tutorial video tutorial video Discover the CiteMap in 3 minutes

Addendum

I. PROCEDURAL BACKGROUND

1.
This Addendum is to be read as forming part of the Award issued in this matter dated December 21, 2018 (the "Award"). All defined terms and names used in the Award shall have the same meaning herein.
2.
The names of counsel, appearing on this proceeding, and addresses are the same as set out in the Award.
3.
The names and addresses of the members of the Tribunal remain as set out in the Award.
4.
The courtesy copy of the Award was provided to the parties by the Secretariat January 3, 2019, with originals of the Award couriered thereafter.
5.
The Respondent Maple, on February 1, 2019 filed an Application For Correction of the Award under the provisions of Article 36 of the Rules (the "Application").
6.
By correspondence dated February 14, 2019, the ICC Court requested $14,000.00 from Maple as an advance against additional fees and expenses of the Tribunal and additional ICC administrative expenses, which amount was duly paid.
7.
In accordance with the provisions of Article 36, the Tribunal fixed March 8, 2019 as the date by which the Claimant Aguaytía might respond.
8.
On February 27, Aguaytía requested the Tribunal to order Maple to produce a new document that Maple had cited in its Application, but not produced, namely a motion to annul the Award filed by Maple January 31, 2019 in a Peruvian court.
9.
On March 2, 2019 the Tribunal refused Aguaytía’s request to produce this additional document on the grounds that it was not relevant to the issues before the Tribunal.
10.
On March 7, 2019, Aguaytía filed its Comments on Respondent’s Application.
11.
On April 1, 2019 the Tribunal submitted a draft Addendum to the Secretariat for scrutiny by the ICC Court.
12.
The Tribunal having considered the submissions issues this Addendum to the Award.

II. MAPLE’S APPLICATION

13.
The Application is broken down into eight sections. Maple submits:

a. The award contains typographical and factual errors;

b. The Tribunal erroneously applied the Agreement’s price formula to deliveries made after the Agreement expired;

c. The Tribunal incorrectly held that Maple was unjustly enriched at Aguaytía’s expense;

d. The Tribunal erroneously held that Aguaytía’s deliveries after the Agreement expired were not erratic;

e. The Tribunal should acknowledge its lack of jurisdiction over the invoices contained in the Pledge Agreement and clarify its position on any amounts collected by Aguaytía in execution of the Pledge;

f. The Tribunal overlooked language in the Arbitration Clause relating to events that occurred after the Agreement expired;

g. The Tribunal incorrectly failed to reduce Aguaytía’s damages by the amount it drew down the Letters of Credit.

14.
Each of these submissions is dealt with below.

A. The Legal Test for Correction and Interpretation

15.
The legal test for correction and interpretation of the Award is set out at Article 36 of the applicable 2017 ICC Arbitration Rules which states:

Correction and interpretation of the Award;

Remission of Awards

1 On its own initiative, the arbitral tribunal may correct a clerical, computational or typographical error, or any errors of similar nature contained in an award, provided such correction is submitted for approval to the Court within 30 days of the date of such award.

2 Any application of a party for the correction of an error of the kind referred to in Article 36(1), or for the interpretation of an award, must be made to the Secretariat within 30 days of the receipt of the award by such party, in a number of copies as stated in Article 3(1). After transmittal of the application to the arbitral tribunal, the latter shall grant the other party a short time limit, normally not exceeding 30 days, from the receipt of the application by that party, to submit any comments thereon. The arbitral tribunal shall submit its decision on the application in draft form to the Court not later than 30 days following the expiration of the time limit for the receipt of any comments from the other party or within such other period as the Court may decide.

16.
As noted above, the Respondent’s Application was made to the Secretariat February 1, 2019, and was filed in a timely manner in accordance with Article 36(2).

Typographical and factual errors

17.
Maple submits that the Award contains typographical errors within the definition of Article 36, in particular relating to the names of witnesses who testified in the arbitration. In particular, the Award identifies Raul Espinoza incorrectly as Raul Espinosa and Carlos Fossati as Mr. Fassati.
18.
The Tribunal acknowledges these typographical errors and agrees to correct them under its power under Article 36. It apologizes to Mr. Espinoza and Mr. Fossati for the error.
19.
Maple further submits that the Tribunal incorrectly described Aguaytía’s natural gas extraction operation at paragraph 38 of the Award, by stating it fractionates the hydrocarbons it extracts into three different products: dry natural gas, LPG, and natural gasoline. Maple points out that the uncontradicted evidence of Mr. Hanks is that the hydrocarbons which are extracted come out of the ground as dry gas and natural gas liquids. Aguaytía separates the dry gas from the natural gas liquids and then the natural gas liquids are fractionated. In other words it is an error to say that Aguaytía fractionates the dry gas.
20.
Aguaytía submits that the detailed factual description of Aguaytía’s business is irrelevant and immaterial as the only relevant point is that the Gasoline is a residual byproduct from the fractionation process; that it needed to be disposed of, and it formed one of three separately marketable products. It submits that notwithstanding the foregoing, it has no objection to corrections related to the "typographical minutiae."1
21.
The Tribunal concludes that paragraph 38 of the Award contains a misstatement in the articulation of an undisputed fact which it considers to be an error of similar nature to a "clerical, computational or typographical error". It therefore agrees to amend paragraph 38 as shown in bold italics below:

38. Aguaytía extracts hydrocarbons from the Peruvian Amazon jungle in an area designated as Block 31-C under a license from the Peruvian government. Two products are extracted: dry natural gas and natural gas liquids. Aguaytía fractionates the natural gas liquids into LPG and natural gasoline. Aguaytía, at all times relevant to this arbitration, sold:

i. Its dry natural gas production to Termoselva, a thermal power generator which it wholly owns;

ii. Its LPG production to distributors, who sell the bottled product locally; and

iii. All natural gasolines extracted or separated from such hydrocarbons ("Gasolines") to Maple.

B. Disagreements with the Tribunal’s findings

22.
The remaining applications raised by Maple summarized at 6(c) to (g) above concern disagreements with the findings that the Tribunal made with regard to the principal issues in dispute. As Aguaytía noted in its submission, such applications do not raise "clerical, computational or typographical" errors under Article 36. Nor are they a request for interpretation of the Tribunal’s decision under Article 36(2) since no request is raised to resolve uncertainty as to the precise meaning of any part of the Award but rather to change the conclusions reached. Rather, the remaining applications are a motion for reconsideration or appeal on the substance of the Tribunal’s conclusions which fall outside the scope of Article 36 and the arbitration agreement itself which states unequivocally "[t]he decisions of the arbitrators are final and binding on all Parties and are not subject to appeal."2 The Tribunal will consider each objection separately below applying these criteria. In its analysis, the Tribunal will simply verify the nature of the objection and determine if it falls within the scope of Article 36.

1. The Tribunal erroneously applied the Agreement’s price formula to deliveries made after the Agreement expired

23.
Maple submits that the Tribunal found the Agreement ended in accordance with its terms on March 1, 2016, but then applied the Agreement’s price formula to deliveries made after that date. It submits this is a "clear error".3
24.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s analysis and findings respecting an appropriate price following the termination of the Agreement. Accordingly, the Tribunal must deny this request.

2. The Tribunal incorrectly held that Maple was unjustly enriched at Aguaytía’s expense

25.
Maple submits that the Tribunal incorrectly applied the legal test for unjust enrichment.
26.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s legal analysis. Accordingly, the Tribunal must deny this request.

3. The Tribunal erroneously held that Aguaytía’s deliveries after the Agreement expired were not erratic

27.
Maple submits that the Tribunal was in error when it held that deliveries of natural gasoline after the Agreement expired on March 1, 2016 were not erratic. It states that this is contrary to the evidence.
28.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s findings of fact based on the evidence submitted. Accordingly, the Tribunal must deny this request.

4. The Tribunal should acknowledge its lack of jurisdiction over the invoices contained in the Pledge Agreement and clarify its position on any amounts collected by Aguaytía in execution of the Pledge

29.
Maple submits that by referencing the Pledge Agreement in its Award, the Tribunal ought to have acknowledged it did not have jurisdiction to deal with the 2014 Invoices under the Agreement.
30.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s analysis and findings on jurisdiction. Accordingly, the Tribunal must deny this request.

5. The Tribunal overlooked language in the Arbitration Clause relating to events that occurred after the agreement expired

31.
Maple submits that as the words of the Arbitration Clause in the Agreement refer to Disputes during the term of the Agreement and as the Tribunal found the Agreement terminated March 1, 2016, the Tribunal should find it lacked jurisdiction to decide disputes after that date.
32.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s analysis and findings on its jurisdiction. Accordingly, the Tribunal must deny this request.

6. The Tribunal incorrectly failed to reduce Aguaytía’s damages by the amount it drew down the Letters of Credit

33.
Maple submits that in calculating the damages of Aguaytía, the Tribunal failed to reduce those damages by $3,439,992.00, an amount that Aguaytía drew down on Letters of Credit it held from Maple. Maple states these draw downs were conceded by Aguaytía.
34.
The Tribunal does not consider this request for correction to fall within the definition of a clerical, computational or typographical error or a request for interpretation as set out in Article 36 of the Rules, but goes to the Tribunal’s analysis and findings of fact based on the evidence before it. Accordingly, the Tribunal must deny this request.

III. COSTS

35.
By email sent 15 March 2019, the Tribunal asked the parties to provide their submissions as to the costs of this Application by 22 March 2019.
36.
Maple submitted that, consistent with the Tribunal’s determination respecting costs in the Award, no attorneys’ fees should be awarded in this Application.
37.
Aguaytía submitted that notwithstanding the Tribunal’s ruling on costs in the Award, it should be awarded the costs of this Application, as, other than the typographical errors that Maple raised, its purported "corrections" relate to issues that go to the heart of the Tribunal's holdings and thus falls beyond the scope of Article 36 of the ICC Rules.
38.
Having reviewed those submissions, the Tribunal sets out its decision below.
39.
As set out in paragraphs 187-194 of the Award, the Tribunal found that the language of the arbitration agreement ousted the Tribunal’s usual jurisdiction under the ICC Rules to award attorneys’ fees to the prevailing party as part of its power to award costs, including arbitrators’ fees and the ICC administrative expenses.
40.
Article 36(3) of the ICC Rules provides:

A decision to correct or to interpret the award shall take the form of an addendum and shall constitute part of the award....

41.
As this Application forms part of the arbitral process and this Addendum forms part of the Award, we find that we have no jurisdiction to award attorneys’ fees, for the reasons set out in the Award.
42.
The Tribunal awards the costs of the Application (being the tribunal costs and ICC administrative costs) against Maple for the following reasons. The two minor clerical errors raised by Maple and accepted by the Tribunal were not the object of any objection by Aguaytia and could have been addressed by consent in inter-parties correspondence. The remaining issues raised fall clearly outside the scope of Article 36 and relevant commentary and decisions on that Article and trespassed into an inadmissible request for reconsideration or appeal.

IV. DISPOSITION

43.
For the reasons set out above, the Tribunal AWARDS, DECIDES and ORDERS:

a. All references in the Award to Mr. Raul Espinosa shall be read as referring to Mr. Raul Espinoza;

b. All references in the Award to Mr. Carlos Fassati shall be read as referring to Mr. Carlos Fossati;

c. Paragraph 38 of the Award is amended to read as follows:

38. Aguaytía extracts hydrocarbons from the Peruvian Amazon jungle in an area designated as Block 31-C under a license from the Peruvian government. Two products are extracted: dry natural gas and natural gas liquids. Aguaytía fractionates the natural gas liquids into LPG and natural gasoline. Aguaytía, at all times relevant to this arbitration, sold:

i. Its dry natural gas production to Termoselva, a thermal power generator which it wholly owns;

ii. Its LPG production to distributors, who sell the bottled product locally; and

iii. All natural gasolines extracted or separated from such hydrocarbons ("Gasolines") to Maple.

d. Maple Gas Corporation del Peru S.R.L is to pay the costs of this Application fixed by the ICC Court as follows:

i. Administrative expenses $3,000.00

ii. Arbitrators’ fees and expenses $11,000.00

e. All other requests for correction are dismissed.

f. This Addendum may be signed in counterpart

Whole document
para.
Click on the text to select an element Click elsewhere to unselect an element
Select a key word :
1 /