided for in this License Agreement and with the prior written approval of [the CMC].110(emphasis added)
(a) providing written approval for Korek to "assign, sub-license, transfer, or otherwise dispose of this License Agreement, or the rights derived therefrom, in favor of any third party" after 30 August 2009 under Article XXIV(B); and
(b) providing written approval for "any direct or indirect change in the control of a significant interest in [Korek], including a change arising through the sale, transfer, assignment, sub-licensing, disposal or modification of voting rights associated with Qualifying Shares", without which such assignment would be deemed unlawful and in breach of the License Agreement under Article XXIV(C). A 'significant interest' is defined in Article XXIV(C) to mean "ten percent (10%) or more of the Qualifying Shares then in issue or ten percent (10%) or more of the total voting rights then outstanding in [Korek]."
(a) With regard to the reinstatement of the KRG Guarantee (which forms the core of the Claimant's expropriation claim), a precondition for the operation of the KRG Guarantee is the existence of the Convertible Note. In this regard, the Claimant has accepted that the Convertible Note must be reinstated before the KRG Guarantee can be reinstated.122 However, there is nothing which suggests that the CMC has the authority to order that the Convertible Note be reinstated. The Claimant has not pointed to any basis for the CMC to compel Korek to reinstate the Convertible Note which is a private contractual arrangement between Korek and Alcazar.
(b) The Tribunal accepts the Respondent's argument that the issue of whether the Convertible Note or the Claimant's additional investment needs to be restored to it, and on what terms, is a matter governed and determined by the various transactional documents between the Claimant, Korek, and Orange and not by the CMC Order, which only addresses the discrete issue of the share transfer.123
(c) With regard to cancellation of new shares, the Tribunal notes that the source of the CMC's authority to regulate Korek's shares stems from Article XXIV(C) of the License Agreement, which is solely concerned with the change in control of a significant interest in Korek's shareholding. As such, the Tribunal is persuaded that the CMC Order only requires the percentages of Korek's shares to be reinstated and is indifferent as to the number of shares transferred or revoked. Again, any issues regarding the reversal of the issuance of additional shares is to be governed by the contractual documents between the relevant parties and not the CMC.
(d) In any case, even if the CMC Order somehow required the CMC to cancel the new shares, the Tribunal is of the view that this cannot amount to a breach of the 2015 BIT due to a lack of causation. As observed in Lauder v. Czech Republic, in order for a finding of compensable damage to be made, it is necessary that there exists no intervening cause for the damage.124 In the present case, the Claimant has not denied that the KCR could not unilaterally have decreased Korek's share capital under Iraqi law without a properly issued request from Korek to that effect.125 As noted by the Respondent, Korek's failure to initiate any decrease in share capital does not, and cannot, constitute a BIT breach by Iraq.
(e) With regard to the return of the USD 162.5 million received by the CMC, it appears to the Tribunal that these fees cannot be said to be a consequence of the CMC's approval under its 29 May 2011 Letter which ought to be reversed under the CMC Order. Instead, these fees were payable as a result of the License Agreement, which pre-dates the 2011 Equity Transaction.126
1- Order was issued to cancel the administrative order no. (2959), dated 07/20/2011 [i.e. KCR Order No. 2959].
2- It was ordered to restore the company's shares to the period before 03/13/2011.
....
7-The percentages of shares were changed in the following manner:
Sirwan Saber Mostafa: 75 percent Chavshin Hassan Chavshin: 20 percent
Jaghshi Hamou Mostafa: 5 percent." (emphasis in original)127
…[A]t the request of the shareholders of Korek Telecom Co. Ltd, registered under the entry no. 167 on 16/8/2000, we issue the following orders based on authorities and responsibilities delegated to us:
1. Excluding all the shares of Mr. Sirvan Saber Mostafa, equal to 75% of the company shares
2. Excluding all the shares of Mr. Chavoshin Hassan Chavoshin, equal to 20% of the company shares
3. Excluding all the shares of Mr. Jaghsi Hamu Mostafa, equal to 5% of the company shares
4. Registering all the shares of Mr. Sirvan Saber Mostafa, equal to 75%, Mr. Chavoshin Hassan Chavoshin, equal to 20% and Mr. Jaghsi Hamu Mostafa, equal to 5% of the company shares under the new shareholder of the new Emirates International Holdings.
...
6.The number of shares will be as follows:
Emirates International Holding Company [i.e. IH] 100%....
(emphasis in original)128
(a) the KCR Decree violated due process as it was issued without a court order, without notice to the Claimant and without a legitimate purpose; and
(b) the Claimant's legitimate expectations have been frustrated by the Respondent eviscerating the arrangements in reliance upon which it was induced to invest. In this regard, the Claimant claims that the KRG Guarantee was considered a "condition precedent" to the Claimant's investment in Korek that induced the Claimant's investment and that the Claimant "would never have accepted an unsecured debt position in Korek at any time."134
Investments by investors of either Contracting Party in the territory of the other Contracting Party shall be given equitable and fair treatment and shall enjoy full protection and security in consistence with its laws and regulations as well as the provisions of this agreement.139
[t]he fact that key points of disagreement went unanswered and were not disclosed in a timely manner, that silence was kept when there was evidence of such persisting and aggravating disagreement, that important communications were never looked at, and that there was a systematic attitude not to address the need to put an end to negotiations that were leading nowhere, all are manifestations of serious administrative negligence and inconsistency. The Claimants were entitled to expect that the negotiations would be handled competently and professionally, as they were on occasion.141
…(a) clear and explicit (or implicit) representations were made by or attributable to the state in order to induce the investment, (b) such representations were reasonably relied upon by the Claimants, and (c) these representations were subsequently repudiated by the state.142
… pursuant to Order No. (65) issued by the Coalition Provisional Authority regarding the Iraqi Communications and Media Commission, clause 6 of Section 8 of the aforementioned decision stipulated that the decisions issued by the Appellate Board are final decisions because the Appellate Board is one of the Communications and Media Commission's bodies, is chaired by a judge, and its decisions are binding under the law, are final, and do not require a court decision to enforce them.146
Claimant does not claim it had any expectation at the time of its Investment that the KRG Guarantee would be reinstated. To the contrary, it is Claimant's case that at the time of its Investment in Iraq, it did not expect, and could not have expected, that Iraq would later issue the unlawful CMC Decision, and therefore that the Sovereign Guarantee would need to be reinstated in light of Iraq's own Order.151
The Claimant has also claimed that the Respondent's "partial and improper" implementation of the CMC Order: (a) impaired the Claimant's investment by arbitrary and discriminatory measures in breach of Article 3(3) of the 2015 BIT; (b) failed to accord the Claimant's investment full protection and security in breach of Article 3(2) of the 2015 BIT; and (c) failed to provide national treatment protection under Article 4 of the 2015 BIT.
The Respondent is silent on whether the MFN clause at Article 5(1) and (2) of the 2015 BIT could apply to import the Umbrella Clause.163
Q. So Agility exchanged the 2007 Convertible Note for equity in Korek in lieu of cash, and that resulted in Agility being repaid under the 2011 Investment Transaction structure, isn't that right?
A. I mean, repayment in the sense of cash, that I can comfortably say has never been the case. But as I mentioned, it was a contribution into the transaction, in exchange for shares.
Q. So it was in exchange for equity, that's your point?
A. Yes.
Q. And here, when [Alcazar] transferred the 2007 Convertible Note in 2011, in lieu of cash, the Convertible Note was extinguished when [Alcazar] was effectively paid in full, is that right?
A. I mean, it was exchanged for shares, and accordingly, the Convertible Note has been exchanged for the 23.7% in Korek.169
As of the 31 December 2010, no repayments against principle [sic] loan or interest amount were made which resulted in accrued interest calculated at a rate of 9%, and the right of conversion has not been exercised.
During the year 2011, the company has paid the principal loan and the related interest in full.173
Furthermore, the Respondent emphasizes that the Claimant cannot establish that international law requires that Korek be allowed to challenge the CMC Order in a forum that had no jurisdiction over the claim, which the Claimant knew.195 The Respondent further submits that prior tribunals have found that States have the freedom to set up their legal systems however they wish, and "[i]t is not for treaty tribunals to second-guess the national legislator's express designation of an appellate authority" nor "to wade into matters of the spheres of competence of national courts."196
... To meet the applicable test, it will not be enough to claim that municipal law has been breached, that the decision of a national court is erroneous, that a judicial procedure was incompetently conducted, or that the actions of the judge in question were probably motivated by corruption. A denial of justice implies the failure of a national system as a whole to satisfy minimum standards …
The Tribunal has also borne in mind, as these legal materials confirm, that the doctrine of denial of justice essentially addresses procedural unfairness and not (by itself) an error of fact or applicable national law, although both may equally defeat the complainant's substantive rights.201
The general rule is that 'mere error in the interpretation of the national law does not per se involve responsibility.' Wrongful application of the law may nonetheless provide 'elements of proof of a denial of justice.' But that requires an extreme test: the error must be of a kind which no 'competent judge could reasonably have made Such a finding would mean that the state had not provided even a minimally adequate justice system.202
… The responsibility of States not to breach the fair and equitable treatment standard through a denial of justice is engaged if and when the judiciary has rendered final and binding decisions after fundamentally unfair and biased proceedings or which misapplied the law in such an egregiously wrong way, that no honest, competent court could have possibly done so.203
The Tribunal emphasises again that an international arbitration tribunal… is not an appellate body and its function is not to correct errors of domestic procedural or substantive law which may have been committed by the national courts. The Tribunal stresses that the threshold of the international delict of denial of justice is high and goes far beyond the mere misapplication of domestic law.204
[PRESIDENT]: Just so I understand your evidence, am I right to understand that you say that IT Limited had standing in the administrative courts?
A. Yes, sir.
[PRESIDENT]: Do I understand you to mean therefore that the Iraqi courtsystem actually permits IT Limited an avenue to intervene, but the court got it wrong when it denied the intervention ?
A. That's correct.206
The administrative court shall have the jurisdiction to adjudicate the validity of individual and organisational administrative orders and decisions issued by the officials and agencies of ministries, and bodies that are not affiliated with a ministry and the public sector, and wherein no appellate authority is designated, based upon a request from a person who has known, current and possibleinterest. However, a potential interest is sufficient if there is reasonto fear harm to those concerned.207
The provisions of Civil Procedure Law No. (83) of 1969, Evidence Law No. (107) of 1979 [i.e. the Civil Procedure Code] … on the procedures followed by the Supreme Administrative Court, the administrative court and the official Administrative Court shall apply to any matter not specifically addressed in this law.210
1- Any person of interest may request to be engaged in the suit as a third party, whether to join one of the suit's litigants or to independently apply for a judgment in his favor. Such a person shall be connected to the suit or to one of the litigants therein (whether in a joint liability or in a separable commitment) or if the judgment in the suit was thought to affect the same.
2- Each litigant may request the court to engage a person holding a proper capacity that would have enabled him to be a litigant in the case at the time it was filed, or to preserve the right of both litigants or of one of them….211
Either litigant may object to the intervention of a third party in the claim. If the court deems that the intervention or impleader is not based on a serious interest, and is only meant to delay theproceedings, then the court shall decide to reject to such intervention or impleader, and shall continue to pursue the suit's proceedings.212
… the court noted there is a request submitted by the legal representative of IT Ltd. in the previous hearing in which he requests the court permission to intervene as third-party in this case, and the court had postponed the case to review the submitted request and review the case file. Further, the court completed the case file and decided to decline the request submitted by the representative of the third party to intervene in the case as a third party) (noting the applicant did not attend the session).214
Decisions of the Commission, whether rendered by the Director General or the Hearings Panel, may be appealed to the AppealsBoard
…
The Appeals Board, upon hearing timely arguments from the parties, may uphold, overturn or remand decisions or orders before it to the Director General or the Hearings Panel. Once upheld by the Appeals Board, decisions are final.221
The Federal Supreme Court finds that the [CMC] Appeals Board constituted under the [Order 65], which was constituted of three members under the chairmanship of a judge, constitutes an appealbody recognized in law. It has jurisdiction to hear appeals brought against decisions issued by the Director-General of the [CMC] and also decisions issued by the Hearing Committee in the aforementioned Authority. These are decisions of a special nature which require to be heard by a body which includes within its membership specialists in the subject being heard, in addition to its chairmanship which is undertaken by a judge. Hence the presence of an appeal body consisting of the Appeals Board is in accord with what is stated in Article 100 of the Constitution and is not a contravention of it. A statement to the contrary requires that there are numerous appeal bodies with the task of hearing the decisions of the appeal bodies provided for legally and this does not exist in the legal aspect because it prevents the stability of legal situations and decisions will be in a vicious circle. Furthermore, Article 100 of the Constitution did not provide for restriction of the appeal to administrative acts or decisions before the judiciary. Rather it established a general constitutional principle. This is that it is not permitted to provide immunity from appeal for these actions or decisions issued by administrative bodies. It left to the legislator to specify the appeal body according to the administrative acts or decisions of the administrative bodies in accordance with the nature of these acts and decisions.
Based on this, determination of the appeal body the legislator specifies in Article 6 of Section 8 of [Order 65] is a legislativechoice. It does not constitute a contravention of the Constitution and this is firmly established in the constitutional judiciary within Iraq in numerous judgments ….224
… The [CMC] Appeals Board … is formed of three members headed by a judge, and is considered as an appeal entity of law, because it ensures neutrality and administrative professionalism, as it is competent to consider the appeals against the decisions issued by the director general of the [CMC], in addition to the decisions issued by the (Hearing Committee) in the mentioned Commission, therefore the existence of an appeal entity represented by (the [CMC] Appeals Board) is in accordance with the provision of article (100) of the Constitution and doesn't violate it because the mentioned article does not provide for the right to appeal against the judicial work or decisions. Therefore, the texts and procedures subject of the appeal are considered a legislative option, and do not violate the Constitution. This is established in the judgments issued by this court including judgments no. (50/federal/2017) and no. (53/federal/2017) dated 06/20/2017 and 07/27/2017. Accordingly, the Plaintiffs' lawsuit has lost its constitutional substantiation, and it should be dismissed from this aspect.225
It is undisputed that a breach of due process, whether in judicial proceedings or in administrative proceedings, may result in the violation of the FET standard. But the due process standard operates differently in different settings. In administrative proceedings … the decision-maker is often the investigator, the accuser, and the adjudicator, and a related officer (who may be the senior officer of the decision-maker) is often the one who rules on appeal. Due process does not require strict separation of these functions - provided that the final administrative decision is subject to full judicial review. The private individual must have an opportunity to have the case revisited, this time by an independent and impartial judge, with the guarantee of a formal adversarial procedure.236
Q. … In your view, the Zain proceedings that you describe in your report, and that we just discussed right now, show that CMC decisions are susceptible to judicial challenge, is that right?
A. Yes.
Q. In that case, the civil courts accepted jurisdiction over Zain's claims relating to a CMC decision that had been confirmed by the CMC Appeals Board, is that right?
A. Yes, because CMC in theory had standing in that court and they have jurisdiction over it, because it is a party to a licence agreement, and it is actually saying, "I have an issue with the licensor over – we have a dispute over this contract, and in the provision of 29 of the Civil Code it actually covers all disputes including disputes between a licensee and a licensor of CMC."
Q. Korek had a dispute with the CMC, correct?
A. Yes.
Q. So Korek could have gone to civil courts?
A. Korek could have, IT couldn't.
Q. And if Korek went to civil courts, then IT Limited, in your view, IT Limited could have joined in reliance of Articles 69 through 72 of the Civil Procedure Code which allows for joinder?
A. Possibly, yes, but Korek decided not to do, and Korek is not IT.242
[PROF. MURPHY] if the Iraqi Government takes an action such as through an administrative agency that causes harm to someone, and that person or company wants to bring a case in the civil courts for the harm that they have experienced, it's not for the purpose of overturning the administrative action, it's accepting the legality of that action, but it believes that incurred a tortious harm, a non-contractual harm, if you will, is that action something that the civil courts would be able to hear under your understanding of Iraqi law?
A. Yes, if the government committed a tort, a private party can sue it in the civil courts, that's correct.243
a. the Claimant bear the full amount of the Tribunal's fees and expenses and direct expenses of USD 58,670.20 incurred in respect of the bifurcation phase;252
b. the Respondent will bear one quarter and the Claimant three quarters of the Tribunal's fees and expenses and direct expenses of USD 125,949.77 for the jurisdiction phase.253
Statement of Professional Fees
DESCRIPTION | AMOUNT / USD |
PROFESSIONAL FEES | |
Attorney's Fees | |
Gibson, Dunn & Crutcher LLP | 4,286,589.52 |
White & Case LLP | 3,026,515.05 |
Kirkland & Ellis International LLP | 709,447.35 |
Meysan Partners | 189,330.00 |
TOTAL ATTORNEYS' FEES | 8,211,811.92 |
Witness and Expert Fees | |
Jan Paulsson | 64,800.00 |
Reema Ali | 653,690.88 |
Berkeley Research Group/Compass Lexecon | 1,435,949.34 |
Professor Noah Feldman | 179,600.00 |
TOTAL WITNESS & EXPERT FEES | 2,334,040.22 |
CLAIMANT'S TOTAL PROFESSIONAL FEES | 10,545,922.14 |
Statement of Costs
DESCRIPTION | AMOUNT |
ADMINISTRATIVE COSTS | |
Gibson, Dunn & Crutcher LLP | 292,277.63 |
White & Case LLP | 1,067.72 |
Kirkland & Ellis International LLP | 66,546.42 |
TOTAL ADMINISTRATIVE COSTS | 359,891.77 |
ARBITRATION COSTS | |
ICSID Lodging Fee | 25,000.00 |
ICSID Advance Payments | 355,000.00 |
TOTAL ARBITRATION COSTS | 380,000.00 |
CLAIMANT'S TOTAL COSTS | 739,891.77 |
DESCRIPTION | AMOUNT / USD |
PROFESSIONAL FEES | |
Attorney's Fees | |
DEBEVOISE & PLIMPTON LLP | 3,811,054.89 |
STEPHENSON HARWOOD MIDDLE EAST LLP | 459,000.00268 |
TOTAL ATTORNEYS' FEES | 4,270,054.89 |
Witness and Expert Fees | |
Al-Kabban & Associates (Dr. Reyadh Al-Kabban) | 262,093.33 |
The Analysis Group (Mr. Robert Grien) | 430,683.00 |
TOTAL WITNESS & EXPERT FEES | 692,776.33 |
THE REPUBLIC'S TOTAL PROFESSIONAL FEES | 4,962,831.22 |
ADMINISTRATIVE COSTS | |
DEBEVOISE & PLIMPTON LLP | 76,657.06 |
ARBITRATION COSTS | |
ICSID Advance Payments since 20 May 2019 | 80,000.00 |
THE REPUBLIC'S TOTAL COSTS | 156,657.06 |
THE REPUBLIC'S TOTAL FEES & COSTS | 5,119,488.28 |
In the case of arbitration proceedings the Tribunal shall, except as the parties otherwise agree, assess the expenses incurred by the parties in connection with the proceedings, and shall decide how and by whom those expenses, the fees and expenses of the members of the Tribunal and the charges for the use of the facilities of the Centre shall be paid. Such decision shall form part of the award.
Without prejudice to the final decision on the payment of the cost of the proceeding, the Tribunal may, unless otherwise agreed by the parties, decide … with respect to any part of the proceeding, that the related costs … shall be borne entirely or in a particular share by one of the parties.
Arbitrators' fees and expenses | |
President Cavinder Bull, S. C. | 169,588.14 |
Co-arbitrator John Beechey | 82,899.62 |
Co-arbitrator Sean Murphy | 147,960.88 |
ICSID's administrative fees | 158,000.00 |
Direct expenses (estimated) | 83,024.02 |
Total | 641,472.66 |
(1) The Tribunal dismisses all the Claimant's claims on the merits and denies in full the relief sought by the Claimant in the Claimant's Memorial and the Claimant's Reply.
(2) The Claimant shall pay the Respondent's professional fees and administrative costs fixed at USD 5,039,488.28 and a proportion of the arbitration costs fixed at USD 136,116.36.
(3) In the event that the amount owing under (2) above is not received by the Respondent within 30 days from the issuance of this Award, the Claimant shall pay interest to the Respondent at the 6-month USD rate of LIBOR + 2% (as at the time of the Award) on any outstanding amount, compounded semi-annually.
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