• Copy the reference
  • Tutorial video

Lawyers, other representatives, expert(s), tribunal’s secretary

Final Arbitral Award

Abbreviations / Defined Terms
CM + number Denotes a submission filed by Claimant (written sub-mission/memorial, letter)
CX + number Exhibited documentary evidence filed by Claimant
C-WS + number Witness statement or expert report filed on behalf of Claimant
1RM + number Denotes a submission filed by Respondent 1 (written submlssion/memorial, letter)
2RM + number Denotes a submission Filed by Respondent 2 (written submission/mennorial, letter)
RX + number Exhibited documentary evidence filed by Respondents
R-WB - number Witness statement or expert report filed on behalf of Respondent
AIPT or Alternative Terminal IAT) The BOT- Project (build-operate- transfer project), launched in 2007 as a PPP (public-private partnership) with the Northern Capital Gateway Consortium for the construction of an alternative International passenger terminal ("AIPT") at Pulkovo Airport. The 51-page Dewey & LeBoeuf Preliminary information Memorandum (CX-89) on the Project contained (he Prequalification Criteria for the applicants (and affiliates) requiring inter alia to own total assets of US$ I billion, and a demonstration that the applicant has operated and maintained at least one airport with at least 10 million passengers per year, and proven fund" raising ability during the last 3 years for two US$ 500 mio plus projects.
Charter means the 1595 Charter of the Closed Joint Stock Company 'International Airport Terminal Pulkovo', (CX-5); It was executed in the Russian language (RX- 2); Respondents filed an English translation as RX-24
DMG Deutsche Morgan Grenfell & Co., Ltd, London
Foreign Parties as defined in the ingress of the Founders' Agreement,

mean Pulkovo (Strategic Partners) Limited, a Cypriote company, Grassi Hotelbeteiligungs und Errichtungs GMBH (an Austrian private company) ant SPED Investment Ltd., a Cypriote company; the term, as used in the framework of this Award, includes Claimant (as the transferee pursuant to CX-66/CX-59
Founders' Agreement means the 1995 IAT Pulkovo Founders Agreement (CX-6); It was executed in the Russian language (RX-1); Respondents Filed an English translation as RX-23
Ground Lease means the Agreement on the Lease of a land plot consisting of an area of 51'300 m2 located at Pulkovskoe Highway - Startovaya ul, in respect of which the Ground Lease was signed and which was Intended for the construction of the NIPT (CX-17)
IAT Pulkovo means the investment vehicle for the International passenger terminal at the Pulkovo Airport, i.e, the Closed Joint Stock Company "International Airport Terminal Pulkovo’, as per the Charter, CX-5
Investment Contract This term was used by the Parties to denote the 1995 IAT Pulkovo Founders Agreement (CX-6) and the 1995 Pulkovo Charter (CX-5), which contain terms For developing and operating an international passenger terminal at the St, Petersburg Pulkovo Airport; in CM- 84 para. 7, Claimant characterized the contract as a SOT scheme (build - operate - transfer project). The Charter as such, under Russian law, is not considered to constitute a contract in the ordinary sense.
NIPT abbreviation for the New International Passenger Terminal at Pulkovo Airport, as projected in 1994 by way or the Protocol of Agreement and the Founders' Agreement respectively the Charter
PH - Brief | C-PH-Brief | R-PH-Brief | The Post-Hearing Memorials filed by Claimant, respectively by Respondents 1 and 2, on 20 January 2012
Russian Parties The term, as used in thi$ Award, denotes all of Ute Respondents/shareholders of IAT Pulkovo, as well as - according to the context - IAT Pulkovo itself
Project The NIPT development project as contemplated under the Protocol of Agreement

Protocol of Agreement Means the "Agreement" signed on 16 March 1994 (CX-2; in these proceedings, this document was mostly referred to as 'the Protocol of Agreement")
PSP Pulkovo (Strategic Partnere) Limited is a Cypriot company, said to be in good legal standing (letter of Antis Trianaflyllides & Sons of 0 April 2011), which can be brought up to date within 6 months, upon payment of fees; CX-24I; there was no need to ascertain the actual status as of the date of this Award
SP Strategic Partners, Inc. (USA)
SPH Strategic Partners (Holdings) Limited Is a Cayman Islands Company, which was struck from the Company's Register on 31 October 2005, but - according to Claimant - its reinstatement could be sought within two months, and upon Court approval; letter of Cayman Island's counsel Broadhurst Barristers of 24 March 2011 and letter of Cayman Island Registrar of Companies of 2S March 2011 (CX-242/243). There was no need to ascertain the actual status as of the date of this Award.
SPBD SPBD Investment Ltd, a Cypriote company, controlled by Russian-American persons.
Transcript plus Date The verbatim Protocols established by professional court reporters, of the Hearings In Zurich 16/17 De cumber 2010 and in Stockholm 18 to 21 October 2011

A The Parties, their Representatives and the Arbitrators

The names and further details of the Parties and their representatives in these proceedings are as named on the first two pages of this Award.
Likewise, the Arbitrators, their nomination and their addresses, are as shown on the first page of this Award.
Claimant Dr Carl A Sax, a US citizen, lawyer and entrepreneur, described himself as a developer who had created end led partnerships and corporations engaged in the development, construction, ownership, syndication and management of income-producing properties for more than 20 years and who was, in the 1990s, the Senior Vice President and General Counsel of Atlantic Coast Airlines.
In hrs written witness statement of 15 October 2010 (CWS-1), Mr Sax referred to 14 airport projects around the globe in which Strategic Partners (Holdings) Limited (CI) ("SPH") and Mr Sax personally (as the Vice Chairman) were involved in proposed developments, these included projects In Russia, Vietnam, Gibraltar, Senegal, the Philippines, Guatemala, Congo, Ecuador, Indonesia, Honduras, Pakistan, Armenia, Jamaica and Uruguay.1
In the EBRD Memorandum, CX-23, Mr Sax was described, as "the principal legal advisor and negotiator for the American sponsors; he is the leading force behind the Project; he was formerly an associate at Dewey Ballantine LLP, and subsequently worked in the in-house legal departments of United Express and Continental Airlines, giving him a wide range of contacts in the international airline business. "
Mr Sax bases the claims submitted In this arbitration on a purchase agree ment between Strategic Partners (Holdings) Limited (Cayman lslands)(SPH) and its 100% subsidiary Pulkovo (Strategic Partners) Limited (Cyprus)(PSP), as sellers/transferors/assignors, and Mr Carl A. Sax as purchaser/transferee/ assignee, dated 17 December 2002 (CX-66/CX-59), under which Mr Sax became the assignee of a "USS 20+ million pre-development expense receivable from IAT Pulkovo" and a purchaser and transferee of a 29.7% stock-interest in IAT Pulkovo.
Strategic partners (Holdings) Limited (SPH), ad described in the EBRD Memorandum, CX-23, is a limited liability company (with a capital of US$ 10'000,--, created by the STV Group as well as numerous other shareholders, including Sax (Holdings) Ltd, with a share of 28.82%, and STV International, AIG, DMG, several junior lenders, Charles Bauccio, TF Comeau & Assoc., AvPride Petroleum, Quantum Investments, and seven further shareholders, SPH was created for developing and eventually carrying out airport investments world-wide, whereby SPH would be the provider of know how.
SPBD Investment Ltd. is a Cyprus company incorporated in 1991, acting as a consultant and liaison for investors developing projects In Russia and FSU countries, owned by CEBM, Inc. (New Jersey) whose principals were described being Russian American Individuals, Mark and Lena Zilberquit, and Valentina Lifton. CX-23, EBRD Memorandum p. 51.
STV Group is a US architecture, designer and engineering company, and shareholder of SPH. Head-quartered in New York, STV was described as having a staff of about 1'000 persons. CX-23, EBRD Memorandum page 49.
Respondent 1 is the City of St. Petersburg, and Respondent 2 is the Property Management of the City of St. Petersburg, an agency of Respondent 1, established as a separate corporate body.
Respondent 3, State Enterprise’'Pulkovo", "SEP' was described as being the owner of the assets at Pulkovo Airport and the entity directing the flow of air traffic; on 9 June 2006, a Decree was passed permitting the privatization of State Enterprise Pulkovo. CX-145. On 1 March 2007, it was converted into an open joint-stock company, thus named (OJSO) "Airport Pulkovo"; on information, the Russian Federation became the owner (CX-R3).

As Claimant explained, the Pulkovo-Airport was transferred to the City of St. Petersburg, by Presidential Decree signed by President Putin on 25 September 2007.2


Respondents 4, OJSC Aviation Company "Rossiya" and Respondent 5 OSO Airport Pulkovo are legal successors to State Enterprise "Pulkovo" which had been a party to the Founders' Agreement, and had been described as being the owner of the assets at Pulkovo Airport. State Enterprise Pulkovo was privatized by a decree of the Government of the Russian Federation of 9 June 2006.

Respondents 3 to 5 did not file substantive submissions in these proceedings; they cooperated in so far as the nomination of Respondents' arbitrator Is concerned, and Respondent 5 filed a letter dated 29 September 2009 in which it declared to be in agreement with the Statement of Defense filed by Respondents 1 and 2. However, at all times Respondents 3 to 5 have been kept abreast of the proceedings, were always served with the documents on file and the Tribunal's Orders, and were repeatedly specially invited and encouraged by the Tribunal to actively participate in the proceedings or, at least, to delegate a representative or management member to the Hearings.
In addition to the regular communications to all Respondents emanating from the Tribunal and from Claimant, Claimant filed special Notice Letters to Respondents 4 and 5 (CM-83) notifying them of the Stockholm Liability Hearing taking place during the four days from 18 to 21 October 2011 at the Strandvagen 7A Conference Center.

B Claimant's Summarized Chronology of the Circumstances Underlying the Present Dispute

This Arbitration involves certain claims by Claimant Mr Sax (as assignee and successor-in-interest of PSP and SPH, according to a Purchase Agreement dated 17 December 2002, CX-66, and a Bill of Sale, CX-59), against the Respondents, for breach of various agreements relating to the development of a New International Passenger Terminal ("NIPT") at the St. Petersburg's "Pulkovo" International Airport.
The following paragraphs summarize the history largely on the basis of Claimant's Submissions and from Claimant's point of view. Several elements of Claimant's chronology and characterizations as hereinafter reflected have been disputed by Respondents and, to the extent necessary for the Tribunal's decisions, are discussed In further parts of this Award, Moreover, the following account only references some - but by no means all - of the steps, letters, contracts, meetings, or other milestones in the history of the relationship between the Parties.
As will be further noted within the chronology of the proceedings, Claimant -at the Stockholm Liability Hearing 18 to 21 October 2011 - submitted two graphic time-line charts reflecting the steps which Claimant referred to in numerous written submissions filed in this arbitration; these two charts provide a good overview of Claimant's case and, therefore, are incorporated in this Award as a part of the chronological development of the Investment Project, without such Incorporation amounting to an acceptance, by the Tribunal, of the allegations made by Claimant in connection with the steps reflected in the time-line of the charts, See the following two pages.
In December 1991, Claimant Hr Carl A. Sax, as he explained, travelled to St. Petersburg in order to discuss the lease or aircraft, In the discussions with representatives of the Office of the Mayor and the St, Petersburg City Council, Claimant, as he explained, was asked to form and invite a consortium of Western companies for exploring the redevelopment of Pulkovo Airport and, in particular, for the development of a New International Passenger Terminal which later became known as Pulkovo-3.
Hr Sax states that, in January 1992, he had received a "mandate letter" from the City of st. Petersburg authorizing him to form and invite a consortium of Western companies for the purpose of exploring the development of an international passenger terminal for the Pulkovo airport. The mandate letter was not filed; upon inquiry of the Tribunal, Claimant replied at the Stockholm Hearings that he had been unable to trace that letter.3
Based on such mandate, Mr Sax, in 1992/1993, slated to have met with representatives of the City of st. Petersburg and representatives of several Western companies, including American international Group, Aeroports de Paris, STV Group, Inc., Butler Aviation, Morgan Grenfell & Co., Ltd, in several cities including St. Petersburg, Paris, London, Washington and Now York, for the purpose of discussing the development of Pulkovo-3.
During those meetings (which took place with, among others, Vladimir V. Putin, who at the time was the Vice Mayor of the City of St. Petersburg, and the acting Mayor Anatoly A Sobchak), the request earlier addressed to Mr Sax to form a consortium of Western companies was renewed on behalf of the City of St. Petersburg.
On 16 March 1994, Strategic Partners, Inc., USA, ("SP") represented by Mr Sax as its Senior Vice President, SPBD, Inc. represented by it President Mark A. Zilberquit, the Office of the Mayor of St. Petersburg (represented by Vice Mayor and Chairman of the External Affairs Committee, Vladimir V. Putin), the Department of Aviation of the Ministry of Transportation of the Russian Federation, jointly represented by Yuri I. Baranov (Chief of infrastructure Development Division of the Department of Aviation, Moscow) and by Yuri A. Balakin (General Director of Northwestern Directorate of Civil Aviation, St. Petersburg), and the Air Enterprise Pulkovo (represented by Boris G. Demchenko, General Director), entered into an Agreement (the "Protocol of Agreement" ', CX-2) under which the Parties agreed to jointly redevelop the St. Petersburg's Pulkovo International Airport, by developing Pulkovo-3. To the extent necessary. Further details regarding this Protocol of Agreement Shall be referred to In a further Chapter of this Award.
On 19 March 1995, (1) the City of St. Petersburg (represented by the Property Management Committee, the latter represented by M.B. Manevitch, Committee Chairman and A.V, Vorontsov, Chief of Agency), (ii) the State Enterprise Pulkovo (represented by B,G. Demchenko, Director General, and G5. Naprienko Deputy Director General) and (iii) PSP (represented by Mr Sax, Executive Vice President), entered into a Founders' Agreement (CX-6) for the purpose creating a special purpose company - IAT Pulkovo - for jointly developing the New International Passenger Terminal ("NIPT"), and by signing the Charter of IAT Pulkovo (CX-5).
On 1 May 1996, IAT Pulkovo (represented by Boris G. Demchenko, Mr Sax (of PSP) and the City of St. Petersburg (represented by the Property Management Committee, the latter represented by V.M. Urkovits, the head of the Real Estate Transaction Execution Department) entered into the Ground Lease, thereby leasing the land plot on which the New International Passenger Terminal was to be developed (CX-17). The Ground Lease provided, in part, for a term of 45 years and an option to renew the Lease for an additional 45 years.
From 1995 through 1997, Claimant, through the offices of STV Group, Inc., In conjunction with other providers, prepared studies for the conceptual design drawings for the New International Passenger Terminal.
Moreover, during that period, Claimant retained various consultants including The MDA Group (U.K), Alan Stratford & Associates Air Transport Planning Consultants Ltd.. Tochecon Ltd. and Sir William Hacrow & Partners Ltd., for providing consulting services to review the design of the project structure, the project costs and the financing for the New International Passenger Terminal, These consultants were retained in order to obtain funding for the project which, initially, was sought from Overseas Private Investment Corporation (OPJC) and Deutsche Morgan Grenfell & Co. (DMG), and thereafter from the European Bank of Reconstruction and Development (EBRD).
It is Claimant's case in these proceedings that all of these steps, including the mandating of numerous third party providers, were undertaken for and on behalf of IAT Pulkovo.
Moreover, according to Claimant, the working on the Pulkovo project included the approval, in May 1995, of the design and the financing structure for the New International Passenger Terminal by Alan Stratford & Associates Air Transport Planning Consultants Ltd., followed, in August 1995, by letters of the Lenaeroprojekt institute regarding required governmental consents (CX-10), and a letter by Oleg Kharchenko (Chief Architect of the City of St, Petersburg) consenting to the location and design of the New International Passenger Terminal (CX-9).
Furthermore, Claimant explains that 25 agencies of the City of St. Petersburg also approved the location and design of the New (International) Passenger Terminal (CX-20, 21 and 22).
On 13 December 1995, Avia Invest, on behalf of the Department of Aviation of the Ministry of Transportation of the Russian Federation, also delivered a letter to IAT Pulkovo, preliminarily approving the design of the New International Passenger Terminal (CX-8).
On 13 February 1995, Aeroports de Paris, at the request of the EBRD, approved the design (CX-11).
On 1 March 1996, IAT Pulkovo requested that the International Air Transport Association (IATA) approve the design, rates and charges of the New International Passenger Terminal. The 1996 EAT Pulkovo presentation to IATA included a reference to the development fee as an expense factor Of the project costs (CX-18).
On 10 April 1996, Coopers & Lybrand prepared a valuation Analysis for the EBRD and DMG (CX-12).
On 2 May 1996, according to Claimant, EBRD delivered its financing letter to IAT Pulkovo regarding the provision of senior debt financing required for the development of the New International Passenger Terminal.4
On 8 May 1996, DMG delivered its financing letter to IAT Pulkovo, agreeing to underwrite that portion of the senior debt financing which was not provided by EBRD (CX-19).
On 11 June 1996, DMG delivered its financing letter to IAT Pulkovo, agreeing to underwrite the subordinated financing.5
On 26 June 1996, Strategic Partners advised the State Enterprise Pulkovo that IATA had agreed to the Rates and Charges for the New International Passenger Terminal (CX-13).
On 3 July and 26 August 1996, OPIC delivered its financing letters to IAT Pulkovo regarding its participation with the EBRD for the purpose of providing a senior debt financing for the development of the New International Passenger Terminal.6
In September 1996, IAT Pulkovo delivered to its participants and lenders the final revised conceptual plans for the New International Passenger Terminal (CX-16).
On 27 September 1996, the Federal Aviation Service of the Russian Federation advised the EBRD that State Enterprise Pulkovo would be able to comply with certain of its obligations to permit the development of the New International Passenger Terminal.7 A similar letter was addressed on 4 October 1996 by JSC "Pulkovo Aerodromstro".
On 10 October 1996, the State Enterprise Pulkovo advised EBRD that It would be able to comply with certain of its obligations to permit the development of the New International Passenger Terminal.8
On 15 October 1996, according to Claimant, the Board of Directors of IAT Pulkovo approved, in principle, the EBRD, OPIC and DMG financing offers, and - in Claimant's words - authorized and empowered Claimant Hr Carl Sax to negotiate, in the name of IAT Pulkovo9, definitive documents with the EBRD, OPIC, DMG and other parties, and to execute and deliver these documents together with Boris G. Demchenko (Chairman of IAT Pulkovo), (CX-14).10
In 1997, EBRD delivered its International Airport Terminal Pulkovo Operations Committee Final Review, CX-23, As stated by Claimant, this Review inter alia referenced a development fee as well as pre-closing services as a shareholder contribution to capital. Furthermore, it referenced the PreDevelopment Advance, a portion of which was to be rolled-over into a US$ 5 million PSP Standby Loan The 1997 EBRD Review also referenced the agreements of the City of St. Petersburg to complete the access road and utilities (CX-23)
On 14 January 1997, Claimant advised Respondents that the EBRD will submit the financing proposal to its Credit Committee. Furthermore, Claimant advised Respondents that he had fulfilled the financing requirement under the Charter and the Founders' Agreement, and that all outstanding issues would be resolved by Claimant and Respondents so as to expedite the financial dosing (CX-31).
On 14 March 1997, Strategic Partners advised Respondents by letter that six items critical for the successful completion had not been timely completed by Respondents (CX-32).
On 18 March 1997, the Russian Security Committee approved the design of Pulkovo-3 (CX-30, document in the Russian language only).
On 16 April 1997, STV International, at Claimant’s request, provided a document package relating to the project (CX-26).
In May 1997, the City of St. Petersburg and State Enterprise Pulkovo were advised in a fax memorandum of SP that IAT Pulkovo was positioned to obtain final EBRD Credit Committee approval upon resolution of three issues:

First, evidence of the financial ability of the City of St. Petersburg to comply with its agreement to finance US$ 16+ million to construct access roadways and utilities for servicing the New International Passenger Terminal, and the proposed guarantee of the City of St. Petersburg's obligation by the Ministry of Finance of the Russian Federation.

Second, the financial ability of State Enterprise Pulkovo and the Federal Aviation Service of the Ministry of Finance of the Russian Federation to finance US$ 10+ million to construct the apron to service the New International Passenger Terminal, and the proposed guarantee of State Enterprise Pulkovo's obligation by the Ministry of Finance of the Russian Federation.

• The third issue related to customs duties and VAT deferrals for the construction period and its inclusion within any Ministry of Finance Guarantee (CX-25).

On 7 May 1997, Claimant advised Alexei L. Kudrin (Vice Minister, Ministry of Finance) by letter that there were three issues to be addressed for completing the financing (CX-33). Mr Kudrin was further updated by a letter dated 29 May 1997 (CX 34).
Complying with the requirement for the financing to be provided by EBRD and dmg, the City of St. Petersburg agreed to finance the construction of access roadways and utilities, and State Enterprise Pulkovo agreed to finance the construction of an apron.
In June 1997, the MDA Group performed a satisfactory risk assessment for the construction of the New International Passenger Terminal (CX-35).
On 25 July 1997, EBRD advised Mr Sax that the EBRD’s Operation Committee had given its approval, and that the EBRD believed that financial closing could take place by year-end (CX-28).
On the same day, 25 July 1997, the President of EBRD advised Governor Yakovlev that the EBRD's Operation Committee had given its approval (CX-29).
On 28 August 1997, EBRD, in a letter addressed to Claimant, informed him that the Bank’s Board of Directors had approved the Project on 27 August 1997, indicating further that "the parties to the Project must now finalize the negotiations, placement of debt and the Project Documentation, following which it will be possible to sign the loan", A time-limit as such was not given; the letter said that the Bank hopes "to complete this work by year end". Claimant was further advised that all aspects of the Project "must remain substantially in line with what has been presented to the Bank's Board of Directors" (CX-27).
On 15 January 1998, DMG delivered its IAT Pulkovo Financial Model to the participants and lenders of IAT Pulkovo (CX-42, CX-40).
On 20 February 1998, SP delivered its IAT Pulkovo Business Plan to the participants and lenders of IAT Pulkovo (CX-41).
On 8 June 1993, the EBRD established on internal Memorandum which Indicates that the Board basically approved the BOT- Project with project costs of US$ 187 million and an EBRD loan of US$ 120 million, indicating further that negotiations of the technical agreements with the Western parties are substantially complete, but that progress towards a closing of the operation is hampered by a number of elements, one being the sporadic presence of SP in Russia, another being the slow review process of the documentation by the City of St. Petersburg and the Airport, and the third being the fact that the Ministry of Finance had indicated that the Project Company would have to apply for the Specified Events Guarantee through the channels that are used for full sovereign guarantees, a process which might take 6 months+ (CX-36).
On 8 July 1998. SP submitted a draft independent Accountants' Report (CX-44) to Mr Sax.
On 15 July 1998, Strategic Partners advised the Governor Vladimir A. Yakovlev that EBRD had approved the financing already on 25 August 1997, that Since then various parties had been working towards financial closing, that basically a new version of the Charter had been drafted, subject to the final agreement of the City of St. Petersburg, and that various participants, Including the EBRD and dmG, had become concerned that the City of St. Petersburg had not taken all steps required Vo close the financing on an expedited basis, and that in fact the City of St, Petersburg was delaying the closing as a result of certain unspecified considerations (CX-43).
On 16 July 1998, on proposal of Mr Sax, a seminar preceding the shareholders meeting took place at which the EBRD proposal was discussed. RX-54.11
On 17 July 1998, SP commented on a Report regarding the separation of Pulkovo-3 as an independent enterprise (CX-38). In its Memorandum, SP suggested a revision of the Report in several respects.
In August 1998, according to Claimant, the financing proposal required to permit the construction of the New International Passenger Terminal failed to close"as a result of the delay of the City of Sr. Petersburg and State Enterprise Pulkovo in approving and executing the required documentation before the August 1998 Financial Crisis" (CM-2, para 63))n this context, Claimant repeated earlier allegations that the Crcy of St. Petersburg and State Enterprise Pulkovo were unable to pay for the construction of the access roadways, the utilities and the apron.12
According to Claimant, on 17 February 1999, the Board of Directors of IAT Pulkovo approved the creation of a Working Commission to address the matters required to recommence the stalled development of the New International Passenger Terminal (CX-46).
In July 1999, the Working Commission agreed to finalize negotiations for the development of the New International Passenger Terminal (CX-47).
In the further course of 1999, SP, PSP and inter alia, Skanska SOT AB entered into a Development Agreement for the purpose of restructuring certain Financial and technical aspects (CX-48).
On 13 October.1999, Claimant informed the IATA of the intention to reanimate the Pulkovo-3 Project, raising questions as to the level of charges for international passengers. His query was answered by a fax of IATA dated 14 October 1999 (CX-45).
On 16 February 2000, the recently formed Consortium With Skanska BOT et al wrote a letter to Mr Sax withdrawing from the Consortium and Development Agreement, since It had not been possible "to produce a bankable Development Plan for the Project" (CX-51, without signatures).
On 29 February 2000, Claimant advised State Enterprise Pulkovo that the proposed gallery extension to Pulkovo-2 (i.e. the then existing International passenger Terminal) might be adverse to the interests of IAT Pulkovo and its shareholders, but that he might be inclined to favourably consider entering into a sub-lease for the requested land at an acceptable rental rate, and if the construction of the proposed gallery was structured as the initial phase of Pulkovo-3 (CX-49).
On 15 November 2000, SP addressed a letter to Mr Anatoly A. Aleksashin, Vice Governor of the City of St. Petersburg, describing the services which Strategic Partners had performed In respect of the Pulkovo-3 Project, stating therein that "unfortunately, final negotiations to permit approval of financing for Pulkova-3 by IAT Pulkovo were interrupted by the August 1998 Russia Federation Financial Crisis". The letter further expressed the firm belief in the Viability of Pulkovo-3 and, in order to reactivate the Project, Strategic Partners submitted a draft Protocol of Agreement regarding the development, financing and operating of Pulkovo-3 and the acquisition, financing and operation of Pulkovo-2, with the hope that the City of St. Petersburg and the Russian Federation would confirm their interest in concluding the negotiations regarding Pulkovo-2 and Pulkovo-3 (CX-54, with Protocol of Agreement CX-55 and Protocol Agreement among Shareholders, CX-56).
On 6 December 2000, the letter was acknowledged by Mr A.A. Mercianov, Vice Chairman of the Committee for Economic and Industrial Policy of the City of St. Petersburg, apologizing for the problems in realizing the previously achieved agreements one understandings which were caused by the Financial Crisis of 1998, and requesting Claimant to provide a working proposal for realizing the Project considering the new financial, economic and political situation in the Russian Federation (CX-5.3).13
The letter Was followed up by a further letter addressed to Mr Sax dated 20 December 2000, acknowledging receipt of the letter of 15 November 2000 and the draft Memorandum and Agreement, and the readiness was expressed to recommend to the other shareholders to sign the Memorandum, and proposing to hold a meeting "in the second half of the year of 2001" (CX-52).
On 21 June 2001, Mr N. Karpov On behalf of Pulkovo Aviation Enterprise addressed a letter to Mr Sax enclosing a copy of the letter from Mr Trubin (Chief of the Department of the Investment Projects of KUGI) which indicated that IAT Pulkovo "lost the right for this fend (sic!) long ago". Mr Karpov requested an answer to the question whether Mr Sax agreed to discontinue the activity of the Stock Company IAT "Pulkovo" "on the voluntary basis as it is determined in Article 17. la of the Charter of the Closed Stock Company "IAT Pulkovo" dated 29.05.1995" (CX-58).
On 26 June 2001, Claimant Mr Sax replied: "Contrary to your assertion, IAT Pulkovo has not lost the right for this lease long ago. In fact, we will be wire-transferring the required lease payment later this week. Accordingly, we do not agree, to discontinue the activity of IAT Pulkovo on a voluntary basis. In addition, we will strenuously contest any effort to either discontinue the activities of IAT Pulkovo or terminate the Lease Agreement for the land under Pulkovo-3. " (CX-57).
In a "To Whom It May Concern" dated 27 June 2002, SP state that it had recently come to its attention that the State Unitary Enterprise Pulkovo and perhaps the City of St. Petersburg had undertaken the expansion of the existing international terminal (Pulkovo-2) in contravention of the current Lease Agreement for Pulkovo-3 and without regard to our many years of effort and multi-million Dollar investment, suggesting that a meeting should take place to discuss possible remedies. It is unclear to whom this document was in fact sent (CX-64).
On 21 August 2002, Mr Michael Karpov addressed a fax to SP with a letter from Mr Romanenko of KUGI, alleging overdue payments and fines in an amount of 483'592.92 Rubles, The letter was answered by SP on 2 September 2002 (CX-65).
Further correspondence was exchanged on 18 October 2002, 4 November 2002, 19 November 2002 and 21 November 2002 (CX-51, CX-62, CX-63, CX-60).
On 17 December 2002, Mr Sax became the successor-in-interest to Strategic Partners and PSP's 29.7% stock-interest in IAT Pulkovo, the PreDevelopment Advance and, as a developer of the New International Passenger Terminal, the Development Fee, by execution of a Purchase Agreement &nd delivery of a Bill of Sale (CX-66 and CX-59).
On 4 February 2003, the Arbitrazh Court of the City of St. Petersburg declined the Property Management Committee's claim for the dissolution of the Ground Lease. CX-72.
On 8 March 2003, a proposal for the development of Pulkovo-3 was put together (CX-74). It Is not apparent from this document to whom this presentation was made. Claimant explained, however, that the presentation was made to the Presidential Administration of the City of St. Petersburg.
On 16 April 2003, State Enterprise Pulkovo, by letter of Mr M Karpov, confirmed that the Arbitrazh Court of St. Petersburg declined the Property Management Committee's claim for dissolution of the Ground Lease Agreement, "and implicitly requested that SP agree to a voluntary dissolution of IAT Pulkovo ".14 Mr Sax was also informed by Mr Karpov that it was necessary to come to a final decision regarding the further operation of IAT Pulkovo, indicating further that three shareholders ("FSUAE Pulkovo, KUGI and Grassi") agreed to discontinue the activity of the Stock Company IAT "Pulkovo" on a voluntary basis (CX-69).
In May 2003, SP addressed a letter to Michael Karpov, advising inter alla that the shareholders of IAT Pulkovo must vote for voluntary termination and that State Enterprise Pulkovo, as a result of the expansion of Pulkovo-2, was in breach of the Founders' Agreement, the Charter and the Ground Lease (CX-71).
On 21 November 2003, the State Enterprise Pulkovo advised Claimant of KUGl's request (addressed to Mr Sax and Mr Demchenko) that payment must be made in respect of the Ground Lease, failing which KUGI would initiate court proceedings for collecting the payment and would Initiate "the dissolution procedure of the Lend (sic!) lease Agreement to the court". (CX-70).
On 8 June 2004, the Federal Arbitrazh Court dismissed the appeal of the Property Management Committee (Respondent 2), and refused to terminate the Ground Lease (CX-76).
On 30 September 2005, Pulkovo Airport and Pulkovo Airlines were divided into two separate entities (CX-83).
On 9 October 2006, the Federal State Unitary Enterprise State Transport Company Russia was registered in St. Petersburg, as the successor of Pulkovo Airlines, and on 29 October 2006, the latter and STC Russia started to Fly under a common flag and under the name of the merged entity, i.e The State Transportation Airline "Rossiya" (Respondent 4). CM-2 para. 108.
On 1 March 2007, Pulkovo Airport was converted into a joint-stock company named OJSC Airport Pulkovo, and the Russian Federation became the owner of Pulkovo Airport.
On 14 September 2007, Grimshaw & Partners, Ltd, won the New International Passenger Terminal design competition (CX-98).
On 25 September 2007, President V.V, Putin, by Presidential Decree, authorized the transfer of Pulkovo Airport to the City of St. Petersburg as the sole shareholder of Airport Pulkovo, OJSC, effective 29 December 2007 (CX-83).
Two days later, on 27 September 2007, a Presidential decree authorized the transfer of Pulkovo Airport to the City of St. Petersburg, which became the sole shareholder of Airport Pulkovo, effective 29 December 2007.
On 2 October 2007, Respondents, through Governor Matvienko and Dr Zilberquit, advised Claimant Mr Sax that the City of St. Petersburg intended to develop the New International Passenger Terminal without Claimant's participation (CM 2, para, 113).
On 3 October 2007, Respondent 1 - by Governmental Decree No. 1265 -authorized a strategic Investment project for developing the Pulkovo Airport and an action plan for the construction of an alternative international passenger terminal. CX-151.
On 16 October 2007, the shares of Airport Pulkovo OJSC were transferred to the City of St, Petersburg, by Governmental Decree No. 1432-IR.
On 14 January 2008, Paul A. Curran of Kaye Scholer LLP addressed a letter to Open Stock Company Airport "Pulkovo", attn Director General Murov, advising that Claimant Mr Sax is the owner of a 29.7% interest in International Airport Terminal "Pulkovo" (a Russian joint stock company) and moreover that Mr Sax

"is also the holder of a 1998 US$ 20 million receivable incurred in connection with the development of a new International airport terminal in St, Petersburg's Pulkovo International Airport, known as Pulkovo-3, presently valued in excess of US$ 50 million, and demanding on behalf of Mr Sax the reinstatement of his 29.7% interest, or the anticipated value, upon completion or Pulkovo-3, of a 29.7% interest in that entity, and the reimbursement of the US$ 20 million resp, US$ 50 million pre-development expenses incurred by Mr Sax." CX-84.

The fetter closed with a paragraph inviting open bona fide negotiations, and mentioning the intention to bring arbitration proceedings under the terms of the Founders' Agreement and the Charter, both dated 19 May 1996 (CX-S4).

On 24 January 2008, Claimant filed the Request for Arbitration. initiating the present arbitral proceedings.
On 21 April 2008, about three months after the present proceedings were initiated, Respondents published a Tender Notice for a USD 1,5 billion tender for a 30-year concession to rebuild, expand and operate Pulkovo Airport, which included the construction of the Alternative International Passenger Terminal. CM-49, para. 76, CX-81, 95, 100, 101.
Around the same time, IAT Pulkovo, which was meant to be the investment vehicle under the Investment Contract, was liquidated. In Claimant's view

"Respondents maliciously liquidated the corporate vehicle for Claimants Investment in order to: (a) assert a defense, (b) deprive Claimant of a corporate vehicle, in an attempt to prevent reinstatement, and (c) deny claimant Justice both within the Russian judicial system and within this Arbitral Proceeding." (CM-49, para, 102).

According to Claimant, the liquidation was done in an extraordinary summary procedure, without a judicial authorization as per Article 61, of the Russian Civil Code, adopting a procedure exclusively applicable to abandoned companies (CM-3 paras 79-109; CM-49, paras. 87-97), without proper notice to the public, and therefore without providing an opportunity to the public to assert claims (with reference to the 2008 Gazette of state Registration, ex-160). Moreover, Claimant also refers to Section 17.1 and 18.1 of the 1995 Charter which, for a termination or liquidation, requires a unanimous vote at a Stockholders' Meeting, and a ruling to terminate the Company by a competent court. CM-49, para. 109.
The liquidation, in Claimant's view, therefore constitutes a violation of customary international law as well as a violation of Russian and St, Petersburg Investor Protection Laws (CM-49, paras. 111 - 130), entitling Claimant to damages (CM-49, paras. 131-159).15
On 29 September 2008, Claimant filed a Request for Injunctive Relief with the St. Petersburg Arbitrazh Court, seeking injunctive relief to enjoin Respondents from continuing with the Tender For the reconstruct ion of Pulkovo Airport, or any actions designed tp advance the Tender, until Claimant's contractual right to participate in the development of the New International Passenger Terminal is adjudicated through the arbitral proceedings (CX-91).
On 3 October 2008, the St. Petersburg Arbitrazh Court denied Claimant's request for injunctive relief for procedural reasons, explaining that an application for injunctive relief must be filed together with the claim, or during the proceedings. However, as at that moment, as the Court stated, no arbitral proceedings were in place, Claimant's application was dismissed.
On 31 October 2008, Claimant appealed the decision (CX-78).
On 10 December 2000, the Appellate Court issued an interim order (CX-88).
On 10 February 2009, the Appellate Court denied Claimant's request for injunctive relief (CX-93).

C The Arbitration Clause and Choice of Law Agreements

Section 12.1 of the Founders' Agreement refers to the disputes resolution mechanism of the Charter. It reads as follows:


Section 12. 1.: Dispute Resolution Generally all Disputes and conflicts that may arise out of or In connection with this Agreement and the Charter shall be amicably settled by the Founders. In the event that any dispute, controversy or claim arising out of or relating to this Agreement or the Charter, or the breach, termination or invalidity thereof cannot be settled amicably, they shall be settled by arbitration in accordance with the provisions set forth in the Charter.

The Charter, m Chapter 20, sets forth the method and procedures for such arbitration as follows:


20.1 Generally, all disputes and conflicts that may arise out of or in connection with this Charter and the Founders' Agreement shall be amicably settled by the Parties.

20.2 In the event, that any dispute, controversy or claim arising out of or relating to this Charter or the Founders' Agreement, or the breach, termination or invalidity thereof cannot be settled amicably, they shall be settled by arbitration. The Award of the Arbitrators shall be final and binding upon the Parties.

20.3 The arbitration shaft be in accordance with the UNCITRAL Arbitration Rules as in effect on the data of the arbitration, except that in the event of any conflict between those Rules and arbitration provisions of this Charter, the provisions of this Charter shall govern. The Russian material law of shall govern in the trial and award making process.

20.4 The Stockholm Chamber of Commerce shall be the appointing authority, except for the specific provisions in points 19.6(i) and (ii).

20.5 The number of Arbitrators shall be three.

20.6 Each party shall appoint one Arbitrator. If within thirty days after receipt of the Claimant's notification of the appointment of an arbitrator the Respondent has not, by telegram, telex, telefax or other means of communication in writing, notified the Claimant of the name or the Arbitrator ho appoints, the second Arbitrator shall be appointed in accordance with the following procedures:

(i) If the Respondent is a natural or legal person of the Russian Federation, the second Arbitrator shall be appointed by the Chamber of Commerce and industry of the Russian Federation:

(ii) If the Respondent is a legal or natural person of any other country, the second Arbitrator shall be appointed by the American Arbitration Association; and

(iii) If within thirty days after receipt of the request from the Claimant, the Chamber of Commerce and Industry of the Russian Federation or the American Arbitration Association, as the case may be, has not, by telegram, telex, telefax or other means of communication In writing, notified the Claimant of the name of the second Arbitrator, the second Arbitrator shall be appointed by the Stockholm Chamber of Commerce.

20.7 The two Arbitrators thus appointed shall choose the third Arbitrator who will act as the Presiding Arbitrator of the Tribunal, If within thirty days after the appointment of the second Arbitrator, the two Arbitrators have nor agreed upon the choice of the Presiding Arbitrator, then at the request of either Party the Presiding Arbitrator shall be appointed by the Stockholm chamber of Commerce in accordance with the following procedure:

(i) The Stockholm Chamber of Commerce shall submit to both Parties an identical list consisting of the names of all of the persons listed on the then existing joint panel of presiding arbitrators established by the Chamber of Commerce and Industry of the Russian Federation and the American Arbitration Association.

(ii) Within fifteen days after receipt of the list, each Party may return the list to the Stockholm Chamber of Commerce utter having deleted the names to which he objects and having numbered any remaining names □n the list in the order of his preference;

(iii) After the expiration of the above period of time, the Stockholm Chamber of Commerce shall appoint the Presiding Arbitrator from among the names not deleted on the lists returned to it and In accordance with the order of preference indicated by the Parties; and

(iv) Should no joint panel then be available, or if for any other reason the appointment cannot be made according to this procedure, the Stockholm Chamber of Commerce shall appoint as Presiding Arbitrator a person not on the joint panel who shall be of a nationality other than that of Russia or the USA or France.

20.8 The arbitration, Including the making of the Award, shall take place in Stockholm, Sweden.

20.9 The Founders agree that English shall be the language used for the arbitration proceedings.

20.10 The Company shall bear all expense of an arbitration brought m actor dance with this Chapter 19, unless there shall he a determination by the panel that, in connection with tile matter that is subject to arbitration, a party has acted in had faith or committed gross negligence or willful misconduct. The arbitration panel shall make such a determination upon the request of the Company or any party to the arbitration.

The last provision in the above dispute resolution section. Chapter 20.10, deals with the allocation of costs for disputes arising under Chapter 19. Chapter 19 provides for an indemnification as follows :


19.1 The Company shall indemnify any Director and officer (including the Chairman, Vice-Chairman and Co-Presidents) against all suits, claims and actions, brought against such Stockholder, Director or officer, that may arise out of or in connection with the activities of the above Company, except for knowingly committed violations of law by such Stockholder, Director or officer.

19.2 The State Enterprise shall Indemnify the Company against any liability or damages which may arise from earlier environmental conditions The Company shall comply with published, readily accessible environmental regulations and shall adopt operating methods which comply with environmental and safely standards.

Regarding the applicable law, Chapter 21.1 of the Charter provides as follows:

This Charter shall be governed by appropriate Russian law, treaties and international law."

The Founders' Agreement does not contain a choice of law clause.
Claimant argues that, due to the connexity, the choice of low provision of Chapter 21.1, of the Charter should also be deemed applicable for the Founders' Agreement.

D The Parties Requests, Prayers for Relief

I Claimant’s Requests

Claimant, in his Request for Arbitration dated 24 January 2008 (CM-1), stated his claim as fallows:

"Claimant has been damaged in an amount to be proved at the Hearing of this matter but believed to be in excess of USD 5O million. In addition, In the event that Claimant's 29.7% interest in EAT "Pulkovo" is not reinstated in the entity which will develop "Pukovo"-3, Claimant is entitled to recover, and seeks an award of, the anticipated value, upon completion of "Pulkovo"-3, of a 29.7% Interest in that entity. Finally, Claimant respectfully requests that the Arbitrators award to him his attorneys' fees, costs and expenses..

Claimant in his Statement of Dispute and Claims filed on 22 June 2009, CM 2, para. 162, enlarged his claim to reach a monetary value of US$ 212’500'000, plus a claim for reinstatement as the project developer for the Alternative/New International Passenger Terminal at Pulkovo Airport.
In CM-49, filed by Claimant on 35 October 2010, the prayers for relief were further restated and expanded as follows:

"Claimant, as successor-in-interest to Strategic Partners and PSP, demands payment, by Respondents, jointly and severally, of US$ 212,500,000, as follows:

(a) The Pre-Development Advance Claim :

The US$ 19,772,277 Pre-Development Advance, which, as of April 30, 2009, together with interest at LIBOR +2%, aggregates US$ 36,715,527, which will, on the anticipated date of the arbitral award, towards the end of 2010 (the "Anticipated Date of the Arbitral Award"), be no less than US$ 37,500,000.

(b) The 29.7% Interest Claim:

The anticipated value, upon completion, of a 29.7% interest in the Alternative International Passenger Terminal, which will, on the Anticipated Date of the Arbitral Award, in Claimant's opinion, based on the 6.5% capitalized value of the second year’s cash flow from operations (before debt service) of the Alternative International Passenger Terminal (to be determined with specificity during the Arbitral Proceeding), be no less than US$ 159,000,000.

(c) The Development Fee Claim:

The 4.5% Development Fee due Claimant, which, according to Respondents' estimate of the 2006 development cost for the Alternative International Passenger Terminal, is US$ 21,832,681, which will, on the Anticipated Dale of the Arbitral Award, in Claimant's opinion, based on the 2010 estimated aggregate development cost of the Alternative International Passenger Terminal (to be determined with specificity during the Arbitral proceeding), be no less than US$ 25,000,000.

(d) Expenses (including Legal Fees) of the Arbitral Proceeding.

Expenses (Including legal fees) of the Arbitral Proceeding should be awarded/allocated amongst Claimant and Respondents, 29.7% and 70.3%, respectively, according to their Interests in IAT Pulkovo, as more particularly discussed below.

(e) Non-Waiver of Claim for Reinstatement: Claim for Specific Performance

i. Claimant, by monetizing the 29.7% Interest Claim as one for nut less than USS 150,000,000, does not waive his claim, as set forth in the Request for Arbitration, for reinstatement (the "Claim far Reinstatement") of his 29.7% Interest (on a fully diluted basis), as project developer, in the entity which will develop either the New International Passenger Terminal or that portion of the alternative terminal (the "AT") proposed in the Public Private Partnership ("PPP"> entered into by some or all of Respondents with Northern Capital Gateway Consortium designed to service international flights, as defined In Section 8.5 of the Founders Agreement ('International Flights"), However, Claimant conditions his Claim for Reinstatement on the Arbitration Tribunal's imposition on Respondents of conditions precedent and subsequent, acceptable to Claimant, to avoid an Illusory award of reinstatement.

ii. Claimant is entitled to an award of reinstatement requiring Respondents to restructure the PPP to grant Claimant the benefit of the terms of the agreements between Claimant and Respondents, as follows:

a. partition the physical facilities in the AT used to service International Flights from the physical facilities in the AT used to service all other flights;

b. segregate all passengers arriving and/or departing on International Flights from all other arriving and/or departing passengers;

c. segregate all accounting mechanisms for the AT related to that part of the at used to service International Flights, including expenses for development and construction and revenues and expenses for operation of international Flights;

d retain Claimant as the developer of that portion of the AT used to service International Flights; and

e. restructure the PPP for that portion of the AT used to service International Flights to;

1) eliminate the revenue charge of Respondents,

2) grant Claimant a 29.7% interest in that portion of the AT used to service International Flights,

3) extend the lease for the AT to two terms of 49 years each, and impose controls to protect Claimant's rights as a minority shareholder.’

In his Memorial CM-66, para, 120, Claimant increased the value of his monetary claim (total of principal amount claimed) to an amount between USS 350'485'672 and USS 459'653'668, plus interest and legal expenses, arbitration costs, literally (in CM 66, para. 120), Claimant claims:

"the pre-development advance claim which is calculated to range between US$ 37'185'672 and US$ I46'353'668, plus the development fee of US$ 18,800,000, plus the value of Claimant's 29.7% interest in IAT Pulkovo which has been calculated at US$ 294’500'000, plus interest to he calculated, plus all legal expenses and other expenses related to this Arbitration "

On 22 April 2011, in CM-68, para. 2, Claimant further amended his claims as follows:

Total claim US$ 459'700'000):

• a) Pre-development Advance Claim, with interest at the contractual rate of 15.5% US$ 146'400 000 as of 31 December 2011

• b) The 29.7%, Interest Claim upon completion of the Alternative International Passenger Terminal; US$ 294'500'000

• c) The 4.5% Development Fee Claim (based on the cost of the Alternative International Passenger Terminal; US$ 18'800'000

• d) Expenses (including legal fees) of the Arbitral Tribunal, to be aworded/alloceted amongst Claimant and Respondents in trie ratio 29.7% and 70.3%, end

• e) Reinstatement of Claimant of his 29.7% interest as project developer, in the entity which will develop the NIPT or the Alternative international Passenger Term Inst, conditioned on the Tribunal's Imposition on Respondents of conditions precedent and subsequent, acceptable to Claimant, to avoid an Illusory award of reinstatement.

In Claimant's Post-Heart ng Brief filed on 20 January 2012, Claimant stated that he no longer seeks specific performance of PSP's right to be the developer of the alternative International passenger terminal (AIPT), but maintains the claim for his entitlement to be paid a developer fee, which claim had been transferred to Claimant on the basis of the Purchase Agreement and Bill of Sale.
In a further paragraph, claimant stated that he seeks specific performance only insofar as to grant him an equity position in the AIPT that Is financially equivalent to PSP's 29.7% interest in IAT Pulkovo; alternatively, he seeks the monetized value in damages of that interest.16
The Tribunal notes that CM-85 does not contain any further discussion on the development expenses and some further aspects which were extensively reviewed during the Hearings. The Tribunal, however, understood from the opening paragraphs of the PH-Brief that all earlier factual and legal arguments are to be considered incorporated by reference into the PH-Brief, and that the silence to discuss some further aspects cannot be taken as a waiver or an admission.

II The Tribunal's Classification of Claimant's Claims

The several claims, as had been submitted by Claimant in these proceedings, in particular in CM-68 and CM-85, may be classified as follows:

• The claim under (a) basically stands for the Pre-development Costs incurred by the Foreign Parties, essentially in the 1990s;

• the claims under (b), (c) and (e) are claims connected to the frustrated participation as investor and developer in the new project vehicle for constructing and developing the Alternative International Passenger Terminal, whereby the reinstatement claim is a claim which first was submitted as a claim for specific performance, and was then re-phrased as a claim alternatively for specific performance or for a the monetized value respectively a damage claim;

• claim (d) deals with the allocation of arbitration costs.

For the purpose of the further review and discussion In the present Award, the Tribunal distinguishes four categories of claims:

First, Claimant's monetary claim as a creditor for reimbursement of pre-development expenditures incurred (essentially in the 1990s), plus the related interest claim;

Second, Claimant's monetary claim for a 4.5% developer fee;

Third, Claimant's investor-claim for the (new) Alternative International Passenger Terminal, or the monetary value ascribed thereto;

Fourth, Claimant's claim for recovering arbitration costs.

The Tribunal observes that the first three categories of claims above are derived from, and are based, on the ground of the Parties investment relationships and the bundle of obligations resulting therefrom. The overall legal relationships consists of multifold aspects grounding in norms of civil law, contract law, matters governing joint ventures, corporate governance, and security laws. All of them are closely interlinked and can hardly be separated one from the other without detriment to the essence of the relationships among the Parties and the their primary interest, which was the cooperation for mutual benefits in their investment activity. In this respect the Tribunal looked into the dispute from the investment law perspective.

III Respondents’ Requests

Respondents 1 and 2, in their Statement of Defense filed on 20 September 2009, deny all of the claims In full; literally on page 5:

"The Respondents deny, in full, all claims made by the Claimant (para. 162 a-d of the Statement of Claims) and requests that the Tribunal shall reject those claims.

The City requests that the Tribunal shall reject those claims, inter alia for the following reasons:

(i) Claims have not been proven, since the documents presented in confirmation of such claims, cannot serve as acceptable evidence.

(ii) Claims are groundless and do not have clear subject, i.e. are objectless.

(iii) Claims are not based on provisions of applicable law and are in contradiction with such provisions.

(iv) The Claimant has failed to prove succession of rights to the shares of IAT Pulkovo and therefore no is not in the position to file claims under the Statement of Claims.

(v) Claims should be addressed to IAT Pulkovo rather than the City and the City is undue respondent to such claims.

(vi) The statute of limitations applicable to the claims under the Statement of Claims has already expired.

(vii) As of today the project on development of the Terminal has already terminated.

(viii) Claims do not meet criteria of reasonableness, justifiability and commensurability.

(ix) Expenses of the Claimant have not been confirmed, and the calculations of the relief sought are wrong.

Above reasons and many other reasons for rejecting the claims of the Claimant are set out in more detail in this Statement of Defense."

In their Rejoinder, as well as in subsequent submissions and the PH-Brief filed on 20 January 2012 (1-RM-37/2-RM-43), Respondents 1 and 2 reiterated their requests.
Respondents 3, 4 and 5 did not present substantiated submissions or denials m respect of Claimant's substantive claims, it being however noted that there are a few letters/emails on file, essentially in regard to the nomination of Respondents' Arbitrator. The Tribunal has reasons to believe that none of the Respondents agrees with the claim; Respondents' silence - indeed in conformity with well established practice in international arbitration - cannot be taken as an admission of the facts and legal arguments presented by Claimant; all claims, therefore, must be considered disputed in their entirety by all of the Respondents.
Respondents 3, 4 and 5 wore, however, throughout the process kept informed on every step of the proceedings, several Orders of this Tribunal were delivered to them by international courier service; moreover, the Tribunal's numerous emails were properly received. Prior to the Hearings, the Tribunal particularly invited Respondents 3 to 5 to take part in the Hearings, be it only by delegating a '’silent listener" for observing the regularity of the process.

E Summarized History of the Arbitral Proceedings

On 14 January 2008, Paul A. Curran of Kaye Scholar LLP, on behalf of Claimant Mr Carl A Sax, addressed a NotIce of Arbitration to Respondents.
On 24 January 2008, Claimant’s Request for Arbitration was filed (CM-1).
On 5 August 2008, the Stockholm Chamber of Commerce appointed Or Marc Blessing to serve as the Chairman.
On 28 August 2008, the Tribunal issued its 1st Order regarding the constitution of the Arbitral Tribunal, legal representation, submissions on file and organizing numerous procedural aspects for the upcoming proceedings. Furthermore, a deposit in the amount of EUR 400'000,-- was requested, payable by each side in the sum of EUR 200'000.--.
On 3 October 2008, the Tribunal Issued its 2nd Order dealing with Claimant's application for a suspension of the arbitral proceedings. In view of that application, the Tribunal lowered the requested deposit to FUR 100'000.--, payable by Claimant, and suspended any payment from Respondents, The Order was delivered to all five Respondents by special courier service, and delivery documents are on file.
On 16 October 2008, Director General Murov of Respondent 5 sent a letter to the Tribunal, correcting the designation of the 5th Respondent.
On 13 November 2008, the Tribunal issued its 3rd Order concerning matters of suspension and reiterating the request for funding by Claimant.
On 15 December 2008, the Tribunal Issued its 5th Order, dealing with Claimant’s request of further time-extension for paying the deposit. It indicated that the Arbitrators Intend to charge for their services on a time-spent basis, at a rate of EUR 500 per hour.
On 30 January 2009, Mr Wallace on behalf of Claimant informed the Tribunal that Claimant Mr Sax wishes to voluntarily withdraw the Request for Arbitration on a without prejudice basis.
This request gave rise to several Submissions by the Respondents dated 5, 20 and 26 February 2009, and in a Submission of 11 March 2009 (RM-7) filed on behalf of Respondents 1 and 2 the Tribunal was requested not to terminate the proceedings but instead to rule on. the claims as presented in the Request for Arbitration, and to reject those claims, making reference to Section 28 of the Swedish Arbitration Act and Article 34 of the UNCITRAL Arbitration Rules.
In a further Submission dated 13 March 2009. Respondent 5 also requested that the Arbitration should proceed. At the same time, Respondent 5 informed the Tribunal that Respondent 3 had subsequently been reorganized and had ceased to exist already in 2006, with Respondents 4 and 5 being the legal successors or Respondent 3.
On 19 March 2009, the Tribunal issued its 6th Order, noting the several submissions, and organizing a telephone conference to take place on 2 April 2009.
On 2 April 2009, a telephone conference took place, with the participation of Mr Carl A, Sax, counsel to Respondents 1 end 2 and a representative of Respondent 5. Respondents 3 and 4 did not participate, nor did Professor Valery A. Musin dial into the telephone conference. It was discussed that Mr Sax Intended to withdraw his claims, however on a without prejudice basis; such withdrawal, however, was rejected by Respondents' counsel, requesting the Tribunal to render a declaratory award stating that Claimant's claims are invalid, Mr Sax replied that he will be unable to fund the costs of the proceedings. After further discussion, it was decided that the Tribunal will have to ask Respondents to fund the deposit, and the Arbitrators' remuneration on the basis of the hourly rate was mentioned and agreed by those participating in the telephone conference.
On 6 April 2009, Che Tribunal issued ils 7th Order, providing a detailed account of the telephone conference of 2 April 2009. Inter alia, Claimant was specifically asked to properly document his locus standi under the relevant contracts or as a legal successor-In-interest to the initial parties. The Order also scheduled the next steps in the proceedings. A deposit in the amount of EUR 250'000 was requested, and the Arbitrators' rate was confirmed one again.
On 26 June 2009, Claimant filed a second challenge against Professor Valery A. Musin.
On 20 September, 2009. Respondents 1 and 2 filed the detailed Statement of Defense (1-RM-2, 2-RM-8).
On 28 September 2009, the Tribunal Issued its &th Order, inter alia dealing with the impart of the challenge against Professor Musin, and granting a time-limit ta Claimant for filing his Detailed Reply by 4 December 2009.
On 1 December 2009, Claimant filed a letter to the Tribunal indicating the appointment of the new legal counsel taking over his representation and asking for- an extension of the time-limit for filing the detailed reply until 4 March 2010. On the same date, Claimant filed a further challenge against Professor Musin addressed to the Stockholm Chamber of Commerce.
On 3 December 2009, the Tribunal Issued its 9th Order noting the appointment of new counsel, requesting properly signed Powers-of-Attorney, directing that the arbitral proceedings should not be stayed during the pendency of the challenge against Professor Musin, and dealing with the request for extension. Moreover, the time-table of the proceedings so far and a detailed time-table for the further proceedings in 2010 was set out in the Order, as well as a request for Claimant to pay his share towards securing arbitration costs by effectuating a payment of EUR 250'000 to the Chairmen's special account.
On 14 December 2009, Dean Peroff of Amsterdam & Peroff submitted a new Power of Attorney, executed by Mr Carl A Sax on 9 December 2009, valid for one year
On 4 January 2010, Claimant filed a Request for Interim Measures.
On 5 January 2010, the Tribunal issued its 10th Order.
On 12 January 2010, the Tribunal issued its 11th Order.
On 25 January 2010, Claimant filed further comments regarding interim relief, together with additional requests.
On 27 January 2010, the Tribunal issued its 12th Order.
On 26 February 2010, the Arbitration Institute of the Stockholm Chamber of Commerce decided to sustain Claimant’s challenge of Professor Musin
On 2 March 2010, the Tribunal issued its 13th Order regarding the way forward.
Subsequently, Respondents named Professor Alexei A. Kostin, Vice-President of the International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry as Arbitrator. However, Claimant Mr Sax objected to such nomination causing Professor Kostin to voluntarily resign from office on 16 April 2010. Subsequently, Respondents 1 and 2 nominated Professor Andrey Bushev to serve as Arbitrator. Professor Bushev accepted his nomination.
On 30 April 2010, Claimant filed his Second Request for Interim Relief.
On 17 May 2010, the Tribunal issued its 14th Order, taking note of the appointment of Professor Bushev by Respondents 1, 2 and 5, and requiring a further confirmation on behalf of Respondents 3 and 4. Furthermore, Respondents were given a time-limit to comment on Claimant's Second Request for Interim RelieF until 31 May 2010 and, under the same date, to file the detailed Rejoinder. Finally, the Tribunal proposed either an organizational meeting in Moscow on 8 June 2010 (at the occasion of an international arbitration conference in Moscow, which was attended by the two non Russian Arbitrators), or the holding of a telephone conference on one of several proposed dates in June 2010.
On 28 May 2010, the Tribunal issued its 15th Order.
On 17 June 2010, the Tribunal issued its 16th Order regarding further matters of the telephone conference and regarding the organization of a Hearing, upon request of Claimant, for dealing with nis motions for interim relief.
On 26 July 2010, Claimant's counsel notified the Tribunal of a further challenge, addressed to the Arbitration Institute of the Stockholm Chamber of Commerce, concerning Professor Andrey Bushev.
On 5 August 2010, the Tribunal Issued its 17th Order, once again containing a detailed procedural time-tabic.
On 19 August 2010, Respondents commented on the challenge, follow-up by Further submissions of the Claimant on 29/30 August 2010.
On 16 September 2010, the Stockholm Chamber of Commerce issued its Decision rejecting Claimant's challenge of Professor Bushev.
On 17 September 2010, the Tribunal issued its 18th Order dealing with the proper constitution of the Tribunal, the mode of communications and notices emanating from the Tribunal and the further time-table and practical matters in view cf a two-day Hearing to be held tor dealing with Claimant’s requests for interim measures as well as for dealing with several documentary requests.
On 22 September 2010, Claimant filed a consolidated Request for Interim Relief.
On 27 September 2010, Claimant filed a motion for an Order For Sanctions, absent proper appearances by Respondents.
On 29 September 2010, the Tribunal Issued its 19th Order dealing with matters of valid representation and setting further time-limits.
On 19 October 2010, the Chairman invited Claimant's counsel to comply with the Tribunal's suggestions; contained in the 1st Order of 28 August 2008, regarding the consecutive numbering of Claimant's Memorials/ Submissions/letters (to be marked as "CM-_), and the consecutive numbering of Claimant's Exhibits with "CX-_" and Witness Statemerits/Expert Reports, to be numbered "CWS-_".
On 5 November 2010, the Tribunal issued its 20th Order, addressing numerous submissions filed by the Parties in October 2010. It dealt with the proper standing of Respondents and their representation by counsel. Furthermore, the Tribunal rejected Claimant's request submitted by CM-48 (para. 28), wherein Claimant urged the Tribunal that it should deem "all of Claimant's allegations against Respondents 3, 4 and 5" as having been admitted, and precluding them from presenting any further evidence before this Tribunal. The Tribunal stated that such a deemed admission (I) disregards the deeply-rooted practice in international arbitration, (ii) is contrary to the Swedish Arbitration Act and some 60 or more arbitration acts following the UNCITRAL Model Law, and (iii) not reflected in any of the arbitration rules of the major arbitral institutions, nor (iv) compatible with the UNCITRAL Arbitration Rules governing the present proceedings.
Regarding the nomination of Professor Bushev, the Tribunal noted that he had been validly nominated by Respondents 1, 2, 4 and 5, concluding that, since Respondent 3 no longer appears to be a Party, any doubts as to the proper composition of the Tribunal appear to be removed. The Order further addressed the mode of communications from the Tribunal to the Parties and addressed numerous matters In preparation for the Hearing on interim measures, documentary matters and procedure, fixed to take place in Zurich on 16 and 17 December 2010.
On 19 November 2010, the Chairman issued an e-mail requesting clarification regarding Claimant's requests and prayers for relief. Moreover, in respect of the Hearing on interim measures focusing on Claimant's reinstatement claim, the Chairman listed 23 discrete issues which, in his view, should be addressed at the Hearings In connection with Claimant's requests for interim relief.
On 24 November 2010, the Tribunal issued its 21st Order referring to Respondents' Submission of 8 November 2010, Claimant's Submission of 15 November 2010, further Submissions by Respondents dated 15 November 2010 and updated Schedules submitted On 18 November 2010. The Order invited counsel to take part in a further telephone conference and addressed several procedural matters. As an Annex to the Order, the Tribunal included the Chairman's e-mail of 19 November 2010.
On 29 November 2010, an organizational telephone conference took place.
On the same date, 29 November 2010, the Tribunal Issued its 22nd Order which contained a detailed shortlist of topics for discussion, examinations and pleadings at the occasion of the Hearing on interim relief scheduled to take place on 16/17 December 2010.
The list contained the following 30 issues;

"Locus standi, Jurisdiction, Valid Representation

1 Claimant's focus standi as a shareholder of IAT Pulkovo (validity of CX-66 and CX-59) (considering Respondents comments regarding the non-issuance of the shares).

2 Claimant's focus standi to make claims as an Investor under the Investment Contract (as opposed to his locus standi ss an assignee of Claims for certain payments and for damages) - this question has to do with the issue whether under the notion of intuitu personae - Strategic Partners as an investor could validly transfer the investor's position tv Mr Sax; this latter question arises because, in the framework of interim measures, Mr Sax requests his reinstatement as an investor, and not solely as a creditor for monetary claims.

3 Liability in principle of the Respondents: are the Respondents the correct parties to this arbitration (Respondents allege that Claimant should have directed his claim against IAT Pulkovo, and that the liability of other shareholders was specifically excluded)

4 Are the Respondents property represented in this arbitration?

5 Are Respondents lawyers properly mandated?

Substantive Issues

6 Do the Protocol, the Founders Agreement and the Charter Impose binding Obligations on the Parties?

7 Did Claimant respectively PSP perform correctly, under a preliminary and prima facie reasonableness test?

8 What was the significance of the time-window for coming up with the financing?

9 What is the significance of the continued efforts of the parties beyond the time-window?

10 Did the project "fail", as Respondents argue, due to shortcoming of Claimant respectively Strategic Partners/PSP?

11 Did Respondents breach their obligations?

12 Were PSP and /or the Claimant over granted exclusivity?

13 Would exclusivity violate Russian antitrust laws? In 1995/96? In 2007? Under Article 7 of the 199.1 -Law? Article 15 of the 2006 Law?

14 Was the project "up end alive" oven during the years. oF the late 1990s to 2007, or was it conclusively/tacitly (although not through formal notice) abandoned? Was - nt some stage - the momentum lost for realizing the initial project?

15 Hence: Did the corporate and contractual relationship come to an end at some stage, tacitly, by conclusive behavior or otherwise?


16 Impact of any statute of limitations on (i) the position as investor, and (ii) the position as a creditor for monetary claims for expenditures and damages? Are contractual or corporate actions time-barred?

17 Why did Claimant or hrs predecessors not raise the monetary claims (e q for expenditures incurred m 1995 onwards) earlier, for Instance in 1999, or at least in subsequent years?

The Alternative Terminal

18 Why was PSP not invited to tender for the Alternative Terminal?

19 Could Claimant have satisfied the pre-qualification requirements for the tender for the AT?

20 Comparing the initial project with the new project IAT): is the AT the kind of project which had been envisaged in 1995/1996, or is it on ''aliud" (a Latin term) i.e. so different that one must consider if as being a new project?

21 What is the status of the AT development?

22 Can it still he stopped and put on fee?

23 What would be the consequences and impact, if e.g. a stand-still of 12 to 18 months would be imposed?

24 What would be (i) the practicality and (ii) the proportionality of the requested measure, having regard to the actual situation and the merits of the case?

25 Would the requested measure - reinstating Claimant as the investor - be realistically possible?

26 How could Claimant satisfy the normal pre-qualifying means-test?

27 Does the project objectively require that the investor/developer must meet certain credentials, and are Claimant's actual credentials as a developer for such an airport project sufficient, based on what is mentioned in Mr Sax' witness statement?

28 Would Claimant’s position be reparable by a simple award of damages (provided the legal and factual prerequisite Would be satisfied)?

29 If the Tribunal decides to order Interim measures in the sense of Claimant's request: Is security required and offered, and if so In what amount and in what kind?

30 Finally: Documentary issues to he discussed: (a) Documents requested by Claimant, (b) Documents requested by Respondents 1 and 2."

On 8 December 2010, the Tribunal issued its 23rd Order dealing with several matters regarding the structuring of the Hearing and noting Claimant's CM-53 and CM-54, containing the preferred structuring for the Hearings.
On 14 December 2010, Claimant filed CM-55 regarding powers-of-attorney and legal succession, supported by a Legal Opinion of Professor Oksana M. Oleymik
On 15 December 2010, Claimant filed CM-56, 57 and 58.
On 16/17 December 2010, Hearings on matters of interim relief and documentary requests were held in the Chairman's offices in Zurich, attended by Mr Carl a. Sax personally, accompanied by his lawyers Andrew J. Durkovic and Vladimir V. Gladyshev, and further accompanied by the expert Peter Forbes of Alan Stratford & Associates Ltd. On behalf of Respondents 1 and 2, the Hearing was attended by Professor Oleg Skvortsov, Leonid Kropotov, Viktor Tulsanov, Pavel Borisenko, Josh Wong and Claes Rainer. The Hearings were verbatim transcribed by a reporter of Merrill Legal Solutions.
On 21 January,2011, Claimant filed the Post-Hearing Brief In support of his consolidated request for interim measures of protection (CM-60).
On the same date, Claimant filed a further Request for Production of Documents and Information (CM-61).
On 21 January 2011, Respondents 1 and 2 filed their Post-Hearing Brief regarding Interim Measures.
On 4 February 2011, Claimant filed a further Request for the Production of Documents and Information (CM-62).
On 8 February 2011, the Tribunal issued its Decision on Interim Relief, as per the Tribunal's 24th Order. The Tribunal's Decision reflected the claims so far submitted by the Parties, their detailed requests regarding interim relief, the legal framework and the numerous issues which the Tribunal had to consider in the context of a decision on urgent interim relief. Details regarding this section of the 24th Order are reflected in a later Chapter of this Award; see the next Chapter F below.

F Claimant's Requests Regarding Interim Relief for His ReInstatement, and the Tribunal's Preliminary Determination

I Claimant’s Requests ("Interim Requests")

Although the present arbitration had been Initiated by a letter of Claimant's then counsel Paul A. Curren dated 14 January 2008, followed by the Request for Arbitration dated 24 January 2008 (CM-1), Claimant only submitted a detailed request for interim measures in January 2010.
An immediate in-depth examination of Claimant's requests, however; had to be deferred due to Claimant’s challenges to Respondents' nominated Arbitrator, since the Tribunal considered it inappropriate to render decisions on interim relief unless and until its proper constitution has been established.
After the decision made by the Stockholm Chamber of Commerce under the date of 16 September 2010 regarding dismissal of the challenge against Professor Bushev, the Tribunal, In its 18th Order of 17 September 2010, suggested that Claimant may update and consolidate his Requests for Interim Relief, facilitating an in-depth review at the Hearing in Zurich, schedules to take place on 16/17 December 2010.
Claimant did so by fifing CM-45 titled "Claimant’s Consolidated Request for Interim Measures of Protection" dated 22 September 2010 and in its further Submission CM-50, filed on 15 October 2010 in response to comments submitted by Respondents 1 and 2.
Claimant's requests (’Interim Request") as per para. It of CM-50 read as follows:

"(a) An Injunction precluding Respondents from Facilitating the construction or financing of that portion of the AT used to service International Flights, including but not limited to:

i. participating in any act to facilitate initial disbursement of financing of the AT by the EBRD, the IFC and/or any other entity for that portion of the AT used to service international Flights;

ii. participating in any act to facilitate; the construction of that portion of the AT used to service International Flights.

(b) An order requiring Respondents in take such actions as are necessary to cause Northern Capital to refrain from:

i. participating in any act to facilitate initial disbursement of financing of the AT by the EBRD, the IFC and/or any other entity which would he used to finance the construction of, or which would encumber the facility of revenues of, that portion of the AT used to service International flights;

ii. participating in any act to facilitate the construction of that portion of the AT used to service International Flights.

(c) An order requiring Respondents to notify Northern Capital, Fraport AG and any and all financiers of the AT (referred to collectively here as the "Third Parties") of the pendency of this Arbitral Proceeding and of Claimant’s Claim for specific performance herein.

(d) Alternatively, if for some reason the Arbitration Tribunal does not consider it appropriate to grant the above requests, Claimant requests that the Arbitral Tribunal deem waived any and all objections to Claimant's claim fur specific performance in the Arbitral Proceeding, and strike paragraphs 378-384 of Respondents' Statement of Defense.

(e) The drawing of adverse inferences by the Arbitration Tribunal from Respondents' failure to inform Claimant and the Arbitration Tribunal of Respondents' ongoing efforts to aggravate the current dispute by proceeding speedily with the construction of the AT, which is dearly incompatible with the pendency or this Arbitral Proceeding."

With a view to providing some guidance to counsel of both sides as to the main areas which the Tribunal would wish to review together with the Parties at the Zurich-Heading, the Tribunal prepared a short-list of 3D issues to be discussed in the context of properly analyzing his requests for interim measures. This short-list was contained in the Tribunal's 22™ Order, issued on 29 November 2010. The short-list has been reflected above in Chapter E of this Award.
Claimant argued his case regarding his interim Requests in further written Submissions, and extensively argued hrs case orally at the occasion of the Hearing in Zurich held on 16/17 December 2010.

II Respondents' Denial Regarding Interim Relief

Respondents 1 and 2 denied all of the requests.
In respect of Respondents 3, 4 and 5, the Tribunal has not seen any comments in respect of the Interim Requests, The Tribunal takes them as being denied by all Respondents.

III The Tribunal's Procedural Decision as per the 24th Order of 8 February 2011

In its 24th Order, para. 130, the Tribunal ruled as follows:

"The Tribunal concludes, for the purpose of the present decision on the granting of interim relief referring to Claimant's reinstatement as an investor, that the Interim Requests - absent a showing of proper locus standi of the Claimant - must be denied.

This conclusion, however, only applies to Mr Sax' reinstatement claim, but does not as such apply to purely monetary interests/claims which might have been validly assigned to him by PSP on the basis of the assignment filed as CX-66. This, however, is not to be reviewed in the present Order."

The Tribunal - in reaching its aforementioned conclusion - considered the Following aspects - which are literally incorporated herein - regarding Claimant’s locus standi;


"Essentially, Claimant's substantive Claims submitted in the framework of the present Arbitration stand on two different legs, one being for some monetary campcnsation/damages, and the second being his claim for specific performance. in the sense that he should be reinstated as the investor for the Pulkovo Airport Project (the latter coupled with a number of conditions precedent and subsequent and acceptable to Claimant (sac hereto Claimant's requests in Chapter B above).
Claimant’s interim requests (as recited in Chapter C above) all refer to Claimant's reinstatement claim.
The distinction between the two legs of Claimant's claim is important and triggers significantly different legal issues. In fact: While a claim for some reimbursement of expenditures and a claim for damages may well have arisen (or may validly have been assigned to Claimant by Pulkovo (Strategic Partners) Ltd., (Cyprus) as the party to the Pounders' Agreement and the Charter, which matter however does not need to be discussed or decided herein, it is a fundamentally different matter whether Claimant, as an individual, could validly "stand into the shoes" of the initial party to the underlying contracts (respectively the Investment Contract, as the Claimant characterizes the contracts), and thereby claim to be given the position as a succeeding investor, succeeding to Strategic Partners.
The Tribunal will, therefore, have to analyse whether Pulkovo (Strategic Partners) Ltd. could, with valid effects vis-a-vis the other parties of the Founders' Agreement and the Charter, assign and transfer its position as an investor to Mr Carl A. Sax as an individual. It is noted that the sale and transfer was made pursuant to a tripartite Sales Agreement, CX-66, dated 17 December 2002, signed by Mr Carl A Sax on behalf of Pulkovo (Strategic Partners) Ltd., further signed by Mr Carl A Bax on behalf of Strategic Partners (Holdings) Ltd. and signed by Mr Carl A Sax in his personal name, relating to the sate of a 29.7% stock interest in IAT Pulkovo, and the assignment of a "$20+-miilian pre-development expanse receivable". The sale is further evidenced by a Bill of Bale, signed by the sellers/assignors Pulkovo (Strategic Partners) Ltd, and Strategic partners (Holdings) Ltd, signed under the same data by Mr Carl A Sax, signing for both (CX-59).
the Tribunal had specifically raised this rather obvious intuitu personae - issue in its communications to counsel for their preparations for the December 2010 - Hearings.

(Note: some 15 pages of text of the 24" Order are not reflected here, as they essentially drill with the basic requirements for obtaining interim relief according to the 1976 UNCITRAL rules, the 2010 UNCITRAL Roles and the Swedish Arbitration Act and the criteria of the avail shinty rations materia, considerations of practicability and proportionality, the general requirement for posting security and the requesting party's liability for damages, - The text hereinafter reflected deals with the most significant Issue of Claimant' locus standi.)

The issue of Claimant’s focus standi is the single most important and most critical element to he considered here and this most critical element, therefore, had been clearly flagged out to the Parties and choir counsel prior to the Hearings. In succinct form, the most relevant aspects are as follows:
In January 1992, Mr Sax, as per his allegations In CM-2, para 3 ss., received a "mandate letter" Inviting him to form a consortium of Western companies for the purpose of discussing the development of the Pulkovo Airport.
Based on such mandate, Claimant, in 1992/93, together with a number of Western companies, met with representatives of the City of St. Petersburg for the purpose of discussing the development of the Pulkovo Airport.
During those meetings with representatives oF the City of St. Petersburg (Vladimir V. Putin, at that time Vice-Mayor of the City, and Mayor Anatoly A. Sobchak), the City of St Petersburg requested Mr Sax to form a consortium of Western companies far the purpose of developing Pulkovo-3.
Thereupon, on 16 March 1994, the company named "Strategic Partners, Incorporated, USA", represented by Claimant Mr Sax, entered Into an Agreement (which in these proceedings was referred to as the "Protocol of Agreement") under which the Parties agreed to jointly redevelop the St. Petersburg Pulkovo International Airport, by developing Pulkovo-3 (CX-2) The Agreement was signed by Vladimir V Putin In his (then) capacity as the Vice-M&yor of the City of St Petersburg.
The Protocol of Agreement relates to the financing and construction of Pulkovo airport facilities and provided for the establishment of a joint stock company
While the Protocol of Agreement was entered Into in the name of a US company ("Strategic Partners, Incorporated; USA"), Claimant - according to his witness statement CWS-1 of 15 October 2010, para, 11 - formed a Cayman Island company bearing the same name, i.e. Strategic Partners (Holdings) Limited ("SPHL"), In which Claimant - according to his statement - at all material times held a minimum of 25% of the shares, and in which he served as Vice Chairman and Director.
Furthermore, according to his supplemental witness statement (CWS-5 pages 3/4), Claimant Mr Sax, In 1995.

"assembled one of the Fust consortia to offer airpor t terminal development, construction, reparation, financing and management services through a consortium of internationally recognized companies, known as Strategic Partners (Holdings) Limited ("Strategic Partners"). Strategic Partners' shareholders and/or participants included American International Group, American International Underwriters Overseas, Ltd. a/k/a, AIG; Deutsche Bank f/k/a, Deutsche Morgan Grenfell f/k/a, Morgan Grenfell & Co., Ltd.; STV Group, incorporated; AvFuel Incorporated, VINCI f/k/a, Group GTM; Aeroports de Paris; SKANSKA and others.''

In parallel, or shout the sane time, SPHL (Strategic Partners (Holdings) Limited), which Mr Sax described as a consortium, formed - for the purpose of implementing the Pulkovo project - a wholly-owned subsidiary, i.e Pulkovo (Strategic Partners) Limited, Cyprus (CM-2 para, 12)
Subsequently, PSP (represented by Mr Carl A. Sax as Executive Vice-President and General Counsel) together with four further parties, entered into the Founders' Agreement (CX-6) dated 19 May 1995, and JSC International Airport "Pulkovo" was formed (by the Parties referred to as "IAT Pulkovo").
Likewise, the Charter of JSC International Airport "Pulkovo", equally dated 19 May 1995, was signed by the five founders, among them PSP, again represented by Carl A. Sax as Executive Vice-President.
Claimant refers to the Founders’ Agreement and the Charter for creating IAT Pulkovo (as the corporate vehicle) as the "Investment Contract" (CM-49, para, 34).
The investor, therefore, as regards the project lined up in 1994/95 was the Cypriot subsidiary of Strategic Partners whose shareholders and/or participants included the companies as referred to by Mr Carl Sax in his witness statement (see above), all of them known as significant players
The significance of SPHL's then held position as a major player for airport developments was further emphasized by Claimant, by referring to an impressive list of SPHL's then (1996 to 1999) involvements in the development of numerous international airports and airport terminals, including projects in Russia for (i) Moscow’s Seremetjevo 3, and (ii) airports in Vietnam, (iii) Gibraltar, (iv) the Philippines, (v) Guatemala, (vi) Congo, (vii) Ecuador, (viii) Indonesia, (ix) Honduras, (x) Pakistan, (xi) Armenia, (xii) Jamaica and (xiii) Uruguay.
l he more precise involvements in these projects mentioned In CWS-1, however, have not been ascertained in the present proceedings17, and the Tribunal was not made aware of, for instance, currant projects where SPHL (or Claimant personally) plays a significant role as an airport developer. Claimant, at the December 2010 Hearings, simply mentioned that he, when reinstated as an investor, would without difficulty be able to put together a new and significant international consortium for realizing the Pulkovo project.
The above are some of the parameters which the Tribunal has to consider in respect of its reflections on Claimant's locus standi. The Tribunal's reflections are as follows.
It is within the nature of such an investment contract that the contract is concluded with each one of the parties having regard to the parties' individual standing, abilities, capabilities or resources. The contractual relationship, thus, is formed intuitu personae (for using this Latin term of art).
A natural consequence of this understanding of the contractual relationship is that the individual party as such is not exchangeable or interchangeable, unless all other parties would agree; more particularly, obligations assumed by one party cannot, without the agreement of all other parties, be "assigned'" to a new party.
While the above certainly holds true as a general conclusion, quite irrespective of any legal system applicable, this understanding - in the present case - is moreover clearly apparent from, and reflected in, the Charter (CX-5), Chapter 16, and in the Founders' Agreement, Article XI (CX-6).
Chapter 16 of the Charter and Article XI of the Founders' Agreement reflect the Intuitu personae notion under the title "Transfer of Shares". According to those provisions, it is dear that the right to transfer shares Is restricted in very explicit terms and provisions and, inter alia, requires an "acquisition proposal", with an offering procedure which is in detail laid down in Clause 16.4. "The provisions are very detailed and run over some 5 pages, all of which indicate the importance which the Parties attributed to the matter. Absent a compliance, it would seem clear that a valid transfer of the position as a shareholder and investor could net take place.
Thus, PSP - absent compliance with Chapter 16 of the Charter and Article XI of the Founders' Agreement - was precluded from transferring its shareholding to Claimant Mr Sax. An effective transfer was moreover not possible, because the shares in IAT Pulkovo were never formally issued, and thus could not be validly registered in the personal name of Mr Carl A Sax.
Claimant - in the framework of the present Arbitration - described himself as being the "successor-in-interest" of PSP, based on the assignment between PSP and Mr Sax of 17 December 2002. The relevant document was submitted as CX-66, as referred to above Respondents 1 and 2 dispute the validity of such An assignment as regards the position as a shareholder or investor, emphasizing that the shares of IAT Pulkovo had never been issued and, therefore, could net validly be transferred.
The above situation leads to a rather obvious conclusion in the sense that - absent a formal approval by all Parties of the Charter and the Founders' Agreement - PSP could not validly transfer its position as an Investor in IAt Pulkovo, and Claimant Mr Sax could not validly assume and take over the function from PSP as a party to the contractual relationship formed in 1994/1995. Such approval, however, did not occur.
Therefore, as regards the position as an investor/sharcholder, the Assignment as per CX-66 can not produce a valid effect recognizable under the applicable Russian Law. Only purely monetary interests or claims may be considered assignable without consent of the other investars/shareholders.
Under the intuitu personae notion, one may also say that it was

• one thing to deal with Strategic Partners in 1994 and thereafter with the - at that time - impressing business partners lined up and associated with Strategic Partners at that tune (as described by Mr Sax in bis witness statement, CWS-5, pages 3/4, specifically referred to above), and the numerous projects then worked on (also referred to above, projects numbered (i) to (xiii).

• and another thing to see and accept Mr Sax re instated as an investor, in his personal capacity, with no established record whether or not he had kept any personal activity in airport development since the later 1990s, and without the support he had indicated standing behind Strategic Partners in the 1990s, simply with the proposition that - as he affirmed during the Hearings (see the passages quoted above) still today he would easily be in a positron to put together a consortium which would match any required standard for a requisite qualification to realize the Alternative Terminal Project.

Hence, the Contract-party which had been accepted to become an Investors in the 1990s, i.e. Strategic Partner respectively PSP, on the one side, and Claimant as an individual entrepreneur on the other side, are different "pairs of shoes".
At the Hearing, Claimant, in his Impressive enthusiasm (greatly respected by the Tribunal), affirmed that in 2007 - had his continued right to be the investor for a new Airport Terminal been respected - he would, within weeks, have been able to put together a new and strong consortium (possibly better than Northern Capital Gateway); see the excerpted dialogue above.
Yet, such An affirmation, impressive as it is, can hardly be sufficient for the Russian Parties to rely on.
More significantly, claimant had made no tangible steps to take part in the 2007 tender, nor has he put together such a consortium which could have fulfilled the pre-tendering qualifications.
To summarize the Tribunal’s reflections: For two essential reasons, the Tribunal has significant difficulty to affirm Claimant's locus standi as en investor;

First, the shareholder's position of the investor PSP was clearly ad personam, and was transferable only upon a prior offering of shares to the other parties, and thereafter by complying with all further transfer restrictions; nothing of this was done; end it could not even be done, since the IAT Pulkovo shares had never been issued; consequently. Claimant (quite correctly) only describes himself as a "successor-in-interest", and not, legally, as o successor.

Second, under the circumstances, the Russian Parties, in 2007, could not reasonably be expected to accept Mr Carl A Sax as the individual Investor, not even on the basis of a promise - which had not even been made - to put together a strong consortium, 13 years after the discussions regarding the Protocol in 1994. During those years, the momentum got lost, and the "world'' changed, possibly in Russia even faster than elsewhere.

Between 1994/95 and 2007, the "world" has changed - this trifle statement raises a legal question not argued by the Parties, but nevertheless worth mentioning as an obiter dictum:
Claimant, in his testimony on 16 December 2010 at the hearing, mentioned that he (respectively Strategic Partners), In 1994/1995, were accepted without a tendering procedure, and he stated that - when planning for the Alternative Terminal in 2007 - the Russian Parties should simply have called him, and should have accepted him without submitting the project to a public tender, arguing implicitly that legally/contractually the Russian Parties were still bound by the initial agreement reached In 1995.
This raises ah interesting issue;

• During this period of time, relevant Russian law changed or may have changed. in particular, Russian anti-trust law changed, and possibly new procurement laws and requirements were enacted or became more closely observed or enforced than, for Instance, in 1994/1995.

• If this, as a legal hypothesis, is correct, and if in 2007 new public procurement rules and tendering requirements were applied, the question is whether, in the framework of a contractual relationship, a party has an implied or vested right that, during the term of the contractual relationship, changes in the legislative framework would not apply to such existing relationships.

• This issue is normally answered in the negative, i.e.. in the sense that a contractual party (such as PSP respectively Mr Sax) has no protected or vested right, absent very particular assurances or particular stabilization-of-law clauses (as controversial as they are), that the applicable laws remain unchanged during the contract period, or even during an unlimited period of time.

• Hence, it is not an exception, but rather a normal situation, that laws are changing. in some countries more often and more rapidly than in others, arid in specific areas of business more rapidly than in others.

• For instance, changed financial and economic situations have given rise to new urgent measures and regulations, and - absent very specific guarantees -parties have no choice but to adapt to changed legal parameters, possibly after a certain transitory period, and in exceptional circumstances, new regulations even purport to take a retroactive effect.18

This obiter dictum supports the Tribunal's conclusion that Claimant's claim in the sense that he was contractually and legally entitled to be the foreign investor In connection with trie 2007 Alternative Terminal, without subjecting himself to a tendering procedure - is unconvincing.
To sum up The Tribunal concludes, for the purpose or the present decision on the granting of interim relief referring to Claimant's reinstatement as an investor, that the Interim Requests - absent a showing of proper locus stand) of the Claimant - must be denied.
This conclusion, however, only applies to Mr Sax' reinstatement claim, but does not as such apply to purely monetary ihtenasts/daims which might have been validly assigned to him by PSP on the basis of the assignment filed as CX-66. Tills, however, is not to be reviewed in the present Order."


It is clear that the above decision only reflected the Tribunal's provisional view for the purpose of an interim procedural decision, and that therefore the locus standi of Claimant as regards his reinstatement claim remained open for further and better submissions by the Parties and reconsideration by the Tribunal, and in fact was further reviewed at the Stockholm Hearings.
Claimant, in his PH-Brief filed on 20 January 2012, recognized the Tribunal’s concern regarding the reinstatement claim, by amending his request to a purely monetary claim.

G The Further Procedure After the Tribunal's Ruling on Interim Relief of 8 February 2011 up to the Closing of the Proceedings - The Liability Phase

In a second part of the 24th Order, the Tribunal listed Claimant's extensive documentary requests, noting that they go far beyond the standards of the 1999 ISA Rules (and the 2010 IBA Rules) on the Taking of Evidence in International Commercial Arbitration. -- Hence, all requests were, for the time being, denied.
In further parts of the 24th Order, the Tribunal dealt with several further matters including the applicability of the Tribunal's determination to the remaining Respondents, the cost implications (to be decided in the Final Award), and the organization of the further proceedings.
In the fatter respect, the Tribunal suggested a bifurcation in the sense that, first, the issues on liability would be considered, in which context the Tribunal identified eight main issues - quite in the sense of a "road-map" - which should be addressed by counsel in up-coming written end oral proceedings, and in respect of which detailed liability Hearings need to be scheduled.
This "road-map" listed the following issues;


Issue 1: Did Strategic Partners/PSP fulfill its promised tasks correctly, by providing the financing as contemplated, (i) timely, or within a conceded stretch of the time-window? And (ii) in a manner which should have been accepted by Respondents and IAT Pulkovo?

a) If yes: what are the consequences?

b) If no: what are the consequences? Did the Project - as Respondents allege - fail due to shortcoming of Strategic Partners/PSP? Would this bar any and all of Claimant's claims?

Issue 2: Did the Protocol, the Founders' Agreement and the Charter at ail Impose binding obligations?
Issue 3: Was the Project not realized in the 1990s

a) due to shortcomings of Respondents?

b) Were they committed in a binding manner, and it so, did they breach their contractual obligations?

Issue 4: Was the Project still-born after 1997 or any time thereafter, or tacitly abandoned?

a) And was thereby the contractual relationship terminated?

b) If so; at what moment in time?

c) And what would be the effect of such a determination on the dies a quo regarding the running of any statute of limitations?

Issue 5: If the answers to the two Above questions is yes what are the consequences?

a) Does this trigger a liability in principle vis-a-vis Claimant? Of which Parties?

b) Is liability excluded due to Section 8.4 of the Founders' Agreement?19

c) If not' liability for disbursements only, or disbursements and loss of expected profits?

Issue 6: If no: consequences? Would Claimant still have a valid claim in principle for recovering costs? And what is the impact of Section 8.4 of the Founders' Agreement?
Issue 7: To the extent a monetary claim of Claimant appears justified in principle find would not be cut by Section 8.4:

a) Should Strategic Partners, or PSP, or Claimant have voiced claims earlier? And why was this not done?

b) Are any and all claims time-barred?

c) If not: against which Parties can claims be directed?

d) What is the scope of Claimant's claim? Recovery of pre-development expenditures? other cost or damage items? Lucrum cessans?

Issue 8 : Were Respondents committed to exclusively deal with Strategic Partners/PSP, and was there a commitment - e.g. still valid m 2007 - that the Alternative Terminal must be realized with them, and not with any third party?

a) Would exclusivity, as it was required by claimant, violate Russian antitrust laws/procurement lows? In 1994/95/96? In 2007?

b) Should Strategic Partners/PSP have been Specifically invited to take part in the tendering process?

c) Should Strategic Partners/PSP or Claimant saw sponte have participated in the tendering process?

d) Could Claimant thereby, or through other precautions, have mitigated his losses?

Further, the 24th Order indicated that, in the case liability would have to be affirmed by this Tribunal, the Tribunal would open the quantum phase in which

• Claimant would be given the possibility to (in detail) quantify his monetary claims, and

• would have to furnish evidence regarding the pre-development costs and other costs or damages for which he seeks a reimbursement;

• moreover, currency issues and matters of interest would have to be addressed (dies a quo and ad quern, applicable Interest rates, simple interest, compound interest and, if compounded, on what basis).

The Order, finally, addressed the further procedure up to a liability Hearing, and invited comments from counsel on the further procedure as proposed by the Tribunal.
In a joint Submission dated 4 March2011, counsel to both sides basically agreed to the Tribunal's proposals regarding the further proceedings, with a primary focus on liability issues to be cleared first, thereafter - if necessary -followed by a quantum phase.
On 18 March 2011, the Tribunal issued its 25th Order essentially dealing with Claimant's CM-63/64 in which the Claimant voiced concerns regarding the enforceability of this Tribunal's Final Award in case one of the Respondent Parties would raise an objection in the sense that it had not been properly notified of the present arbitral proceedings, or that it had not validly been represented.
On 28 March 2013, the Tribunal issued its 26th Order indicating the dates and venue and practical matters for the liability Hearings scheduled to take place on 18-21 October 2011 in Stockholm.
On 22 April 2011. Claimant filed its Memorials CM-65, CM-66 (hereinafter sometimes referred to as the "C- Liability Brief"), CM-S7 and CM-68. followed by CM-69 on 27 April 2011, including Mr Sax' Witness statement CWS-6 and four expert opinions. In CM-69, Claimant requested assistance from the Tribunal by issuing an Order that Respondent 1 provide the official address of Respondent 4.
On 2 July 2011, Respondents 1 and 2 filed their written Submission on Liability (" R-Liability Brief"), including Mr Karpov's witness statement and four expert opinions
On 21 July 2011, the Tribunal issued its 27th Order, providing proposals and directions for the Liability Hearing in Stockholm, and proposing a further telephone conference, after having received the joint proposals of the Parties regarding the schedule/structuring of the Liability Hearings.
The Order also addressed the financial status of the advances and interim payments, and included an estimated budget for the further work likely to be necessary for the further steps in this arbitration, followed by a request for further deposits payable by each side.
On 5 August 2011, Claimant filed CM-70, requesting leave to address a comment m Andrew Fletcher's opinion according which, under English law, the Purchase Agreement (CX-66) does not transfer to Claimant any rights to profits from the Investment Project.
On 9 August 2011. Issued its 28th Order, noting the availabilities of the witnesses and the experts at the upcoming Liability Hearing, noting the likely prevention of Professor Sukhanov, yet requesting further particulars as to the reasons for his alleged unavailability prior to making a decision whether or not his expert opinion should be disregarded. The Tribunal also granted a 30 day time-limit for Claimant to address the conclusion in Andrew Fletcher's opinion. In the saint Order, the Tribunal denied Claimant's request contained in CM-69, and dealt with CM-71 which was filed on the same day.
On 16 August 2011, Claimant filed CM-72, applying for an extension of time until 16 September 2011 to address the opinion of Andrew Fletcher QC; furthermore, in CM-73, Claimant requested to disallow Professor E.A. Shukanov’s Opinion (RWS-5).
On 19 August 2011, the Tribunal issued its 29th Order, granting the time ox-tension requested by Claimant, and on the other hand Indicating that Professor Shukanov’s Opinion, filed by Respondents, would have to be disregarded, if he would not be available for oral examination at the October-Hearings, since the alleged importance and eminence of Professor Sukhanov cannot be accepted as a ''valid reason" for exceptionally accepting his expert opinion on the record.
On 25 August 2011, Claimant's counsel filed CM-74, requesting the production of Respondents’ counsel’s instruction letter to Andrew Fletcher Qc, as referred to in the latter's expert opinion RWS-4.
On 24 August 2011, Claimant filed CM-75, with a renewed motion that the Tribunal requests Respondents 1 and 2 "to confirm DLA Piper's continued authority to act on their behalf" - The Tribunal reverted to the request in its 31st Order, paras. 26 and 27.
On 26 August 2011, the Tribunal Issued its 30th Order.
On 30 August 2011. Claimant's counsel transmitted the email correspondence between counsel regarding the Hearing Schedule for the Stockholm Hearings in respect of matters on which they could not agree.
In reaction thereto, the Chairman circulated an email reflecting his own proposal for the structuring of the Hearing.
In the afternoon of the same day, the telephone conference took place, dealing with Respondents' application for extending the time-limit regarding the additional advance, and thereafter dealing with the Parties’ desiderata regarding the Hearings in Stockholm and further practical aspects. Essentially, both sides agreed to the Hearing Schedule as it had been proposed by the Chairman. Respondents' counsel Josh Wong inquired whether the Tribunal will once again submit a list of issues to be addressed during the Stockholm Hearings.
The essentials of the discussion are reflected in the Tribunal's 31st Order of 31 August 2011, transmitted to the Parties on 2 September 2011. The Order also dealt with Claimant's CM-74 and CM-75. At the same time, the Tribunal condensed its preparatory work by reflecting on, and putting together, a short-list of key-issues, including a series of more particular questions.
On 2 September 2011, the Tribunal - having condensed the numerous questions in a Questionnaire with 53 questions, grouped under 8 Key-Issues - communicated its 32 Order, accompanied by a caveat that the Questionnaire did not claim to be complete, and that more and other factual elements and legal issues might have to be addressed during the Hearings. The Questionnaire is reproduced herein below; it will also serve as the topical list of matters which this Tribunal - for the purpose of reaching its decisions had to consider.

Issue 1: Proper Performance by Claimant and the EBRD Offer

1 Regarding the LORD offer, is there a significant discrepancy between basic terms of the Founders' Agreement ("FA"), and the EBRD offer?

2 What about, for instance.

(i) the increased amount Of the loan.

(ii) the Interest terms.

(ii) the removal of majority for the Russian Parties of 63 4% to a majority of the Foreign Parties/EBRD, by the required transfers of 21.5%

(iv) pledging of the shares in favour of EBRD.

(v) transfer of management functions to Aeroports de Paris?

3 Hence: Have the Foreign Parties properly fulfilled their "primary obligation" by providing the EBRD offer as it was made’

4 Were the Russian Parties bound to accept whatever financing offer would be presented? Or were they free to reject it, or lot it lapse time-wise?

Issue 2: What if the EBRD-Offer, For Good Reasons, Had to be Considered Unacceptable for the Russian Parties?

5 Were the Russian Parties still bound to the FA, even though the Foreign Parties could not - according to the Russian Parties' arguments - present an acceptable financing commitment?

6 In this context: can the Russian Parties invoke the exceptio non (rite) adimpleti contractus? Is this defence, in Russian law, also available in the ambit of corporate law (as opposed to the "traditional" ambit of this Roman law maxim in contract law)?

7 If indeed the Russian Parties were well-founded not to take the EBRD-offer further: Could the Foreign Parties continue to claim to be part of the Investment Project, and derive benefits there under (for instance based on the 29.7% equity share and profit share), even though, possibly and eventually, the Russian Parties would have had to find financing through entirely different sources, without the Foreign Parties' or Mr Sax assistance, or ultimately through the City's or the State budget?

In other words: Was the FA still binding on them, or could they repudiate the Investment Contract altogether?

8 If the Investment Contract remained to be binding; to what extent did the FA contain further binding provisions?

9 If not; Did Respondents' have the right to repudiate the Investment Contract, or to tacitly terminate it, respectively to terminate it trough inactivity of the Parties?

* And did they do so?

10 At what moment in' time should Claimant have realized the disinterest of the Russian Parties, or a unilateral refusal to further support the project?

11 Claimant, after 1999, tried to keep the project on track, or to revitalize is, but no fresh momentum could be found; was the FA terminated already in the first half of 1999, as discussed fey Professor Belov?

12 What is the effect of Mr Karpov's letter of 16 April 2003 (CX-69)?

Issue 3: Claim for Reimbursement of Pre-Development Expenditures

13 SPH and/or Claimant want to very considerable expense for the planning of the NIPT, lined Up consultants, prepared numerous documents, for which Claimant now seeks reimbursement - and Mr Rowson stated in para 26 that he was advised that the expenditures "are reimbursable under various agreements prepared by the Parties.

What Is the documentary basis for this statement, in Claimant's view?

14 In 1995 and beyond: was it discussed among the shareholders that such expenditures would be incurred for and on behalf of IAT Pulkovo (or its shareholders), and not only on behalf of the Foreign Parties or Mr Sax personally?

15 And if this was discussed: Was there ever an agreement - at the time when entering into the Founders' Agreement ("FA"), or any time thereafter - that these costs are reimbursable to the Foreign Parties/Claimant, either through IAT Pulkovo or otherwise through the Other Founders?

16 How do we have to understand that the Foreign Parties agreed to FA 6.3, on the face of that provision waiving costs before entering into the FA, when on the other hand - as per Mr Rawson's report - already prior to December 1994 very significant costs exceeding US$; 3.3 million seem to have been incurred which, despite the terms of FA 6.3, are now claimed as part of Claimant’s pre-development advance claim?

17 Following up from Q 14 above: In the framework of negotiations leading the conclusion of the Fa, did the Foreign Parties and/or Claimant indicate the fact (and magnitude) of the expenditures already incurred and likely or expected to be incurred in the time to conic, particularly in connection with the securing of a financing commitment?

18 More particularly, after the conclusion of the FA, and during the further "life" under the FA and as shareholders in IAT Pulkovo:

Was the nature and magnitude of further spending during 1995 to 1998 ever discussed with the Russian Parties and the Board of IAT Pulkovo, and was =t approved?

19 Far instance, were all Parties to the FA and shareholders of IAT Pulkovo, and IAT Pulkovo itself as the corporate entity, made aware of the charging (or ultimately intended charging) by the Foreign Parties/Claimant) for the following costs and expenditures incurred by the Foreign Parties:

(i) the charging of several millions for consultants

(ii) the charging of advisory costs paid or to be paid to DMG, OPIC, Unipart capital and MIGA of US$ 1.5 million,

(iii) the charging of approx. US$ 2 million for salaries to employees of Sax (Holdings) Limited,

(iv) the charging of the salary for Mr Carl A Sax of over US$ 1 million,

(v) the charging for Claimant's and STVs office overheads,

(vi) the charging of US$ 1 million for design and engineering, and

(vii) the charging of over US$ 4 million for "transfer agreements", for transferring interests of individual shareholders to Strategic Partners.

20 If not: why was this not disclosed, discussed upfront, with the view towards seeking an agreement how to deal with such costs?

21 In the fr&rnework of the liability decision to be made by the Tribunal: how should the Tribunal decide liability and recoverability in principle for any one/each one of the items as per Q 19 (i) to (vii) now claimed in this arbitration?

22 When incurring those pre-development expenses; Could the Foreign Parties or Sax act on behalf of IAT Pulkovo, and bind IAT Pulkovo thereby, as Claimant asserts?

Did Mr Sax have a proper corporate authority to act for IAT Pulkovo, or a mandate ?

23 Or could Mr Sax only act on behalf of the Foreign Parties respectively himself, absent the required unanimous decision under FA Chapter 12,7, as this was argued by Respondents?

24 In this context. Was Mr Sax ever correctly appointed as Vice President of IAT Pulkovo, and registered as such, ss he claims, and as this had been foreseen in FA 13.3?

* If not: why not?

25 Mow did the Foreign Parties and/or Mr Sax commercially assess their continued spending under the perspectives of the - as it scams - relatively easy exit clause according to FA 8.4?

26 Is FA 8.4 applicable in our context, as Respondents' maintain, or inapplicable, as Claimant maintains?

27 IF there had been no agreement that these pre development costs should ultimately be borne by IAT Pulkovo or Respondents, on what basis could those costs rind their way into the EBRD financing offer, as port of the loan?

And on what basis could the Foreign Parties expect that this will be acceptable to the Russian Parties?

Has this been discussed, agreed?

Issue 4: Claim for a 4.5% Developer Fee

28 What Is the legal/contractual basis for this claim?

29 Mow was it negotiated/agreed? Do we have a signed document?

Issue 5: Termination of IAT Pulkovo

30 Was IAT Pulkovo properly administered even beyond 1998 and ultimately properly liquidated?

31 If not: Would an incorrect administration or liquidation of IAT Pulkovo give rise to a justified Claim or Claimant?

32 If so, for whet kind of claims?

33 Is there a violation of international law? Was there an act akin to expropriation?

Issue 6: Statute: of Limitation for Monetary Claims

34 How can we understand Claimant's rationale for not submitting the pre-development expense claim forthwith or rather promptly, as expenditures were being incurred, or in any event immediately when the EBRD offer lapsed in 1998, if there had been an agreement that they are reimbursable?

35 Would it be unreasonable to think that Claimant, a very well experienced lawyer, must have been aware of the statute of limitation, end a 3 year statute arguably must have been familiar to fern, since this is the statute of limitation according to many if not most US State lew legislations.

36 Regarding Claimants monetary claims: when did a violation of rights occur, falling under Article 200.1 Russian CC?

37 Respectively, when could or should Claimant have presented his claims for pre-development expenses, under Article 200.2 Russian CC?

38 Are some or all of Claimant's monetary claims for pre-development expenses time-barred?

39 If not: on what basis does Claimant have a valid claim in principle (subject to the analysis of the quantum in a final stage of this arbitration)?

40 And how to deal with interest (which may be more significant than the capital amount), interest rate, simple, compound (and compounding basis)?

Issue 7: Claim for Re-instatement as an Investor

41 Does Claimant have standing On the basis of CX-66, for claiming that he should have been selected as the developer for the AT in 2007?

42 What was transferred/assigned to Claimant under CX-66, having regard to (the probably universal, but 2'000 year old Roman notion of) "nemo plus juris transfer protest quam ipse habet"?

43 The issue might not really be answered by English law (governing CX-66), but by Russian law, since the transfer/assignment: would have to deploy certain effects for IAT Pulkovo. Views/comments?

44 On the same issue: what could be transferred as a stock Interest, having regard to the strict Transfer restrictions as per the Charter and the FA?

45 Re-thinking the Tribunal's earlier preliminary decision as per the 24th Order: Can Mr Sax stand "into the shoes" of the initial Party?

Or was the Tribunal's intuitu personae reflection correct, in the sense that the participation in the project as an investor and developer is not "inter-changeable'' or transferable from SPH/PSP to an individual (Mr Sax), even though at the time Mid-1990s Mr Sax might have been the driving force behind SPH/PSP?

46 Regarding Mr Sax' claim that, in 2007, he should have been elected as the developer/invcstor for the Alternative Terminal

• Is it of significance that - during the 1990s, SPH and Mr Sax were apparently significantly engaged in numerous airport developments, and were active around the globe (as can be seen from Mr Sax first witness statement, CWS-1, identifying numerous airport development projects in which strategic partners were involved, such as in Moscow/Seremetjevo, Vietnam, Gibraltar, Senegal, the Philippines, Guatemala., Congo, Ecuador, Indonesia, Honduras, Pakistan, Armenia, Jamaica and Uruguay - none of which however materialized, see Transcript of 16 December 2011, p, 93),

• whereas there seems to be no further record of Mr Sex involvement since 1998 to date (but for Mr Sax to correct If this is wrong).

47 Why did Mr Sax not participate in the tender process for the Alternative Terminal?

48 How could Mr Sax have fulfilled the (very heavy) pre-qualification criteria?

49 Was Mr Sax aware that procurement laws in Russia changed?

Was he entitled to expect that laws in Russia would rot be changed, and would remain stabilized on the basis as they were in 1995?

And would a claim for exclusivity, as requested by Claimant, he contrary to Russian antitrust law?

Issue 8: Cost Decision


The Tribunal may he minded to make a cost decision within its determination on liability, irrespective of whether or not the case will proceed to a final Quantum Stage.

For that purpose, the Tribunal is likely to request the Parties to file their cost submissions within about 2 weeks after the Stockholm Hearings, respectively within 2 weeks after the exchange of any post-hearing briefs (if any; for discussion).

The format and level of detail of the cost submissions must be discussed basically at the Hearing, as we want to avoid to receive a one-sheet summary of costs from one side, and a full leaver-arch file of detailed invoices etc from the other side.

In this context, however, some issues arise which may also be discussed at the Hearing:

50 Is Charter Section 20.10 applicable, as Claimant asserts, or inapplicable, as Respondents assert?

51 Does it derogate the Tribunal's authority and level of appreciation under the UNCITRAL Rules?

52 If Section 20.10 is applicable' how to understand better the provision on costs in Charter Section 20,10, referring to an arbitration "in accordance with this Chapter 19"?

53 What would be the yardstick for measuring bad faith or gross negligence or willful misconduct, in connection with a claim for costs?'

On 17 September 2011, Claimant's counsel filed CM-76, a brief responding to issues arising out of the expert witness statement of Andrew Fletcher QC, supported by CX- 256 and an expert opinion on English Law prepared by Romie Tager QC (CWS-10), dated 14 September 2011, and a supplemental witness statement of Mr Carl A Sax (CWS-11), dated 16 September 2011.
On 20 September 2011, Respondents filed 1-RM-33/2-RM-39, requesting the Tribunal to disregard the Claimant’s CM-76 and the supplemental witness statement of Mr Sax as having been filed without first having obtained leave from the Tribunal.
On 16 September 2011, Claimant filed 04-77, a renewed motion for a jurisdictional ruling as to Respondents 3, 4 and 5, referring to the Tribunal's Orders No. 25 paras. 36-39 and No, 28 para. 9, to which no suit was given by Respondents. Claimant requests the Tribunal to rule that Respondents had "full opportunity to present their case to the Arbitral Tribunal",
On 22 September 2011, by CM-78, Claimant commented on Respondents request to exclude CM-76 and CWS-11, maintaining that Claimants responses were proper and did not constitute a bad faith conduct and that, on the contrary, the Fletcher Opinion should be excluded from the files in its entirety.
On 28 September 2011, the Chairman sent out an email explaining his views regarding the admissibility of CM-76 and CWS-11, concluding that - although these filings had not had the prior authorization of the Tribunal - they should nevertheless not be struck from the tiles, and that they might be discussed at the Hearings, to the extent necessary, The same should apply to the legal opinion filed by Andrew Fletcher QC.

In the Chairman's view, as explained in the email, It would be procedurally unwise to discard these filings (while the Tribunal's earlier decision not to consider the legal expert report prepared by Professor E.A. Sukhanov filed by Respondents if Professor Sukhanov without good cause did not present himself at the Hearings for cross-examination - when cross-examination of him had been requested by Claimant's counsel - was a "dear-cut" and rather obvious decision, mandated by deeply rooted notions of due process; the two situations, therefore, could not be seen as being of a similar nature and procedural impact/relevance).

On 29 September 2011, Respondents' counsel requested leave from the Tribunal to submit short written comments in response to CM-76, CWS-10 and CWS-11 in advance of the Hearings.
On the same day, Claimant's counsel agreed to Mr Kropotov's request, proposing however that, prior to the Hearings, any written submission be filed no later than by 13 October 2011.
On 30 September 2011, the Tribunal confirmed its agreement to the foregoing by email.
On 5 October 2011, Respondents filed 1-RM-34/2- RM-40, with brief comments regarding Claimant Mr Sax's witness statement (C-WS-11), and questioning its credibility
On 6 October 2011, Claimant filed CM-79, addressing matters of Mr Sax' testimony.
On 10 October 2011, Claimant filed CM-80, suggesting an expert conferencing with the two English law experts, and opposing Respondents' intention to file a further opinion addressing Mr Tager's opinion.
On 10 October 2011, the Tribunal issued its 33rd Order, addressing the matters raised in CM-80, suggesting the preparation of a joint report of the experts on points of agreement and disagreement or, alternatively, the filing of a short rebuttal opinion by Andrew Fletcher QC; the Tribunal also suggested that the experts might meet in Stockholm just prior to their joint examination.
On 12 October 2011 Respondents filed 1-RM 3.5/2-RM-41 regarding "without prejudice" meetings of the two English law experts Andrew Fletcher QC and Ronnie Tager QC.
On 13 October 2011, Claimant filed a Pre-Hearing Brief elaborating on further aspects of the Investment Contract, the alleged illegal expropriation, and commenting on Respondents arguments. CM-84.
CM-84 was accompanied by an Appendix 1, containing detailed responses to the issues and the questions 1 to 53 raised in the Tribunal's 32nd Order. Hereinafter APP-CM-84.
Further, on 13 October 2011, Respondents filed 1-RM-36/2-RM-42, containing Respondents skeleton brief on liability issues on the 53 questions raised by the Tribunal.

In a separate document, Respondents’ counsel addressed several Russian law aspects, essentially in response to Claimant's CM-76.

Furthermore, Respondents filed a supplemental opinion by Andrew Fletcher QC, dated 12 October 2011 (RWS-7), containing comments to the opinion submitted by Claimant's expert Romie Tager QC (C.WS-10).
On 17 October 2011, the two English law experts Andrew Fletcher QC and Romie Tager QC filed a joint Memorandum on matters of English law on which they agreed and disagreed.
From 17 to 21 October 2011, the Liability Hearings were held at the Strndvägen 7A Conference Center in Stockholm. The following persons participated:

• Claimant: Mr Carl A Sax (as Party and witness)

Andrew J. Durkovic, counsel

Vladimir V. Gladyshev, counsel

Professor Oxana M. Oleynik, as legal export, present on 18 and 19 October 2011

Christer Hakansson, counsel, partly only

Romle Tager QC, as legal expert on English law, present during 20 October 2011

Professor Tai-Heng Cheng, as legal expert on international law, present from 18 to 20 October 2011

Peter Forbes (Director of Alan Stratford and Associates), as expert, present on 18 and 19 October 2011

Ian Rowson, as expert, present on 18 and 19 October 2011

• For Respondent 1 + 2: Professor Oleg Skvortsov, counsel

Leonid Kropotov, counsel

Ms Maria Onikienko, counsel

Josh Wong, counsel

Claes Rainer, counsel, partly present

Elizaveta Reyvakh, as interpreter

Maria Smirnova, representative of Respondent 2

Natalia Nazarova, representative of Respondent 2

Mikhail Lvovich Karpov, as witness

Professor William E. Butler, as expert, present on 20 October 2011

Professor V. A. Belov, as legal expert, present on 20 October 2011

Andrew Fletcher QC, as legal expert on English law, present during 20 October 2011

• Respondents 3-5: no appearances

• Tribunal: Advokat Per Runeland

Professor Andrey Bushev

Mart Blessing

* Court reporter: Mrs Susan McIntyre, Reporting International London, rptgintl@dircon.co.uk

The Parties and witnesses/experts - in agreement with the Parties and their counsel - were heard as follows:

• First Day, Tuesday 18 Oct 2011: Opening by the Tribunal. Discussion of the further program. Claimant's counsel presented and filed two time-charts in colors showing the time-line of the development of the project from its first stages in 1991 to 2007; these time-charts are appended hereto as Appendices 1 and 2. The entire rest of the day was devoted to direct examination and cross-examination of Mr Carl A Sax The examination of Mr Karpov as well as the examination of Claimant's economic experts Peter Forbes and Jan Rowson (initially planned to be heard on the first day), had to be postponed.

• Second Day, Wednesday 19 Oct 2011: Peter Forbes and Ian Row-son, both of Alan Stratford (on the NIPT Rase Case Scenario and the claim for reimbursement of pre-development expenditures, as per their expert reports of April 2011 (CWS-9); thereafter followed by the examination of Respondents' legal experts Professor William Sutler and Professor V.A. Belov, followed by Claimant's legal expert. Professor Oxana Mikhailovna Oleynik.

• Third Day, Thursday 20 Oct 2011: Andrew Fletcher QC and Romie Tager QC, in expert witness conferencing; a bundle on the leading English cases on contract interpretation was submitted, their examination - mostly by the Tribunal - was followed by the examination of Mikhail L. Karpov as witness; Mr Karpov brought with him the Minutes of a seminar of 16 July 1998, in Russian language (an overnight translation thereof was prepared by Leonid Kropotov, and was filed on 21 October 2011 as RX-55), the testimony of Mr Karpov was interrupted in the late afternoon of 20 October 2011 so as to allow the hearing of the testimony of Professor Dr Tal-Heng Cheng on aspects of international law; he delivered a voluminous folder with a collection of rases and materials as references to his (interesting and eloquent) oral presentation between 17h00 and 18h35.

• Fourth Day, Friday 21 October 2011: Opening address by Maria Smirnova, delegate of Respondent 2, followed by continuation of the examination of Mr Karpov. Further statements and examination of Mr Sax; in addition, Mr Sax extensively discussed the Minutes referred to by Mr Karpov (RX-55); by agreement, and due to lack of further time, counsel preferred not to deliver oral dosing arguments; closing of the Hearings in the afternoon of 21 October 2012.

On the last day, 21 October 2011, the Parties and their counsel, with words of thanks, affirmed the correctness of the proceedings, and voiced no criticism regarding due process, fairness of the procedure, their right to be heard and equal treatment. The statements were recorded as follows:

The Chairman : The Chairman: Now, for the record, a very important and serious question. You know this Tribunal has a prime duty; the prime duty is to treat the parties equally, with equality, and to give each party a sufficient time and opportunity to be heard. These are the two prime duties of this Arbitral Tribunal. I now would like to ask, Claimant first and then Respondents, whether ar least on the two prime duties there are any complaints to the proceedings wo had or complaints regarding this Arbitral Tribunal. Can I ask you, any complaint, Andrew?

Mr Durkovic : No complaint at all, and we express our appreciation to all three arbitrators for their fine work and for their patience and for listening to things that perhaps they already understand and putting up with the repetition sometimes and the length of things. Very, vary well done. It Is actually quite an honor to be here with such distinguished arbitrators on the panel. Also our appreciation to the other side. It has been very cordial, thank you; it has been a pleasure working on the other side of the case.

The Chairman : Thank you so much.

Mr Kropotov: No complaints. Thank you to the Tribunal, and we can support what Andrew said in that respect and in respect of the Tribunal.

The Chairman : Thank you. I forgot something very important. Elizabeth, thank you so much for your translation it was wonderful. You were a perfect translator.20

Moreover, on the last day, the further procedure and time-table was discussed, in particular the size of Post-Hearing Briefs and the level of detail for the cost submissions, coupled with the suggestion that counsel may wish to come up with a joint proposal The following steps were thereupon agreed:

• within 14 days: joint proposals of counsel regarding (i) the size of contemporaneous Post-Hearing Briefs and (ii) the format/level of detail of the subsequent contemporaneous cost submissions;

• by Friday 20 January 2012, filing of contemporaneous Post-Hearing Briefs;

• by Monday 20 February 2012, filing of contemporaneous cost submissions.

The Tribunal indicated its intention to notify its Award within March 2012.
On 10 November 2011, Susan McIntyre delivered the verbatim transcripts to the Members of the Arbitral Tribunal and the Counsel who attended the Stockholm Hearings; In total 904 pages plus 107 pages of indices.

On the same day, the Chairman forwarded the transcripts to all other recipients of the Tribunal's communications, in particular to Respondents 4 and 5.

On 16 November 2011, the Tribunal issued its 34th Order, reflecting the sequence of examinations at the Stockholm Hearings, Furthermore, the 34th Order confirmed the further procedural milestones as they had been agreed in Stockholm, i.e. 20 January 2012 for the simultaneous filing of Post Hearing Memorials and 20 February 2012 for the simultaneous filing of Cost Submissions, whereupon the present arbitral proceedings, as far as relating to liability, will be considered dosed, with no further fillings being admitted into the record except upon specific leave by the Tribunal.
In connection with these two further filings due 20 January 2012 and 20 February 2012, the Tribunal invited counsel to communicate Internally in respect of (i) the length of the Post Hearing Memorials and (ii) the format and level of detail and further issues (compensability of Party costs, interest, currency, payment terms) for the preparation of the Cost Submissions.
The 34th Order also Informed the Parties of a further draw-down from the deposit in the total amount of EUR. 202'860, covering interim fees of the Arbitrators on time-spent basis, travel disbursements,. Conference Center charges and charges of the verbatim reporter.
On 12 December 2011, Respondents' counsel transferred the further advance of EUR 100'000-— to the Tribunal's separate account.
On 20 January 2012, Claimant filed the Post-Hearing Brief CM-85, together with an updated Index of Claimant's Submissions CM.1 to CM-85, and an updated index of Claimant's exhibits CX-1 to CX-262, Claimant's PH-Brief essentially focuses on the validity of the Investment Contract, its breach by Respondents under the standards of Russian end international law amounting to an unlawful expropriation and, consequently, the liability for the full quantum of damages, including interest and sanctions.
On the same day, also Respondents 1 and 2 filed their Post-Hearing Brief 1-RM-37/2-RM-43.
On 30 January 2012, Claimant filed CM-86 which discussed a number of issues which counsel to both sides had not been able to solve in respect of the format and contents of their cost submissions due to be filed in February 2012.
On 31 January 2012, the Tribunal Issued its Order, suggesting to organize a telephone conference on either 6, 7 or 8 February 2012. After review of counsel's availability, the telephone conference was fixed to take piece on Tuesday 7 February 2012, at 15h30 Zurich time.
On 7 February 2012, a telephone conference took place attended by Claimant's counsel Andrew Durkovic (partly), Vladimir Gladyshev and Respondents' counsel Leonid Kropotov and the members of the Tribunal for discussing the different views reflected in CM-86 in respect of cost-related issues.
Inter alia, the Tribunal discussed the time for payment and any post-award interest which might be due and payable in respect of the Tribunal's cost decisions. Regarding payment terms, Mr Leonid Kropotov on behalf oF Respondents urged that any payment should only become due after 1 January 2013, because - as he explained - there is no allowance in the City's budget for the current year; Mr Durkovic on behalf of Claimant disagreed and stressed that a payment for reimbursement of Party costs will be due as of the day of notification of the Arbitral Award.
On this query, the Tribunal indicated that it could be minded to grant a grace period of -30 days for a party to reimburse arbitration costs to the other party, but that - certainly - the Tribunal could not endorse Mr Kropotov’s proposal. Applying a 30-day grace period would mean that default interest on the outstanding payment would only start to run as from the 31st day onwards on a simple (not compounded) interest basis. It may be noted that Claimant's counsel, in CM 07 para. 7, agreed to the application of such a grace period.
As for the interest rate, there was discussion whether it should be determined by looking at the lex causae, or whether some other basis would be more appropriate.
On 20 February 2012, Respondents filed the Cost Submissions 1-RM-38/2-RM-44.
On the same day, also Claimant filed the cost submission, CM 87, together with a spread-sheet and the updated indices of CMs and Cxs. As far as the interest rate is concerned, Claimant's counsel requests that any sum awarded to Claimant but unpaid during the grace period shall bear interest at the rate of 21.58 % per annum, charged on a monthly compounded basis.21 Claimant's submission inter alia also contains the Engagement Letter signed between Amsterdam & Peroff and Claimant Mr Sax, providing for stage payments and a 10% success fee, CX-265 and Exhibits.
The discussion of these cost-filings will follow in the Cost Section at the end of this Award.
On 21 February 2012, the Tribunal asked Respondents' counsel for clarification of the claim for recovery of counsel fees, which was answered by return mail of Mr Kropotov.
On 27 February 2012, the Tribunal Issued its 36th Order, granting each side an opportunity to comment on the other side's cost submissions by 27 February 2012, and inviting further comments from Respondents "in case this Tribunal was to decide nn same reimbursement of costs to Respondents’', in particular

• to also state their views with regard to a grace period of 30 days after notification of the Award, and

• to make their views known as to the rate of simple or compounded post-award default interest.

Thereafter, as stated in the Order, the proceedings - as far as they relate to the liability phase - would be closed.

On 27 Fe bruary 20 12, Respondents replied by 1-RM-39/2-RM-45 regarding reimbursement to Claimant, proposing "to set the term for cost-reimbursement as one year after the communication of the Award; the reason for such a long term is that St Petersburg City is a public subject with rigid and long-lasting planning procedures..." and further stated that they would agree to apply the LIBOR rate for 3 months deposits, as a rate which would not depend on the winning party. Respondents "see no grounds to apply interest rate for personal loans in the State of Florida and any further "insentivised" increase of the rate",
In addition, Respondents commented on claimants cost statement by remarking that only some general indications are given regarding the Swedish and Russian counsel, but "no words about trie services", further remarking that travel expenditures to Madrid, Valencia, Portofino etc. are included with no evident relation to this Arbitration, and the same would apply to the fees and expenses of several experts from whom no expert reports had been received.
The Arbitrators deliberated the issues throughout the proceedings and met again in Stockholm during the week of 5 March 2012 for oral deliberation sessions.

H Locus standi, Jurisdiction and Valid Representation

I Arbitrability

The present investment dispute is governed by an undisputedly valid arbitration agreement reflected in Chapter C above. In these proceedings, neither Party has ever raised a concern or a plea that a State court rather than the present Arbitral Tribunal should exercise jurisdiction to hear the claims and to adjudicate the present dispute, and both, Claimant as well as the Respondents I and 2, have actively participated in these proceedings.
The Tribunal reiterates that in the case at hand the Parties relationship is that of an investment, and is based on a complex mix of numerous legal norms, none of which prevails, and which must be analyzed in a close link with others Thus the position Of the investor and stockholder is to be considered along with, and n context of, the rights and obligations arising under the Investment Contract as a whole.
The Tribunal, therefore, affirms its subject-matter jurisdiction.

II Claimant's locus standi - The Parties'Arguments

Pursuant to a Purchase Agreement dated 17 December 2002, filed as CX-66, and pursuant to a Bill of Sale of even date (CX-59), Claimant Mr Sax as buyer in his own name acquired from PSP (also represented by Mr Sax) and SP (also represented by Mr Sax) as sellers, a 29.7% "stock interest" in IAT Pulkovo, as well as a US$ 20+ million pre-development expense receivable from IAT Pulkovo.
According to Article 14 of the Purchase Agreement, a registration of the transfer of the stock-interest was envisaged, but never took place.
The Agreement is governed by, and to be interpreted and enforced with, the laws of England and Wales.
The validity and legal effects of CX-66/CX-59 are disputed by Respondents, particularly in respect of the effects or meaning of the transfer of the "stock - interest", Respondents maintain that no assets other than receivables were transferred, but not the rights and obligations under the Founders' Agreement. Therefore. Respondents argue, Claimant neither became a party to the Founders Agreement, nor did he become entitled to any profits there under. R-Liab Brief para 54/55, Fletcher Opinion RWS-4 paras 73-82.
Respondents further recall that in any event PSP was not entitled to sell its shares without prior approval from all other parties, nor could they be sold, since they had never formally been issued. Claimant, therefore, never became a party to the Investment Project, and thus is "definitely not entitled to file the 29.7% Interest Claim, Development Fee Claim and claim for Reinstatement". 1-RM-32/2-RM-38 para, 62.
Claimant's expert, Romie Tager QC, disagreed with several conclusions; CWS-10.
Prior to the Stockholm Hearings, the two English law experts Andrew Fletcher QC (expert for Respondents) and Romie Tager QC (for Claimant) rendered highly detailed expert opinions on the meaning to be given to the term "stock interest", which - both experts agreed - is not a recognized term of art.
Prior to the Hearings, the two experts met on 17 October 2011 and, thereupon, filed a joint opinion on points of their mutual agreement, and points on which they disagree. They constituted a file containing the Minutes of their Joint Meeting as well as copies of the leading authorities/court cases on which they relied.
Both experts, Fletcher and Tamle, were examined at the Stockholm Hearing, first through examinations by counsel, and subsequently through questions put to them by the Arbitral Tribunal in an expert conferencing mode.22
Under a strict view, Mr Fletcher explained (and taking guidance from the Lord Hoffmann Interpretation principles as reflected in the leading English-law case on contract interpretation, i.e. the Chartbrook Case23, Claimant - for lack of a recognized title - acquired nothing.
Mr Tager, while agreeing that "Chartbrook Is probably the most important case24, disagreed.
In the PH-Brief, Claimant further addressed the issue in some more detail, inter alia referring to Article 7 of the Russian Foreign Investor Law of 9 July 1999 which deals with an investor's right "in accordance with an agreement" to "transfer rights and obligations to another person in accordance with the civil legislation of the Russian Federation".25 Hence, Claimant argues, the Purchase Agreement and Bill of Sale in conjunction with the guarantees reflected in Article 5 of Russia's Foreign Investment Law gave Claimant the right to obtain damages equal to the pre-development. advances plus interest, damages connected to the developer fee and an equity participation equivalent to PSP's 29.7% Interest in IAT Pulkovo.26
Respondents, in their PH-Brief, again denied the validity of the assignment.

III Claimant'slocus standi - The Tribunal's Determination

The Tribunal was not convinced by the rather legalistic approach of the English few experts and the real significance of the chosen English law and, in conducting the expert conferencing, indicated - on a preliminary basis - that the Tribunal would

• rather be minded to look at the quite apparent intentions evidenced by the wording of CX-66, in the sense that, short of being able to transfer the shares as such27, the parties quite obviously intended to provide that Claimant Mr Sax can, to the greatest extent legally/contractuatly possible, "stand into the shoes of SPS/SP" (term as used by the Tribunal in the examination)28, and further:

• that - with such basic understanding of the Intention evidenced by the text - the decisive question would only be to explore to what extent such agreement (made under English law) would deploy valid effects in Russia, i.e. vis-a-vis IAT Pulkovo and its other stockholders.

• which question makes it abundantly dear that the latter Issues will - to the largest extent - be governed by Russian law, and not by English law.29

It is clear that the position as a stockholder may comprise a whole bundle of rights, such as e.g, contractual rights and, foremost, corporate rights (and obligations), including for instance:

• the right to be compensated for expenditures properly incurred for and on behalf of the company (if any),

• the right to cash receivables sold to the stockholder,

• the right as a stockholder to exercise voting rights,30

• the right to receive corporate Information,

• the right to take part in stockholders meetings,

• the right to be paid dividends if and when declared, and

• ultimately the right to receive the liquidation proceeds or the liquidation surplus (if any) upon winding up of the company.

Since the stockholding as such could not be transferred, failing compliance with the statutory procedure Tor validly transferring the stock In accordance with the Charter and the Founders' Agreement, it is however clear that merely contractual claims of SPC/SP (referred to as the "receivables") could be transferred (and indeed, for the purpose of this arbitration, the transfer of contractual claims is particularly relevant), but not, for instance, the exercising of voting rights.
Hence, the validity of the assignment in respect of the pre-development expense claim (explicitly mentioned in CX-66), cannot reasonably be doubted.31 Likewise, it cannot be doubted that the arbitration clause is transferred together with any such claims, as on ancillary right attaching to such claim "like a shadow".32
On the other hand, a stockholder may also have assumed particular obligations vis-a-vis the company, such as Financing obligations, or may have acquired a particular position such as - as will have to be further discussed in the framework of this Award - the position (claimed by Mr Sax) to be chosen as a developer of a project and to assume the function of an investor.
It is in this respect that concerns arose: It is quite obvious that the transfer of the position to be chosen as a developer and investor of the Project is more problematic. Although it remained unclear in this arbitration what exactly such position would comprise, it nevertheless appears obvious that, for instance, the position as a developer would not only consist of the right to claim a 4.5% fee, but most likely would also Involve some kind of obligations, i e. obligations to function as a developer/coordinator, and no further explanations are necessary to state that the position of a developer and investor in such a project does not simply consist of earning revenue; profits first of all will have to be earned, and this may involve a plethora of tasks over years or even decades.33
The obvious problem then is that - according to a quite universal legal notion, including English law34 and Russian law (see Article 391 Russian CC) -obligations (as opposed to simple monetary claims) can only be transferred or "assigned" to another person with the consent of the creditor (the creditor in the instant case being IAT Pulkovo and/or arguably Respondents).
Regarding the claimed 4.5% developer fee (if indeed it. had been agreed -which is an issue addressed below), it is clear that such fee had not already been "earned", but yet would hove had to be earned on the basis of - probably some - activity at least as a developer. Given that It is dear that only a contractual benefit, but not a contractual burden, can be transferred without the consent of the creditors, little further explanation Is needed to state that - for lack of consent - the position as a developer as such (could not validly be transferred from PSP to Claimant. And basically the same applies to the position as a 29.7% investor/shareholder.
Claimant's references, in this respect, to the Russian Investor Law are unconvincing. The referenced Article 7 specifically refers to a foreign investor's right "in accordance with an agreement to transfer its rights and obligations..." (emphasis added); yet, in the present case, the trouble is that there is precisely no such agreement pursuant to which the Respondents had consented ta the transfer of rights and obligations from PSP to Mr Carl A Sax personally.
As regards Russian law, the Tribunal further notes that even assignment of a monetary claim may be restricted Where such a claim is closely connected with specifics of the creditor (Article 383 Russian CC). In the latter case, the assignment of the claim is permissible only subject to the debtor's consent (Article 308 (2) Russian CC).35
In addition, the Tribunal takes into consideration the requirements of Article 1,216.2 Russian CC (The Law applicable to an Assignment of a Claim) under which

"the permissibility of the assignment of a claim, the relations between the new creditor and the debtor, the conditions under which this claim may be made to the debtor by the new creditor, and also the question of proper performance of the obligation by the debtor, shall be determined according to the law that is applicable to the claim that is the subject of the assignment."

Since, in the case at hand, the claims are subjected to Russian law and international law, one may come to the conclusion that restrictions of Article 333.2 Russian CC should be taken into consideration when analyzing the validity and effects of the assignment of the claims to Mr Sax. On the other hand, it is the Tribunal’s view that the application of the statutory provisions, including that of Article 388.2 Russian CC, shall not he made in the abstract, hut must connected to the circumstances of a concrete case, The Tribunal considers that in an investment relationship, as the one at hand, the creditor's persona has a material (essential) significance for the partners.
Taking into consideration that Mr Sax appeared to have been the driving force relating to the pre-development-phase of the Project, and the expenditures incurred, he cannot be considered as a totally unrelated third party as if, for Instance, the assignment had been made to a Chinese Investor who had not so far been involved In the Project. For this reason, the Tribunal concludes that the assignment of monetary claims in tact did not require the Respondent's consent.
Hence, it seems to be legally possible is to accept Claimant’s standing as a transferee of the pre-development advance claim and of the developer fee claim (i.e. the developer fee which SPS could earn under the Project), and of the financial benefits which SPS possibly could derive as the 29.7% investor.
The legal construction in respect of the developer fee and the investor claim would then be the following:

• Since by means of CX-66/CX-59 only claims could be transferred, but not as such the position as a shareholder, SPS remained a shareholder of IAT Pulkovo, and remained a party to the Founders' Agreement;

• To the extent that the Founders' Agreement fore-shadowed that SPS Will be the developer of the Project (as argued by Claimant), SPS - and not Claimant - remained eligible for such task;

• however, SPS can/could, even in advance of earning any remuneration as a developer36, assign such future remuneration to Claimant Mr Sax;

• likewise, as regards the position as an investor and 29.7% shareholder of IAT Pulkovo, it is clear that the shareholding as such could not validly be transferred to Claimant (for lack of consent by the other shareholders, lack of satisfying their rights of first refusal, and for tack of proper issuance of the shares; hence, it is dear that SPS remained the shareholder in IAT Pulkovo even after December 2002;

• however, as it is normally possible that a shareholder can, for instance, be committed to assign future dividends or liquidation proceeds to another party (for instance to a creditor who had granted a loan to the shareholder), it would likewise seem possible for SPS to assign all such future benefits to Claimant;

• In both cases, the debtor of such assignments vis-a-vis would be SPS, and it is SPS which - under CX-66/CX-59 - would be liable to effectuate those payments, not Respondents or IAT Pulkovo;

• however, as ft is Claimant's case that SPS was unlow fully "thrown out-of the Project, and was not further considered after 1999 and beyond. Claimant suffered an indirect loss 37, a loss for which damages might be Claimed;

• such indirect damage is a receivable in the sense as it is claimed by Claimant.

The transfer, therefore, must be regarded as valid as far as any "receivables" are concerned.
As a conclusion, the Tribunal certainly accepts the validity of CX-66 and CX-59 as such, giving them such meaning as is clearly apparent from them on a reading of the rather dear text (which in fact hardly needs an interpretation), in the sense that Claimant Mr 3ax thereby intended to "stand into the shoes of PSP/SP".
The essential question to be analyzed and answered in this Award is to see how far these "shoes" were fit to walk Claimant up the hill to collect and cash the following:

• The reimbursement of the pre-development expenses.

• The alleged 4.5% developer fee and

• The 29.7%. monetized Interest in the future operational profits of the NIPT and/or the AIPT

On the other hand, Claimant's extensive references in his PH-Brief to the Investor protection afforded to foreign investors under the Russian Foreign investor Law are not to the point in the framework of these proceedings, as the further discussion in this Award will show, nor is there room for arguing an expropriation case.’38
To sum up:

The Tribunal concludes that Claimant has standing (locus standi) as regards all the monetary interests claimed herein.

IV Jurisdiction over Respondents

In the present case, some queries were raised in respect of Respondent 3 which, according to Respondents' explanations, became merged into, and was absorbed by, Respondents 4 and 5.
More generally, Respondents - In their Liability Brief as well as in their PH-Brief39 - raised the jurisdictional defense that Claimant should have addressed any and all claims solely to IAT Pulkovo, as the party potentially liable for his claims, and not to his other previous stockholders, basically on the argument that stockholder® do not have liabilities among each other.
Claimant argues that Respondents' liability must be affirmed, given the fact that under their authority TAT Pulkovo became struck from the commercial register.
For the Tribunal, it is obvious that these issues may be rather complex; there is no easy answer for a "post mortem liability" cf stockholders of a company to each other, especially if during the lifetime" of the company such a liability among stockholders was not explicitly provided for (in fact, Section 8.4 of the Founders' Agreement seems to evidence the intention to exclude liability claims among stock-holders).
Nevertheless, the Tribunal Lakes it that there are at least some good grounds to affirm jurisdiction over the Respondents, and by this affirmation to afford ail parties the benefit of arbitral jurisdiction in respect of all of the issues filed in this arbitration. On this basis, the Tribunal conducted these proceedings.

V Valid Designation and Representation of Respondents

Matters of the correct designation of the Respondents and their registered addresses as well as the validity of Respondents' 1 and 2 representation by outside lawyers on the basis of valid powers of attorney have been extensively discussed since October 2010, with clarifications repeatedly sought by Claimant; see eg CM-63/64, CM-77.
Already in its 25th Order of 18 March 2011, the Tribunal dealt with Claimant's concern regarding the name change of Respondent 4 which occurred on 22 November 2010 (and which remained non-notified to this Tribunal), and the change of Respondent 5's registered address. Claimant, in that context, alleged "an attempt to manufacture a future defense against enforcement in Russia of any interim or final award in this arbitral proceeding, much like the defense asserted by Samaraneftegaz in Yukos Capital SARL v/Samaraneftegaz."
The Tribunal already addressed these Concerns In its 25th Order, and the reasoning there given entirely stands as a conclusive reasoning for the present Award; the decisive part, reflecting a deeply rooted notion of due process, may he rooted by the following extract from the 25th Order:

"A party (here Respondents) which had been validly addressed as a Respondent in arbitral proceedings, is under a duty to notify the Arbitral Tribunal end the other Parties of any changes of its corporate name and structure as well as of its changed address for allowing a valid service of communications. A failure to do so cannot later on, or in any subsequent (enforcement-) proceedings, serve ss an argument that the Party had not been validly kept informed of the further arbitral proceedings. - For this simple reason, Claimant's concern is not well-grounded."

The 25th Order further dealt with the validity of counsel's mandate to represent Respondents 1 and 2 which was signed by the first Deputy Director of Respondent 2 whose authority to validly sign such mandate was doubted by Claimant
Similarly, in this respect, the Tribunal in its 25" Order considered that it would be...

"....quite unthinkable that, in any subsequent/resulting enforcement proceedings, one or the other of the Respondent Parties would invoke that it had not been properly kept informed on the present arbitral proceedings and any of the numerous procedural steps, or invoke that the company name or service address for communication was wrong, or invoke that a particular service Address should have peen used as opposed to the business address, or invoke that any of its legal counsel were at any given moment in time not properly mandated by Respondents 1 and 2, or would invoke that the Power-of-Attorney, executed by the first Deputy Director Mr O.A, Ljapustin was invalid for some formal internal flaws or lack of authority."

As the Tribunal further stated:

"Any of the above defenses, or defenses of a similar nature, whether raised in these proceedings or in any subsequent proceedings or enforcement proceedings, would look "so bad" and would seem to be so dearly nonmeritorious by any standards that the present Arbitral Tribunal finds it unnecessary and unwarranted to burden the present proceedings with continuing queries of the present nature."

Summarized in an abstract form, the Tribunal noted:

"A party (here; Respondents) which over a period of time knowingly and without intervention accepts to be represented by counsel/outslde counsel cannot later on, or in any subsequent (enforcement-) proceed lugs, deny the validity of such representation - whatever legal system applies, For this simple reason, Claimant's concern is not well-grounded."

A footnote mentioned:

"This notion is so clear and obvious that no legal authorities need to be cited, indeed, any citation could only dilute the clarity of the Tribunal's dictum."

All of these reflections are made part of the Tribunal's jurisdictional decision as per the present Award, and hence this Tribunal is sufficiently satisfied

• (i) that Respondents 1 and 2, purported to be represented by counsel, had indeed validly mandated all of their legal representatives, and that

• (ii) all Respondents were at all times validly kept informed on the proceedings, and had all appropriate opportunities to make their case known to the Tribunal.

• (iii) In particular, the Tribunal addressed special invitations in its Orders for all of the Respondents to delegate an in-house counsel or member of the management to be present during the Hearings, so as to get their own impressions on the appropriateness and correctness of the proceedings.

• (iv) And the Stockholm Liability Hearings were attended by two representatives of Respondent 2, i.e. Maria Smirnova and Natalia Nazarova, with the former addressing the Tribunal at the last day of the Hearings;40

• (v) Mrs Smirnova, in particular, explicitly confirmed the following:

"First of all, being a representative of the City Property Management Committee I would like to emphasize that the legal position represented by DLA Piper during the proceedings is totally supported by and agreed with the Committee, and of course wo tan see that all the claims set forth In the claim of Mr Sax are groundless, but I would like to elucidate (or) a bit different aspect...41

Needless, to mention that the Tribunal Is moreover satisfied that the counsel appearing for Claimant had been properly mandated, although the Power or Attorney issued by Mr Cart A Sax in favour of Amsterdam & Peroff, dated 9 December 2009, was only valid for one year.
To sum u p:

The Tribunal is entirely satisfied that Claimant as well as Respondents 1 and 2 were at all times properly mandated by their lawyers purporting to have been given such mandate.

Moreover, the Tribunal is satisfied that all the Respondents (including Respondents (3), 4 and 5) were at all times sufficiently and correctly kept informed on the proceedings, and at all times had the possibility to make their views known to the Tribunal.

I A First Review of the "Investment Contract" and Supporting Documents Filed in this Arbitration

The two documents, i.e, the Founders' Agreement (CX-6, RX-1, RX-23) and the Charter (CX-5, RX-2, RX-24), have been characterized by Claimant as constituting an "Investment Contract" related to the development and construction. of art international passenger terminal facility (the Investment project); it "comparts with internationally-recognized practices concerning so-called 'build, operate and transfer’ investment contracts". CM-84 para. 7. Respondents also used the term of "Investment Contract".
In CM-84, para. 7, Claimant stated that the Investment Contract

"was drafted, reviewed, revised and executed under the auspices and supervision of a team of specialized international lawyers familiar with both Russian and international law."

At the Stockholm Hearing, upon question of the Tribunal as to who drafted the texts forming part of the Investment Contract, Mr Sax gave to understand that the texts came from the US side, without giving any more precise details.
The investment project was Initiated by a "Protocol" (which In these proceedings was most frequently referred to as the "Protocol of Agreement") of 16 March 1994 (CX-2), and was followed up by the Founders' Agreement of 19 May 1995 (CX-6) and the Charter (CX-5).
It would serve no useful purpose to describe all the elements of the three documents, i.e. the Protocol of Agreement, the Founders' Agreement and the Charter; however, for the further discussion hereinafter, it is helpful to recall just a few provisions which are of particular significance.
The Protocol of Agreement of 16 March 1994 (CX-2) - which had been drafted by Mr Sax42 - could best be characterized as a memorandum of intent43 reflecting The agreement to establish a joint stock company, premised on the recital according to which "SP and SPBD have agreed to provide Financing (..) and guarantees to construct the Complex, and to design (..) engineer and construct the Complex with the participation of focal Russian companies" (preamble to the Protocol).
Clause 2 provides that "the Foreign Partners shall secure financing for 190% of the cost to construct the Complex, which is anticipated to be approximately US$ 75 million, from the European Bank for Reconstruction and Development (EBRD) and from its own participants, and shall guarantee repayment to the EBRD. "
Regarding the shareholding in the joint stock company, Clause 5 stated: "The Russian Parties shall be entitled to 66 2/3%, SP shall be entitled to 29 2/3%, and SPED shaft be entitled to 3 2/3% interest in the stock and dividends of PIATA" (i.e. the joint stock company).
Regarding dispute resolution, Clause 8 of the Protocol provided for LCIA arbitration in Stockholm, Russian law as applicable law, with each party to bear their own costs and half of the cost of the tribunal, unless the arbitration panel determines a different allocation "according to the equities of the matter in dispute".
In view of the claims made in the framework of this Arbitration, it is noteworthy to remark the "cornerstones" of the Protocol, i.e. on the one hand

• the Foreign Parties' financing obligation,

• coupled with the 2/3 Russian to 1/3 foreign participation in the joint stock company and,

• on the other hand, absence of a provision In the sense that expenditures as may be Incurred by the Foreign Parties could be invoiced to the Russian Parties, or could otherwise be recovered from the joint venture company.

According to the Founders' Agreement, dated 19 May 1995, IAT Pulkovo was to have a share capital of Rubles 50 mio, divided into 1'000 shares of Rubles 50'000 each, Whereof the Property Management was to acquire 303 shares, the State Enterprise Pulkovo 334 shares, SP 297 shares (thus representing 29.7% of the share capital), and two Western minority shareholders (Grassi and SPBD) 33 shares each.
The Russian Parties, therefore, were to control 63.7% of the share-capital, with the remaining 36.3% being subscribed by the Foreign Parties. No less than 50% of the purchase price for the shares was to be paid prior to IAT Pulkovo's registration, the balance to be paid within the first year of the IAT Pulkovo's registration (but for the Property Management Committee which was to pay its share by leasing to IAT Pulkovo the plot of land on which the Terminal was to be constructed.
The Founders' Agreement set: out the obligations of the Parties with respect to the establishment of IAT Pulkovo, laid down details for the management of the Company, and set out the plans of the further cooperation.44
Regarding the expenditures of the Founders, Section 6.3 provides that each Founder "agrees to pay its own expenditures related to the Company's formation incurred prior to the Company's registration''.
Section 3.4 is an exit-clause allowing the Founders - under the terms of the clause - to withdraw themselves, whereupon "the Company shall be deemed as invalid, and shall be liquidated with each Founder accepting to bear any damages itself, "and shall not transfer responsibility for them to other Founders".
Further, rather detailed provisions of the Founders' Agreement deal with transfer restrictions regarding any disposition of shares, requiring the presentation of an "Acquisition Proposal" to the other Founders/shareholders, allowing them to exercise their pre-emptive rights under Section 11.1 to 11. 4 of the Founders' Agreement (with certain small-scale permitted dispositions according to Section 11,10).
Again, in view of the claims made in the framework of this Arbitration, it is noteworthy that:

• the repartition of the shareholding, is now 63.7% for the Russian Parties, and 36.3% for the Foreign Parties,

• there is no provision for the reimbursement, by Respondents or by EAT Pulkovo, of expenditures as may be Incurred by the Foreign Parties In connection with the tasks they have assumed to provide a financing commitment; to the contrary:

• Section 6.3 of the Founders' Agreement provides: "Each Founder agrees to pay its own expenditures related to the Company's formation incurred prior to the Company's registration;"45

• Section 8.4 of the Founders' Agreement (already referred to above) then spells out what should happen at the end : it deals with damages as may be suffered by the parties who had "funded the establishment of the Company and implementation of the provisions of Article VIII" and provides that each such Founder "shall accept these damages as its own, and shaft not transfer responsibility for them to other Founders" (emphasis added) -- a provision which, as the text says, is broadly worded, covering not only the funding, by any of the Founders, oF the establishment or IAT Pulkovo, but moreover whatever had been done For the implementation; and as regards the Foreign Parties, the wording suggests a conclusion that it also covers all their expenditures incurred in the context of Section 8.1, i.e. in the context of their efforts to obtain the debt-Financing.

• Further important elements are the tight transfer restrictions as per Article XI, and

• The Dispute Resolution clause is set out in Article XII.

The Charter, equally dated 19 May 1995, excludes in Chapter 3.5 the liability of the Founders other than up to the value of their shareholdings; and Chapter 4.11 provides for the issuance of share certificates In accordance with the contributions paid by each of the shareholders.
Chapter 4.16 of the Charter states that the estimated cost to develop and construct the Terminal

"will be up to US$ 100 million, including capitalized deferred construction expenses. The Foreign Parties will use their best efforts to seek debt financing for the Company from Independent banks in the amount or US$ 60 million".

Further, Chapter 4.16 provides:

"It is understood under the financing documents that the Company will be the borrower and PSP will be responsible for guaranteeing the obligations of the Company to the banks. No other Founder will bear responsibility for the obligations of the Company under the financing documents "

Chapter 11 deals with the decisions requiring a unanimous vote at a Shareholders' Meeting.
Chapter 12 of the Charter provides for a Board consisting of 11 members, whereof 6 nominated by the Russian Parties and 5 by the Foreign Parties. Resolutions are basically passed by majority.
However, Chapter 12.7 of the Charter contains a long catalogue of decisions requiring unanimity, such as e.g. the "entry into any contracts, agreements and borrowings, In any amount exceeding US$ 10'000 or its equivalent" and the "retention of professionals providing services to and on behalf of the Company".
Chapter 13 of the Charter provides for a Management Committee consisting of "Executive Officers" which, according to Chapter 13.3, were to be appointed at a Board of Directors' Meeting.
Chapter 16 of the Charter provides for very detailed transfer restrictions regarding share deals, in a more elaborate fashion than those provided for in the Founders' Agreement.
Termination of IAT Pulkovo shall occur by unanimity of the shareholders, or upon a court decision or decision of an arbitral tribunal, or in accordance with the Founders' Agreement and the Russian legislation (Chapter 17).
An indemnification clause provides for holding the directors and officers of IAT Pulkovo harmless in case of suits, Claims or actions brought against them (Chapter 19).
Chapters 20 and 21 contain the dispute resolution provisions and applicable law clause referred to above in Chapter C.
For matters of interpretation of the Investment Contract, Claimant - in CM-84 para 8 - referred to Article 431.1 and 431.2 Russian CC on the interpretation of contractual obligations, which for the research of the real intentions and common will of the parties to a contract, determines that

"all surrounding circumstances shall be taken into consideration, including negotiations and correspondence which preceded the contract, practice established in the mutual relations of the parties, business custom, and subsequent conduct of the parties."

Although a detailed account on the negotiation and drafting history of the Protocol of Agreement (and the subsequent Founders' Agreement) would have been of significant interest to the Tribunal so as to obtain a deeper understanding of the points which may have significant importance for the assessment of the present dispute, for instance in respect of

• the repartitioning of the stockholders' participation quotas,

• the maximum amount of the loan financing,

• matters regarding the bearing of costs and expenses incurred by the Parties,

• the exit clause of Section 8.4,

• matters of representation of the joint-venture company IAT Pulkovo etc.

• the hold-harmless provision in Section 19 and its relation to Section 20

no such details or other sources of information (which could have shed a light on those aspects that were particularly significant or important to the Parties) were provided by either side (neither preparatory drafts and their revisions, nor any notes on discussions/negotialions).

Apart from the above three documents, numerous further documents were filed in this arbitration.

However, a simple review (i) of the Investment Contract and (ii) of the further files submitted by the Parties in these proceedings, shows that, significantly for the present dispute,

• none of them evidences or provides for an explicit Written authority, granted or to be granted to SPS or Mr Carl A Sax personally, to represent IAT Pulkovo or the other shareholders/Respondents vis-a-vis any third parties,

• none of them evidences or provides for the passing of a Resolution of the Board of Directors, following up on Chapter 13 of the Charter, appointing Mr Carl A Sax as Co-President or Vice-President of IAT Pulkovo, let alone with sole signing authority on behalf of IAT Pulkovo, and

• more particularly: none of the documents submitted in these proceedings provides for an authority, which allegedly had been granted to SPS or Mr Carl A Sax personally, to deal with and negotiate on behalf of IAT Pulkovo or the other shareholders/Respondents with financial institutions such as DMG and EBRD;46

• moreover, no contractual provision contains a straightforward obligation for the other shareholders/Respondents to tel quel accept a (or indeed any) financing proposal that may be submitted to them by SPS or Claimant;47

• no document was made known in these proceedings which purported to grant an authority or mandate to SPS or Mr Carl A Sax personally to unilaterally appoint any professionals or consultants or other service providers or advisers on behalf of the Company, or at the expense of either IAT Pulkovo or Respondents.48

Furthermore, no transfer of shares in IAT Pulkovo in favor of any lending institution reducing the shareholdings of the Russian Parties was envisaged in the Investment Contract.49
Moreover, no conversion of PSP's or Claimant's project expenses into a loan had been foreshadowed in the Investment Contract, as this was later on requested in the Credit Proposal pr EBRD, Clause 3.2.2.
No developer fee of 4.5% for the management and construction of the Terminal is mentioned in the Investment Contract. Section 3.3 of the Founders' Agreement only contains a clause whereby the "Stockholders shall recognize the Importance of the following agreements to the Company and cooperate with its efforts to enter into each of the following: (omissis) (c) Project Development Agreement between the Company end PSP",
No pledging of the shares in IAT Pulkovo was fare-shadowed in the Investment Contract, as this was later on requested in the Credit Proposal of EBRD in Clause 3.3.4.
No possibility of the transfer of management functions to any third party or provider (such as Aeroports de Paris) had been contemplated in contractual documents.

J References to Provisions of Russian Law

In the framework of (he present case., numerous provisions of Russian Law were referenced and discussed, inter alia;

• Articles 17, 35, 46 and 55 of the Russian Constitution

• Article 61 of the Russian CC on the liquidation of a legal person,

• Article 128.1 and 128.2 Russian CC on the power of representation, and Article 185 and 187 regarding powers of attorney,

• Article 21 of the Law on State Registration,

• Articles 420 Russian CC in connection with Articles 309 and 310 Russian CC,

• Article 307 Russian CC on contractual rights and obligations,

• Article 421 Russian CC, cited by Claimant in connection with a mixture of provisions creating mutual obligations, CM-84 para 6,

• Article 328.1 and 328.2 Russian CC on reciprocal obligations,

• Article 450.2 and 450.3 Russian CC regarding out of court unilateral withdrawal from a contract; Article 405.2 Russian CC cited in conjunction with and Art 153 and Article 158.1 and 158.2 Russian CC,

• Article 15 CC on the right to compensation for damages suffered,

• Article 401 Russian CC and the mirroring provision for tort of Article 1064 Russian CC,

• Article 183 Russian CC on the conclusion of a transaction by an unauthorized person,

• Article 393 Russian CC on the liability for damages in the case of a breach of obligations,

• Article 388.1 Russian CC regarding the assignment of rights and the exception clause in Art, 388.2 Russian CC,

• Art 391.1 Russian CC regarding the assignment of a debt,

• Articles 196, 200 and 208 Russian CC regarding the Statute of limitations,

• Article 69 Russian CC on Joint Stock Companies.

Moreover, references to the Russian Federation's Investor Protection Laws and Russian Competition Law were made, in particular to:

• Law No. 1545-1 of 4 July 1991, Articles 1-3, 6-8, 15, which was operative at the time when the Founders' Agreement was concluded in 1995 (CX-106), in particular Art. 7 (RX-33),

• Law No. 160-FZ of 26 July 1999, Article 2, 4-7, 10, 20 (which - Claimant explained - is the law which currently in force, CX-132).

• Law No. 1488 of 26 June 1991 Concerning Investment Activities in the RSFSR,

• St. Petersburg Investor Protection Laws of 1998 (CX-130)

• Russian Law on Protection of Foreign Investments, Articles 2,5, 6 and 7, regarding investor protection and the transfer of rights,

• Law of RSFSR On Competition and Restriction of Monopolistic Activities in Commodity Markets, of 22 March 1991 (RX-33),

• Federal Law on Competition, dated 26 July 2006 (RX-34), currently in force.

In addition, numerous references to Russian court cases and decisions were made, as well as references to international arbitral awards.

K Introduction to the Substantive Discussion

For the purpose of the substantive discussion, this Award will follow the List of 9 Issues as reflected in the 32nd Order of 2 September 2011. The issues, as listed in the 32nd Order, are quoted in the headings of the following Parts L to R of this Award, and the more particular Qs Nos 1 to 53, as identified by the Tribunal in the 32nd Order, are restated in small caps.
In preparation for the Stockholm Liability Hearings, both sides submitted Memorials addressing seriatim all of the issues and each one of the 53 questions below; Claimant did so In CM-84 and in a detailed APPENDIX ("APP CM-84", a document without pagination; pages manually inserted by the Tribunal, numbered 1 to 27) filed on 13 October 2011, and Respondents 1 and 2 did so in 1-RM-36/2-RM-42, equally dated 13 October 2011 (together with separate comments on Claimant's summary on Russian law applicable to the Purchase Agreement stipulated In CM-76).

It is, for the purpose of this Award, therefore deemed most appropriate to review the Issues 1-7 one by one of the Questions, and to conclude each Chapter with short answers; Issue B wiil be addressed in the Cost Section.

L Issue 1:

Did the Foreign Parties/Claimant Perform Properly, and Were the Financing Terms, as Proposed by EBRD, Satisfactory Such that the Russian Parties Should Have Accepted Those Terms?

1 Regarding the EBRD offer is there a significant discrepancy between basic terms or the Founders' Agreement CPA"), and the EBRD offer?

2 What about, for Instance,

(i) the increased amount of the loan,

(ii) the interest terms,

(iii) the removal of majority for the Russian Parties of 63.4% to a majority of the Foreign Parties/EBRD, by the required transfers of 21,5%

(iv) pledging of the shares in favor of EBRD,

(v) transfer of management Functions to Aeroports de Paris?

3 Hence: Have the foreign Parties property fulfilled their "primary obligation", by providing the EBRD financing offer as it was made?

4 Were the Russian Parties bound to accept whatever financing otter would be presented? Or were they free to reject it, or let It lapse time-wise?

I Claimant's Position

Claimant in these proceedings emphasized in all of the substantive submissions that Claimant had properly fulfilled his contractual duty by "employing all necessary efforts" to obtain the financing commitment. The most detailed account of Claimant's position was given in App CM-84, Med a few days prior to the Stockholm Liability Hearing, addressing seriatim all of the Issues and Questions put by the Tribunal in its 32nd Order
According to Claimant, the fact that the financing commitment was not already obtained by the 31 December 1995 deadline, set out in Section 8.1(c) of the Founders' Agreement, was not a breach of the Investment Contract, because, in the above sense, "the Foreign Parties were dearly employing 'all necessary efforts’ to obtain such commitment"; CM-66 para. 5.
Most essentially, Claimant argues that PSP properly fulfilled its primary obligation, and that there was no significant difference between the Founders' Agreement and the EBRD proposal, essentially since the "the Founders Agreement requires such financing as is necessary to construct and commence operation in Section 8.1 (b)'".50
Hence, Claimant' case is to maintain that:

• the Foreign Parties properly complied with their "primary obligation" (CM-66 para. 2) to secure the financing for the NIPT, and

• the terms of the financing had been agreed by the Parties to the Investment Contract (CM-66, para, 4; Mr Sax in CWS-6, paras, 24-57), and

• the Investment Contract included firm obligations of the Parties.51

• Furthermore, Che amount of the financing needed was assessed by DMG/EBRD, and the Founders' Agreement contemplated that the amount of financing might increase;

• Interest terms had not been specified in the Founders' Agreement, and the EBRD indicated a commercial pricing52;

• regarding the removal of the Russian 2/3-majority, Claimant calculated that the Russian Parties even after the exercising of the DMG- and EBRD-options would still control over 50% in IAT Pulkovo;

• EBRD'S request regarding the pledging of the shares of IAT Pulkovo, according to Claimant's testimony, "was commercially reasonable, by definition";53

• The further EBRD requirement that the management functions should he assigned to a Western provider (i.e. Aeroports de Parts) was also necessary for the project to qualify as pertaining to the private sector;

• Mr Sax underlined the latter aspect at the Hearings; "EBRD required a Non-Russian management to qualify for Pulkovo-3 as a private sector project... with regard to compliance, 1 believe that the private sector criteria of EBRD were commercially reasonable and I know that they were agreed to by SEP.. "54

• Even If the EBRD proposal had to be considered unacceptable by the Russian Parties, they were still bound by the Founders' Agreement; yet, according to Claimant, the Russian Parties could have properly withdrawn from it, or could have negotiated an exit scenario; neither was done.

• The exceptio non (rite) adimpieti contractus Is not available to the Russian Parties, and Article 328 CC does not provide a basis.

• Even if the Russian Parties were well-founded not to take the EBRD offer further, PSP could rightfully continue to claim to be part of the Investment Project which was not terminated In accordance with procedures available under Russian law, and PSP's performance was moreover accepted by the Russian Parties.55

• The provisions of the Founders' Agreement remained binding and there was no right to repudiate the Investment Contract, or to tacitly terminate It.

• The disinterest of the Russian Parties was only realised on 2 October 2007 when Claimant, was advised Chat the City of St. Petersburg intended to develop the N1PT/AJTP without the participation of Claimant and/or PSP.

• In Mr Karpov's letter of 16 April 2003 CX-69), Claimant finds evidence that the Russian Parties confirmed fulfillment of Claimant's primary obligation, that the Founders' Agreement was still in effect and that any dissolution required the consent of all shareholders.56

• Regarding the question whether SPS or Claimant properly fulfilled the primary obligation regarding the providing of a financing offer, Claimant’s answer is a dear "yes".

However, Mr Sax also fully agreed - upon a question by Respondents' counsel - that the Russian Parties "had full rights not to agree to proceed with the EBRD proposal",57 Claimant also confirmed this explicitly in the Appendix to CM-84 at page 7, answering issue 4.
At the Stockholm Hearings, Claimant Mr Sax in his testimony, maintained that Respondents should have accepted the financing offer of EBRD, despite some changes to the parameters as they were initially set out in the Protocol of Agreement and the Founders' Agreement. At the Hearings, Mr Sax described the significant benefits which would have been available for all parties, including the Russian Parties, had they accepted the financing offer which, as he explained, in 2011 would have been fully amortized.
Asked by the Tribunal whether the financing proposal of EBRD, as presented, fell outside the parameters which Initially had been discussed and agreed between the Foreign Parties and the Russian Parties, Mr Sax, in his oral testimony as a witness of 18 October 2011, defended the reasonableness of the EBRD financing proposal; for Instance, EBRD did not ask for control over IAT Pulkovo, but on the other hand required debt-subordination for satisfying their requirement as to the equity: debt ratio.58
The Tribunal explored some further details regarding the magnitude of the required financing, noting that the Protocol of Agreement envisaged a financing in the approximate amount of US$ 75 Million59 ;the question was put to Mr Sax whether that figure was a negotiated figure, whether for instance the Russian Partners had a cap in mind in the region of that amount, and whether Mr Sax - in the framework of the discussions regarding the Protocol of Agreement - indicated or "warned" that the financing requirement could in the end be much higher, such as U5$ 100 Mio or 200 Mio.
On the latter question Mr Sax replied that "we all agreed that the guesstimate was US$ 75 million, However, quite frankly, nobody knew exactly what it was going to cost because everyone knew that the EBRD loan process was a tedious, time-consuming process going over multiple number of years, and obviously during that period there would have to be adjustments of the cost".60
Considering that the EBRD financing proposal in Fact indicated a financing requirement in an amount more than double of what has been contemplated, the Tribunal remarked at Che Hearing that such proposal meant that, in the end, the Russian Parties had to pay most of the bill For such financing through the operation of the Terminal. Mr Sax replied as follows:

"I think your question is relevant if the profitability of the project Is In question. However, if the profitability of the project is all excessive that all of the parties, including the Russian Parties, are making more money than they have ever made before in the entire history of the Russian Federation, then in fact whether it costs 75 million or 150 million or 200 million is irrelevant "

Apart from the estimated amount of financing, the Protocol of Agreement laid down a further cornerstone by stating the Parties' participation in the Project, by providing that the Russian Parties shall be entitled to 66 2/3% and the Foreign Parties to 33 1/3% (29 2/3% for Strategic Partners and 3 2/3% for SPBD. On the question put to him at the Hearing, Mr Sax confirmed that this repartition was a negotiated repartition, in the sense of a "two-thirds/one-third deal"61
On further question by the Tribunal whether a two-third majority was important for the Russian Parties, Mr Sax replied:

" Mr Sax : If we said at the time that you get only 51%, then unless we were able to put the money on the table, they would not have signed. With the money on the table, yes, they would have signed at 50,1%, but don't think that the negotiations at that time -- I understand the question that you are asking, but I can’t honestly answer the question. Again, I will say the 66% and one-third different was a discussion; it was not a thoroughly contested item..."

In another context, a similar question was asked as to Whether the shareholdings, as initially agreed between the Foreign Parties and the Russian Parties in the Protocol of Agreement, were to be considered fixed. In his response, Mr Sax referred to Section 14.3 of the Founders' Agreement which as he said - contemplates that

"in the event the financiers ask for shares, that we agree, the Founders' agree, to dilute our shares pro rata. There was also an agreement -- oral -- between myself and the Russians that die Russian shares would nor fall below 50.1%"62

Fact Is that the EBRD/DMG required - as a condition for their Financing -the surrender, In their favor, of a 21.5% shareholding in IAT Pulkovo (respectively in a new Project Company to be formed63). Mr Sax commented on this requirement as follows:

Mr. Sax : "Now was the EBRD 1.5% the exact number contemplated when the Founders' Agreement was signed? No. Was it contemplated that they would ask for a share Interest? Yes. Was the DMG number of 20% contemplated at the time the Founders' Agreement was signed? No. Was it contemplated that they would ask for a Share interest' Yes, because we didn't know the number Did I tell my partner DMG at the time that they were being greedy’ Yes, Did the Russians say that DMG was being greedy? Yes. Would I agree today that they were being greedy? Yes, But it is what it is, because in 1998 there were a lack of financiers available in Russia and if you did not go to DMG or IFC or OPIC, quite frankly you couldn't find senior debt financing, and If you didn’t deal with somebody like DMG or Credit Suisse or someone like that you couldn't get subordinated debt or equity or mezzanine financing or whatever you want to call it at the time.

So to directly respond to your question: the Russians knew. They didn't like the 20% and neither did I. They may not have liked the 1.5%, but they knew it was a "falt accompli", quite frankly, at the time that the EBRD asked for it because there was not an alternative lender of EBRD stature. And even if you take the numbers and you work the numbers out the Russians never fell below choir 50.1% threshold that they were interested in maintaining, even with the dilution of the EBRD and DMG."64

The EBRD proposal also contained further aspects, which wore all "commercially reasonable", such as e.g. the requirement of issuing shares and the requirement that o new project company replacing IAT Pulkovo should be formed, as Mr Sox explained at the Hearing.65
In sum, it is Claimant's case to argue that Respondents "against good faith":

• failed to accept the terms of the EBRD financing proposal,

• failed to implement numerous steps towards implementation of the Project (starting with failures to obtain governmental permissions, failure to build an apron as well as access roads, failure to provide for a correct management and administration of IAT Pulkovo, and

• inter alia also failed to Issue the IAT Pulkovo share certificates.

The Founders, Claimant nevertheless acknowledges, had the option to terminate the relationship, either by terminating the Ground Lease, or by with drawing from IAT Pulkovo and liquidate the company; however, neither right was exercised.66 In the opposite, according to Claimant, the Parties

"... continuously treated the investment Contract as valid and enforceable until 2 October 2007 when Claimant was advised that the City of St. Petersburg would develop an international passenger terminal at Pulkovo Airport without claimant's participation".67

II Respondents' Position

Respondents, in Rejoinder paras. 120-172 and 1-RM-32/2-RM -38, paras. 167-182, and throughout their PH Brief, maintain that they have fulfilled all their obligations under the Founders' Agreement correctly and that the Investment Project was not realized due to Claimant’s failure to meet his primary obligation by providing an acceptable financing commitment.
More particularly - addressing Claimant's allegation that the City of St, Petersburg had not helped EAT Pulkovo in obtaining all permissive documents and did not use all best efforts for the project to succeed, did not build an a prion and roads such that the financial closing had not occurred Respondents maintain that the permissive documents had been obtained by 15 July 1998, as confirmed by CX-10 and CX-21. And as regards the alleged obligation to construct an apron and access roads, Respondents deny that they had assumed any such obligation in fact, such obligations were proposed by the EBRD as a condition for obtaining the financing, but the EBRD's proposal had never been accepted by Respondents.
Already in Rejoinder para. 132, and repeated in 1-RM-32/2-RM-38, para. 177, Respondents maintain that roads had to be constructed by Iat Pulkovo, not by Respondents, and it was not an obligation oF the City of St, Petersburg to construct any of the roads, utilities or the apron.
Furthermore, the Foreign Parties had no authority, on behalf of IAT Pulkovo or the other shareholders, to represent them in relations With other third parties, for any of the following (Rejoinder, para. 96):

"(i) Assign different consultants and advisors and execute contracts with them, (ii) agree on specific terms and conditions of debt financing, (iii) incur multi-million expenses, and (iv) spend money for any other arrangements either related or not related to the Investment Project, The Claimant was not a representative of the Respondent and was not entitled to act on their behalf and spend any money- Therefore, any actions of the Claimant in the course of attracting financing were mode on his own, at his expense and without any consent or approval of other shareholders of iat Pulkovo,"

For Respondents it is clear that Claimant "solely caused the failure and subsequent termination of the Investment Project", by not providing the financing commitment on acceptable terms, i.e. by submitting a financing proposal with substantial delay and on terms which Respondents could not and were not obliged to accept since, inter alia, they contradicted the initial agreements of Che Parties to the Investment project and the Founders' Agreement and were commercially unreasonable, involving three times increased costs.
At the Stockholm Hearings, the adequacy and acceptability of the financing commitment was reviewed in great detail, with the benefit of the testimonies of Mr Sax and Mr Karpov.
Summarizing Respondents' arguments, the following points may be shortlisted:

• Claimant was required to provide "the guarantee of obtaining financing"'68 which he failed to do;

• the time limit for obtaining the financing was not met: the deadline for obtaining financing had been established in Section 8.1 (c) and 8.4 of the Founders' Agreement and expired on 31 December 1995, and no agreement is In place according to which an extension had been granted;

• the financial terms proposed by EBRD were commercially unacceptable;

• the EBRD moreover only Issued a proposal which as such was not a financial commitment, nor a guarantee to provide financing;

• Claimant never had the power to negotiate on behalf of IAT Pulkovo or its shareholders, and in any event any and all commitments or agreements would have had to be signed off by both, Mr Demchenko and the Claimant; the Founders' Agreement nowhere envisages an authority given to Claimant to represent any of the shareholders of IAT Pulkovo;

• the two documents filed in support of an alleged authority, CX-14 and CX-15, are incomplete extracts and do not constitute sufficient evidence of an alleged authority;

• Claimant should have worked together with the Chairman of the Board, Mr Boris G Demchenko, and documents required to be countersigned by him;

• Claimant even failed to show evidence that he had been appointed Vice-Chairman of IAT Pulkovo; under Russian law there is no such special position within a Board of Directors of a Joint stock company such as a Vice Chairman; Claimant may only have been entitled to act for IAT Pulkovo If he hod been given a power of attorney, and Claimant himself does not assert that such power of attorney existed;69

• furthermore, under Article 12.7 of the Charter, an approval of the Board of Directors Is required for the execution of any commitment exceeding US$ 10'000, and Article 11.2 requires an unanimous approval for the construction budgets or commercial budgets and for the business plan;

• moreover, the Russian Federal Law on Joint Stock Companies, in Articles 78/79, requires a Board approval for large scale transactions, or approval by the Shareholders' Meeting;70

• the EBRD proposal contained a long list of conditions precedent which EBRD required to be fulfilled;

• Respondents had never agreed to unconditionally accept any and all of the terms of financing which might he proposed by any member, and Claimant himself recognized this;

• the fact that Respondents continued their cooperation with the Claimant, giving him a chance to fulfill his commitment, does not mean that the Respondents had agreed to renegotiated the terms for obtaining the financing;

• in fact, the terms proposed by EBRD could not be approved for commercial reasons, particularly due to significant discrepancies and con traditions between the proposal and the basic terms laid down in the Founders' Agreement;

• the amount of the loan was increased by a multiple of three in comparison to what was established in the Founders' Agreement, which meant that the cost of the Investment Project also increased by a multiple of three;

• the interest rates were substantially higher than those agreed in 1995 when the cost of the loan had been estimated at 8.5% to 9.5% p.a., while EBRD's proposal indicated an interest rate of 13%71.

• It was never envisaged that all assets of IAT Pulkovo and the shares in IAT Pulkovo owned by the Parties should he pledged in favour of EBRD, neither the Founders’ Agreement nor the Charter foreshadowed such a pledging which, however, was required by the EBRD proposal;

• Claimant's comment that EBRD's request regarding the pledge, in the sense that "it was commercially reasonable", is of no avail;

• the transfer of the management functions in relation to the International Passenger Terminal to Aeroport de Paris had also not been covered by any provisions in the Founders' Agreement or by the Charter, and this is another requirement to which the Russian Parties could never agree;

• the partial transformation of the pre-development expenses Into a loan has also never been agreed, neither in the Founders’ Agreement nor in the Charter;

• the proposition that Claimant should be owed a development fee in the amount of 4.5% of the Terminal's development costs has also never been agreed;

• the transfer of a 1.5% stock Interest in IAT Pulkovo to EBRD on the financial closing and a further transfer of a 20% stock interest in IAT Pulkovo to DMG upon the financial closing were likewise never agreed and entirely contradicted Section 14.3 of the Founders' Agreement, and Mr Karpov in this respect testified: "The Russian Parties did not even want to hear about redistribution of shares"72;

• Mr Sax himself admitted that he also considered the requested surrender of a 21.5% shareholding as too high, with reference to the Transcript of 18 October 2011, pages 166/167;

• for all these reasons and contradictions of the proposed terms to what had been agreed by the Parties to the Investment Project, Respondents or IAT Pulkovo could not be expected to take such a proposal forward.73

In fact, Respondents maintain, "Claimant has not proved that any agreements in relation to main terms of construction and financing of the Investment Project Were reached between all parties, including the Respondents, and EBRD, DMG."74
In particular, as Mr Karpov explained in his witness statement, the requested transfers of shares in IAT Pulkovo to the financial institutions was a deal-breaker (a "stumbling block"), since the Russian Parties would loose the controlling majority. These terms were incompatible with basic terms of the Founders' Agreement, as laid down in Section 14.3 of the Founders' Agreement, and moreover "commercially unreasonable".75
Respondents further noted that in August 1998 the EBRD's proposal had "expired without a mutual agreement of the participants of the Investment Project and the proposed terms of financing"76 and hence, the Investment Project

"...in any case was factually terminated at the end of 1998 - first half of 1999."

Respondents conclude as follows:

"Bearing all of the aforesaid in mind, it should be noted that the Claimant has not fulfilled its main and sole function under the Founders' Agreement and in the whole Investment project: Obtaining of financing. Furthermore, everything the Claimant managed to Obtain from the financial institution, he ob twined with an enormous delay which was in material contradiction with the Founders' Agreement, and actually ruined the Project."77

In their PH-Brief of 20 January 2012, Respondents once again addressed the issue on pages 21ss, and in detail argued the non-acceptability of the financing proposal in paras. 147 to 188, conducting that - due to Claimant's failure to obtain and present an acceptable financing - Respondents were freed from their obligations under the Founders' Agreement.78

III The Tribunal's Observations and Assessment

(a) Brief References to the Hearings

Claimant acknowledged that the Russian Parties were free to reject or accept any financing commitment, and were free to allow any offer to lapse; however, they were not free to pursue the development of an international passenger terminal at Pulkovo Airport without PSP's participation, unless they first withdraw from IAT Pulkovo in accordance with the terms of Section 8.4 of the Founders' Agreement.
At the Stockholm Hearings, Claimant explained from his side

"why Pulkovo did not close in 1998.... I blame only two people: No 1 the then Governor of the City of St. Petersburg, Vladimir Yakovlev who, quite candidly, for his personal reasons wanted to usurp the Americans' position for fns own personal reasons, and no.2, Governor Valentina Matvienko who Wanted at the time Deripaska's company.... to, again, replace the Americans as the developer of Puikovo-2"79

Regarding the expiry of the 31 December 1995 deadline, Mr Sax acknowledged that It took "a lot longer to deliver the financing commitment than we thought", but stressing that the Russians from time to time extended the deadline, and were kept abreast of the Financing.80
Regarding discrepancies between the Founders' Agreement and the EBRD offered terms, Mr Sax denied these, explaining in detail the commercial reasonableness of the terms offered by EBRD.81 Mr Wong replied:

"Mr Wong: You have a rationale to it and you say It’s commercially reasonable, but I think what I say is that it was not unreasonable for my clients to look at what was in front of them and think: Wow, this Is different. We are talking three times the money, We are talking a reduction in our shareholding and other matters as well. I would invite you to accept that, putting you in the shoes of my client, it Is not unreasonable for them to look at what you proposed and think: This is way off from what wo expected, and ft was not unreasonable for my clients to say: Look, we can’t accept this."

Mr Sax: I think it was, quite candidly, unreasonable, and I think if your clients did not accept it, they had bad advice -- and I'll tell you why; it's very simple EBRD and BAG were two of the premiere financial Institutions in the world in Russia at that time. Forget Cart, Cart Is nobody, PSP is nobody, SP is nobody, but DMG and EBRD are somebody (omissis) They were getting a completed Terminal without putting out any money. They were getting a substantial cash-flow. They were getting the first PPP as a project like this in Russia and/or the world. And what happened"? Okay, they decided not to do It. And if they would have done It, they wouldn't have to wait 15 years or 13 year for the next project."82

Further In the examination, Mr Wong drew the attention to Section 14.3 of the Founders' Agreement, requiring any modifications to be signed off by each of the Founders. Mr Sax's answer to this was that it had been intended that all of the project documents and financing documents would be executed upon Closing, including a new Founders' Agreement, since the

"EBRD's counsel wanted some ridiculous defect cured by incorporating a new company and signing a new Founders’ Agreement.... But the bottom line is that the intervening event, the financial crisis and the delays caused by the Russians, prohibited those changes."83