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TABLE OF ABBREVIATIONS
2001 Hydrocarbons Law Decree with Force of the Organic Hydrocarbons Law, Official Gazette No. 37,323, 13 November 2001
2007 Law on Effects of Migration Law on the Effects of the Process of Migration into Mixed Companies of the Association Agreements of the Orinoco Oil Belt, as well as the Exploration at Risk and Profit Sharing Agreements, Official Gazette No. 38,785, 8 October 2007
2007 Nationalization Decree Decree Having the Rank, Value and Force of Law of Migration to Mixed Companies of the Association Agreements of the Orinoco Oil Belt, as well as the Risk and Profit Sharing Exploration Agreements, Decree No. 5,200, Official Gazette No. 38,632, 26 February 2007
2008 Transfer Decree Decree No. 5,811, transferring to PetroSucre the right to develop primary exploration activities detailed therein, Official Gazette No. 38,851, 16 January 2008
AGIP AGIP Venezuela B.V.
Bicameral Commission Bicameral Commission of Energy and Mines
Bicameral Commission Report Report on Association Agreements for the Exploration at Risk of New Areas and the Production of Hydrocarbons under the Shared Profits System, Bicameral Commission of Energy and Mines, dated June 1995
Claimant or CGP ConocoPhillips Gulf of Paria B.V.
Clause 28.1 Clause 28.1 of the Corocoro AA
COBV Conoco Venezuela B.V.
Congressional Approval Congressional Authorization for the Execution of Association Agreements for Exploration at Risk of New Areas and the Production of Hydrocarbons under the Profit Sharing System in Eight of the New Areas, dated 26 June 1996.
Congressional Authorization Congressional Authorization of the Framework of Conditions for the Exploration at Risk of New Areas and the Production of Hydrocarbons under the Shared Profits System, dated 17 July 1995
Conoco CGP, COBV, CVCA, or Conoco Ltd.
Conoco Ltd. ConocoPhillips Gulf of Paria Ltd.
ConocoPhillips ConocoPhillips Company, Conoco Inc, and/or Phillips Petroleum Company.
Contractual Claims The Non-Performance Claim, Surviving Obligations Claim, Particular Breaches Claim, its Overall Breach Claim, jointly
Control Committee Entity composed of members appointed by both the Investors and CVP to approve certain decisions of national interest to the Venezuelan State as defined in the Corocoro AA and pursuant thereto
Corocoro AA or AA Association Agreement between CVP and COBV, dated 10 July 1996
Corocoro CA or CA Consortium Agreement between CVP and CVCA, AGIP, and OPIC, dated 16 May 2003
Corocoro Contracts The Corocoro AA, the Corocoro Guarantee, and the Corocoro CA, jointly
Corocoro Discovery or Discovery The oil discovery subsequent to drilling activities between September 1998 and April 1999 in a first exploratory well in block 9 (referred to as Corocoro-1X)
Corocoro Guarantee or Guarantee Guarantee of Proper Performance between PDVSA and COBV, dated 10 July 1996
Corocoro Project or Project Project underlying the Corocoro Contracts
CPF Central Processing Facility
CVCA Conoco Venezuela C.A.
CVP-Eni Conversion Contract Contract for the conversion to an empresa mixta between CVP and Eni, 30 November 2007
CVP-Eni MoU Memorandum of Understanding entered into by CVP and Eni for the creation of an empresa mixta, 26 June 2007
DA Discriminatory Action(s) as defined at Section 1.01 of the Petrozuata AA and Article 14.1(b) of the Hamaca AA
Definitive Model AA Definitive Model Association Agreement, dated December 1995
Enabling Law Law Authorizing the President of the Republic to Issue Decrees with Rank, Value and Force of Law on the Matters Delegated Herein, Official Gazette No. 38,617, 1 February 2007
Eni Eni Venezuela B.V. (formerly AGIP)
Force Majeure Clause Clause 28 of the Corocoro AA
FSO Floating Storage and Offloading Unit
GOPWA Gulf of Paria West Area
Government or Venezuela Bolivarian Republic of Venezuela
Hamaca AA Association Agreement between Corpoguanipa, S.A., Arco Orinoco Development Inc., Phillips Petroleum Company Venezuela Ltd., and Texaco Orinoco Resources Company, dated 9 July 1997 (as amended)
Hamaca Guarantee Guarantee Agreement between Petróleos de Venezuela, S.A., Arco Orinoco Development Inc., Phillips Petroleum Company Venezuela Ltd., and Texaco Orinoco Resources Company, dated 9 July 1997 (as amended)
ICC P&H Arbitration ICC Case No. 20549/ASM/JPA (C-20550/ASM)
ICC P&H Arbitration, R-0 ([Exhibit number or submission reference]) Citation to the ICC P&H Arbitration documents, part of the present proceedings as per the Parties' agreement
ICC P&H Claimants ConocoPhillips Petrozuata B.V. and Phillips Petroleum Company Venezuela Limited, collectively
ICC P&H Parties The ICC P&H Claimants and the ICC P&H Respondents, jointly
ICC P&H Respondents Petróleos de Venezuela, S.A., Corpoguanipa, S.A. and PDVSA Petróleo, S.A., collectively
ICC Rules The ICC Rules of Arbitration of 1988
ICSID Arbitration or ICSID Case ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V., ConocoPhillips Gulf of Paria B.V. v Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/30
ICSID Award ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. and ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/30, Award, 8 March 2019
Ineparia Ineparia S.A.
Investors The private entities holding interest in the Project at any point in time, jointly. To wit, Conoco, Eni, OPIC, and Ineparia
IPF Interim Processing Facility
Management Company or Agua Plana Compañía Agua Plana, S.A., the company incorporated on 13 August 1996 to act as Management Company pursuant to the terms of the Corocoro AA.
Model AA Model Association Agreement
Model AA Memorandum Memorandum by PDVSA addressing the various comments raised by private companies with respect to the Model AA, dated 23 November 1995
Non-Performance Claim The Claimant's claim according to which the Respondents ceased performing the Corocoro Contracts from 1 May 2007 onwards
OLAP Organic Law of Administrative Procedures
OLCAJ Organic Law of the Contentious-Administrative Jurisdiction
Operating Agreement Contract concluded between CVP, Conoco, and Agua Plana designating Conoco as the Operator of the Project, dated 13 August 1996
Operator Conoco in its capacity of Operator pursuant to both the Corocoro AA and the Operating Agreement
OPIC OPIC Karimun Corporation
Overall Breach Claim The Non-Performance Claim, the Surviving Obligations Claim, and the Particular Breaches Claim, jointly
P&H Contracts The Petrozuata AA, Hamaca AA, Petrozuata Guaranty, and Hamaca Guarantee, jointly.
Paragraph 1 Paragraph 1 of Article 1 of the 2007 Nationalization Decree
Paragraph 2 Paragraph 2 of Article 1 of the 2007 Nationalization Decree
Particular Breach Claim The Claimant's claim that the Respondents breached certain specific provisions of the Corocoro Contacts in relation to, inter alia, the repayment of the loan extended to CVP, the alleged replacement of the Project's management structure, and the conclusion of the CVP-Eni MoU and the CVP-Eni Conversion Contract
PetroSucre PetroSucre S.A.
Petrozuata AA Association Agreement between Maraven S.A. and Conoco Orinoco Inc., originally dated 10 November 1995, and modified on 18 June 1997
Petrozuata Guaranty Guaranty and Indemnification Agreement between Conoco Orinoco Inc. and Petróleos de Venezuela, S.A., dated 10 November 1995
Respondent 1 or CVP Corporación Venezolana de Petróleos, S.A.
Respondent 2 or PDVSA Petróleos de Venezuela, S.A.
Transcript, p. [page number], ([Party, Witness or Expert making the quoted Statement]) Transcript of the Hearing
Transition Committee The committee created on 5 March 2007 pursuant to Article 2 of the 2007 Nationalization Decree
VCC Venezuelan Civil Code
VCoC Venezuelan Commercial Code
WHP Wellhead Platform

I. INTRODUCTION

A. The Parties and the Tribunal

1. The Claimant

1.
The Claimant is:

CONOCOPHILLIPS GULF OF PARIA B.V. ("CGP")
New Babylon Gardens
Anna van Buerenplein 41
2595 DA Den Haag
The Netherlands

2.
The Claimant is represented in this arbitration by:

Constantine Partasides QC
Lucy Martinez
THREE CROWNS LLP
New Fetter Place
8-10 New Fetter Lane
London EC4A 1AZ
United Kingdom
constantine.partasides@threecrownsllp.com
lucy.martinez@threecrownsllp.com

Jan Paulsson
Luke Sobota
THREE CROWNS LLP
2001 Pennsylvania Avenue, Suite 1100
Washington, D.C. 20006
U.S.A.
jan.paulsson@threecrownsllp.com
luke.sobota@threecrownsllp.com

D. Brian King
Elliot Friedman
Sam Prevatt
Lee Rovinescu
Madeline Snider
FRESHFIELDS BRUCKHAUS DERINGER US LLP
601 Lexington Avenue, 31st Floor New York, NY 10022 U.S.A.
bhan.king@freshfields.com
elliot.fhedman@freshfields.com
sam.prevatt@freshfields.com
lee.rovinescu@freshfields.com
madeline.snider@freshfields.com

Janet Langford Carrig, General Counsel
Laura M. Robertson, Deputy General Counsel, Litigation and Arbitration
Suzana Blades, Associate General Counsel, Commercial Litigation & Arbitration
Fernando Avila, Senior Counsel, E&P Americas
Alberto Ravell, Senior Legal Counsel
CONOCOPHILLIPS COMPANY
600 N. Diary Ashford, ML 1040
Houston, TX 77079
U.S.A.
janet.l.carrig@conocophillips.com
laura.m.robertson@conocophillips.com
suzana.m.blades@conocophillips.com
fernando.a.avila@conocophillips.com
alberto.f.ravell@conocophillips.com

3.
The Claimant's ultimate parent company is ConocoPhillips Company ("ConocoPhillips"),1 and its predecessors-in-interest are Conoco Venezuela B.V. ("COBV") and Conoco Venezuela C.A. ("CVCA"). COBV executed the Association Agreement and the Guarantee of Proper Performance in 1996,2 while CVCA executed the Consortium Agreement in 2003.3 The Association Agreement, the Guarantee of Proper Performance, and the Consortium Agreement, are referred to jointly as the "Corocoro Contracts".
4.
In particular, on 22 December 1999, COBV transferred its interest in the Corocoro Contracts to CVCA, a subsidiary of ConocoPhillips Gulf of Paria Ltd ("Conoco Ltd."). On 15 August 2005, Conoco Ltd. transferred its interest in CVCA to CGP. On 6 September 2012, as part of its liquidation, CVCA transferred its interest in the Corocoro Contracts to CGP. It is not disputed that CGP is party to the Corocoro Contracts.4 For ease of reference, CGP, COBV, CVCA, and Conoco Ltd are referred to as "Conoco".

2. The Respondents

5.
Respondent 1 is:

CORPORACIÓN VENEZOLANA DE PETRÓLEOS, S.A. ("CVP")
Avenida Libertador
Edificio Petróleos de Venezuela
Torre Oeste, Piso 7
Urb. La Campiña
Caracas 1050
Venezuela

6.
Respondent 2 is:

PETRÓLEOS DE VENEZUELA, S.A. ("PDVSA")
Avenida Libertador
Edificio Petróleos de Venezuela
Torre Este, Piso 9
Urbanización La Campiña
Caracas 1050
Venezuela

7.
PDVSA and CPV are collectively referred to as the "Respondents".
8.
The Respondents are represented in this arbitration by:

George Kahale, III
Benard V. Preziosi, Jr
Simon Batifort
Arianna Sánchez
Irene Petrelli
CURTIS, MALLET-PREVOST, COLT & MOSLE LLP
101 Park Avenue
New York, NY, 10178
U.S.A. gkahale@curtis.com
bpreziosi@curtis.com
arianna.sanchez@curtis.com
sbatifort@curtis.com
ipetrlli@curtis.com

9.
On 23 March 2018, the Respondents advised that Respondent 2 would be represented in this arbitration also by the following counsel:

Alfredo De Jesus S.
Alfredo De Jesus O.
Eloisa Falcon Lopez
Marie-Therese Hervella DE JESUS & DE JESUS
20, rue Quentin Bauchart 75008
Paris
France

10.
The Claimant and the Respondents are jointly referred to as the "Parties".

3. The Tribunal

11.
The Tribunal is composed of:

Dr. Laurent Lévy (the President of the Tribunal)
LEVY KAUFMANN-KOHLER
3-5, rue du Conseil-Général
P.O. Box 552
1211 Geneva 4
Switzerland
Tel.: +41 22 809 62 00
Email: laurent.levy@lk-k.com

Prof. Laurent Aynès (arbitrator nominated by the Claimant)
DARROIS VILLEY MAILLOT BROCHIER
69 avenue Victor Hugo
75116 Paris
France
Tel.: +33 145 02 1919
Email: laynes@darroisvilley.com

Prof. Andrea Giardina (arbitrator jointly nominated by the Respondents)
Via Arbia 40
00199 Rome
Italy
Tel.: +39 06 94321773
Email: andrea.giardina@lexinternational.eu

12.
A Secretary to the Tribunal has been appointed by the Tribunal with the consent of the Parties, who have received her CV and her statement of independence. The Secretary is:

Eva Kalnina
LÉVY KAUFMANN-KOHLER
3-5, rue du Conseil-Général
P.O. Box 552
1211 Geneva 4
Switzerland
Tel.: +41 22 809 62 00
Email: eva.kalnina@lk-k.com

B. MAIN FACTS

1. Overview

13.
The below summary gives an overview of the present dispute and its main factual background. It does not include all facts which may be of relevance. Where necessary, the relevant factual aspects will be discussed in the context of the Tribunal's analysis of the issues in dispute.
14.
The present dispute arises from the Respondents' confiscation of the Claimant's interests in a light and medium (also referred to as conventional) crude oil joint venture located in the West of Venezuela's Gulf of Paria (the "Corocoro Project" or "Project"), and from the Respondents' alleged breaches of their contractual undertakings and guarantees in relation to this Project.

2. Historical Context

15.
By way of historical background, the discovery of Venezuela's oil reserves and their extraction by foreign oil companies commenced in and around the 1920s. In light of these developments, Venezuela enacted certain measures, such as the 1943 Hydrocarbons Law, with the alleged objective to provide investors a stable legal framework in order to incentivize investments.5
16.
A policy shift from the late 1950s resulted in Venezuela gradually reverting the oil assets to its own patrimony. Finally, in 1975 Venezuela enacted the 1975 Nationalization Law, pursuant to which all existing oil concessions in favour of foreign oil companies were cancelled and all activities related to the exploration, exploitation, manufacturing, refining and marketing of oil were "reserved to the State".6
17.
The 1975 Nationalization Law also provided for the creation of Petróleos de Venezuela, S.A. ("PDVSA"), a new State-owned and controlled national oil company that would be responsible for the development and management of all oil activities going forward.7 The only limited concession for private participation in the hydrocarbons industry was made in Article 5 of the 1975 Nationalization Law. This provision allowed for the participation of private entities in the oil industry - "[i]n special cases and if convenient for the public interest" - by association agreements between PDVSA and its subsidiaries on the one hand, and private entities on the other, subject to the associations receiving prior authorization from the Venezuelan Congress.8 PDVSA was thus responsible for the exploration and development of Venezuela's oil reserves.9

3. Apertura Petrolera and the Corocoro Contracts

18.
In the 1990s, facing a decline in oil production, foreign oil companies were once again invited to explore and develop Venezuela's oil reserves. This process, promoted by various governmental constituencies, including the Ministry,10 and which provided foreign investors with different financial incentives to allay their concerns, became known in Venezuela as the "Oil Opening" (or "Apertura Petrolera"). The legal basis of the Apertura Petrolera was the above-mentioned Article 5 of the 1975 Nationalization Law.11
19.
In this context, in June 1995 the Bicameral Commission of Energy and Mines ("Bicameral Commission") issued a "Report on Association Agreements for the Exploration at Risk of New Areas and the Production of Hydrocarbons under the Shared Profits System" ("Bicameral Commission Report").12 In its report the Bicameral Commission "examined the convenience" of executing the foregoing association agreements between private entities and PDVSA's subsidiaries and, pursuant to the 1975 Nationalization Law, proposed to the Venezuelan Congress to authorize their execution.13 The Bicameral Commission's proposal was subject to the Venezuelan Congress granting its authorization in "stric[t]"14 observance of the conditions set out in Annex A of the Bicameral Commission Report.15
20.
On 17 July 1995, as required by Article 5 of the 1975 Nationalization Law, the Venezuelan Congress "authorize[d]" the "execution of Association Agreements" between PDVSA's subsidiaries and private entities "for the Exploration at Risk of New Areas and the Production of Hydrocarbons under the Shared Profits System" ("Congressional Authorization").16 This Congressional Authorization, which considered and observed the Bicameral Commission Report's "careful analysis",17 set out the framework of conditions for the conclusion of the Association Agreements with respect to ten New Areas, namely, Guanare, Sombrero, San Carlos, Delta Centro, Punta Pescador West, Guarapiche, La Ceiba, Catatumbo, Gulf of Paria East, and the one comprising the present dispute, Gulf of Paria West.18
21.
The following are the main conditions of the Congressional Authorizations:

i. First Condition :

The National Executive, exercising its legal powers, through the Ministry of Energy and Mines, shall determine the Geographical Areas described in Annex "B" (hereinafter the "Areas") to be granted to a subsidiary of Petróleos de Venezuela, S.A. (hereinafter the "Subsidiary") for the carrying out of exploration and exploitation activities of hydrocarbons fields, transportation via special routes, storage and marketing of the production obtained in the Areas, and all necessary works for the management of these activities, all in accordance with the provisions of the Organic Law that Reserves to the State the Industry and Trade of Hydrocarbons.

ii. Second Condition :

The Subsidiary shall conduct the bidding processes necessary for the selection of the private investment companies with which the Association Agreements shall be entered into for the carrying out of the activities described in the First Condition pursuant to Article 5 of the Organic Law that Reserves to the State the Industry and Trade of Hydrocarbons.

Based on the results of each bidding process, the Subsidiary shall enter into an Association Agreement (hereinafter the "Agreement") with the investment company or companies that succeed in the bidding process (hereinafter the "Investors").

The Investors may bid in all Areas in connection with the activities referred to in the First Condition, but they may only be selected, given the results of the bidding process conducted by the Subsidiary, to enter into an Agreement with a maximum number of five (5) Areas, depending on each investor's classification.

iii. Fourth Condition :

In each Agreement, before commencing the activities under the Agreement, the Parties shall form a committee (hereinafter the "Control Committee") to be composed of an equal number of members appointed by the Investors and the Subsidiaries, and to be presided over by a member appointed by the latter. For the validity of its deliberations and decisions, the presence and consent of the members appointed by the Subsidiary shall be required, with the President having a double vote to resolve ties.

The Parties shall submit fundamental decisions of national interest in connection with the execution of the Agreement to the approval of the Control Committee.

These decisions shall be described in the Agreement and shall include, among others, the approval of the exploration, evaluation and development plans, as well as any other modification to such plans, including the extension of the terms for exploration or exploitation, and the implementation of production reductions in compliance with international obligations of the Republic of Venezuela. For this purpose, the Control Committee shall be informed of all important matters in the life of the Association and all information regarding accounts and receivables shall be presented to the entities designated by the Control Committee in order to allow them to have oversight and audit such information.

iv. Seventeenth Condition :

The Agreement shall be governed by and interpreted under the laws of the Republic of Venezuela.

Matters falling within the power of the Control Committee shall not be subject to arbitration.

Arbitration, conducted in accordance with the procedural rules of the International Chamber of Commerce and in effect at the moment the Agreement is signed, shall be the method used for resolving disputes involving matters that do not fall within the power of the Control Committee and cannot be resolved through agreement of the Parties.

v. Nineteenth Condition:

The Agreement, as well as all activities and operations derived therefrom, shall in no case create liability on the part of the Republic of Venezuela nor diminish its sovereign rights, the exercise of which shall in no case give rise to claims by other States nor foreign powers, regardless of the nature or characteristics of such claims.

vi. Twenty-third Condition :

For the execution of each Agreement, the Subsidiary shall send its final form to the Ministry of Energy and Mines, with the purpose of submitting it, in a period of eight (8) consecutive days, to the consideration of the National Legislative Houses, so that they may proceed to its subsequent authorization, as a priority.

22.
Contemporaneously, and further to the Congressional Authorization's First and Second Conditions, numerous international private entities, including ConocoPhillips, were invited to participate in a bidding process in order to obtain the right to explore and develop the New Areas.19 To that effect, PDVSA/CVP and the companies that qualified for the bidding round started discussing the content of a Model Association Agreement ("Model AA").20
23.
On 23 November 1995, PDVSA issued a memorandum reflecting its position with respect to the different comments raised by the qualified private entities in relation to the Model AA ("Model AA Memorandum"). In light of the need to "ensure that the [possible] modifications [to the Model AA were] consistent with the legal regime under which 1995 Exploration Bidding Round [was] concluded", the Model AA Memorandum focused on "substantive modifications" to the Model AA prompted by the potential bidders' views.21
24.
Significantly, the Model AA Memorandum:

i. Recognized the need for the Model AA to "acknowledge the applicability" of Article 1160 of the Venezuelan Civil Code ("VCC") providing for "all contracts to be carried out in good faith", as well as of "international investment treaties to which Venezuela is a party". Regarding Article 1160 of the VCC, the Model AA Memorandum stated that its application would allow the AA parties "to demand a good faith renegotiation of the terms of the contract if as a result of an unforeseen change in circumstances there is a substantial adverse impact on the economic benefits intended to be provided to such party under the contract". With respect to international investment protection via treaties, the Model AA Memorandum clarified that such instruments would protect "investors from the relevant countries against adverse effects from discriminatory changes in Venezuelan law".22

ii. Stated that the Model AA would "be revised to make it clear that an act of the Venezuelan government that is not of general applicability will not be a defense to a claim against CVP for breach of contract if it fails to perform an obligation under the Association Agreement, even if its failure is attributable to the governmental act".23

25.
After the various changes addressed in the Model AA Memorandum were incorporated into the Model AA, in December 1995 PDVSA (on behalf of CVP) issued the definitive version of the Model AA applicable to the "qualified companies […] eligible to submit bids for the ten Areas being offered in the bidding round" ("Definitive Model AA").24 PDVSA clarified that the "[w]inning bidders [would] be required to execute the [Definitive Model AA] without modification, except as to ministerial details […] and corrections of typographical or translation errors".25
26.
Against this backdrop, after bidding on several blocks within the New Areas, Conoco prevailed with respect to the Gulf of Paria West area.26 Subsequently, in June 1996, and pursuant to the Twenty-third Condition of the Congressional Authorization,27 the Venezuelan Congress "authorize[d] the execution of [an] Association Agreement" between CVP and Conoco for the "Exploration at Risk [and] the Production of Hydrocarbons […]" in the Gulf of Paria West area ("Congressional Approval").28
27.
Accordingly, on 10 July 1996, Conoco and CVP entered into an Association Agreement for the "exploration, discovery, evaluation, development and exploitation of commercial hydrocarbon reservoirs within [Gulf of Paria West]" ("Corocoro AA" or "AA").29 The Corocoro AA granted Conoco (or any of its successors, assignees, or other private entities holding interest in the Project, together the "Investors")30 the right to explore a number of blocks within the Gulf of Paria West area for a determined duration. The Investors could further obtain exploitation rights for specific blocks in case of an approved commercially viable oil discovery. In that event, CVP would have the option to participate with up to 35% interest in a consortium agreement with the Investors for the exploitation of the oil discovery;31 a participation that would proportionally dilute the Investors' interest in the Projects.
28.
On the same day, Conoco and PDVSA executed a Guarantee of Proper Performance ("Corocoro Guarantee" or "Guarantee") whereby PDVSA "unconditionally and irrevocably" guaranteed the "due and punctual performance" of "all obligations of CVP" under: (i) the Corocoro AA; and (ii) consortium agreements to be concluded between CVP and the Investors pursuant to the AA.32
29.
Notably, at the time of the execution of both the AA and the Guarantee, Conoco held a 100% interest in the Project. However, Conoco later assigned portions of its interest to OPIC Karimun Corporation ("OPIC") and Eni Venezuela B.V. ("Eni", formerly AGIP Venezuela B.V.). Indeed, from mid-1998 until 2003,33 the Project's interests were split as follows: 50% for Conoco, 40% for Eni, and 10% for OPIC.34
30.
The Project's exploration and exploitation activities were to be managed and conducted through the following contractually instituted organs:

i. Management Company : The Management Company was in charge of "direct[ing], coordinat[ing] and supervis[ing] the activities […] object of the [Corocoro AA]" while "ensuring an optimal level of commercial production" by "applying […] the standards established in applicable legislation and, to the extent consistent therewith, the technical and commercial criteria commonly employed by the international oil industry".35 To that effect, Agua Plana S.A. ("Management Company" or "Agua Plana") was incorporated in August 2016, with the Investors holding a 65% interest and CVP a 35% interest, and its Board of Directors being composed of three appointees representing the Investors and two representing CVP.36

ii. Control Committee : The Control Committee was responsible for "approv[ing]" certain "decisions of national interest to the Venezuelan State related to the performance of the [Corocoro AA]",37 and consisted of four principal members, half of which were appointed by the Investors and the remaining two (including the Chair) by CVP.38

iii. One or several Development Committees : A Development Committee (appointed by the Management Company's Board "at or prior" to the execution of any consortium agreement necessary following an oil discovery), was to "direct, coordinate, and supervise" the "commercial aspects of the activities" object "of the Corocoro AA" in respect of the discovery's development area.39

iv. Operator : The Operator was responsible for the "day-to-day activities in the exploration, development and operation" of the Project, under the supervision of the Management Company, and in compliance with the decisions of the Control Committee, the Management Company's Board, and each relevant Development Committee.40 Conoco was designated as Operator from the very outset through the conclusion of an operating agreement between CVP, Conoco, and Agua Plana ("Operating Agreement").41 As a result, Conoco was entitled "at all times" until its resignation or removal pursuant to the Operating Agreement, to "maintain" an interest in the Project of "at least 30%".42

31.
Acting within this contractual framework, Conoco commenced exploration of the Gulf of Paria West Area ("GOPWA") and its area of approximately 1,135.81 km2, which was divided into 9 blocks.43 This initial exploration period took place between the years 1996 and 2000,44 and required the performance of various activities (including extensive seismic testing) throughout the GOPWA at Conoco's "own cost and risk",45 and during which OPIC and Eni joined as Investors.46
32.
Between September 1998 and April 1999, a first exploratory well in block 9 (referred to as Corocoro-1X) was drilled, discovering the Corocoro field ("Corocoro Discovery or Discovery").47 Pursuant to the Corocoro AA,48 an Evaluation Plan was submitted in July 1999 and approved by the Management Company in December 2000.49 Thereafter, a comprehensive appraisal program was conducted between July 2001 and March 2002, where the Investors drilled a series of additional exploratory wells within the Corocoro field.50 Given the promising results thereof, on 22 October 2002 the Investors issued a declaration of commerciality with respect to the Discovery.51
33.
Consequently, on 1 November 2002, the Investors submitted a Development Plan for the Control Committee's approval,52 which was granted on 8 April 2003.53 Upon said approval, the Investors gained entitlement to an Operation Period of 20 years (i.e. through 2025)54 which, subject to the Control Committee's further approval, could be extended, at most, "for an additional term not to exceed the remainder of the 39-year term of the [Corocoro AA]" (i.e. through 2035).55
34.
Irrespective of the eventual amendment of some of the Development Plan's specifics (the Parties disagree as to the reasons why the amendment was necessary),56 it is non-controversial that the Development Plan was broadly divided into two phases. Phase I focused on the eastern part of the Corocoro field, and envisaged the construction of a Wellhead Platfom ("WPH") for crude extraction, an Interim Processing Facility ("IPF") and a subsequent Central Processing Facility ("CPF") for production purposes, a Floating Storage and Offloading Unit ("FSO") to store the oil produced from either the IPF or the CPF, and the corresponding pipelines (one for water injection and another one for transporting the produced oil to the FSO). In turn, Phase II was to focus on the western part of the Corocoro field and would use the "existing production facilities" of Phase I. Phase II would thus be implemented in "parallel" to Phase I, subject to the viability of further development investments, and be "conditional on the [initial] results of Phase I".57
35.
On 10 April 2003 (i.e. two days after the Development Plan's initial approval),58 CVP exercised its option to acquire a 35% interest in the Discovery,59 with the purchase price loaned to CVP by the Investors in accordance with the terms of the Corocoro AA.60
36.
On 16 May 2003, as required by the Corocoro AA,61 the Investors and CVP entered into a Consortium Agreement ("Corocoro CA" or "CA") in order to "govern their relationship" during the development of the Project.62 The Corocoro CA was to "serve as a vehicle for financial investments" with respect to the development area and for the "sharing" of both production and joint revenues from such development area.63
37.
As expected, CVP's decision to partake in the exploitation and development stages proportionally reduced the Investors' overall interests in the Project.64 Indeed, at the time the CA was executed, the interests in relation to the Corocoro Discovery were split as follows: 35% for CVP, 32.5% for Conoco, 25% for Eni, and 6.5% for OPIC.65 These percentages would vary just slightly for Conoco, Eni and OPIC due to Ineparia S.A. ("Ineparia") joining as an Investor in September 2003.66

4. The Nationalization of the Corocoro Project

38.
The Corocoro CA was concluded amidst rising political tension in Venezuela. Shortly after Hugo Chávez's election as President in December of 1998, he immediately expressed his dislike for the Apertura Petrolera. Indeed, it became one of President Chávez's main goals to reform the oil industry by securing its underlying resource for the benefit of the Venezuelan people.
39.
As a first step towards that direction, President Chávez enacted the 2001 Hydrocarbons Law, a piece of legislation that made certain changes to the regime that had previously existed under the 1943 Hydrocarbons Law and the 1975 Nationalization Law.67 Under the 2001 Hydrocarbons Law, production activities were reserved to the State, and private parties would only be authorized to participate in those activities through empresas mixtas (mixed enterprises) in which the State owned more than 50% of the shares.68 This law provided the substratum on which several further legislative measures were passed in later years, some of which are germane to the present dispute.
40.
Opposition to this and other proposed reforms lead to a political strife, including a failed coup d'état against President Chávez in April 2002 and a PDVSA strike in December 2002,69 which was brought to an end in February 2003 with the removal of over 18,000 PDVSA employees (about 1/3rd of PDVSA's workforce).
41.
Moreover, in 2004, President Chávez appointed Mr. Rafael Ramírez as both the President of PDVSA and Minister of Energy and Mines. To achieve this dual appointment, the Articles of Incorporation and By-laws of PDVSA were amended by a Presidential Decree.70
42.
Following his reelection in 2006, on 8 January 2007 President Chávez announced the nationalization of various economic sectors, including oil, and proclaimed that he would be seeking the National Assembly's authority to issue Decree-Laws to that effect.71
43.
Shortly thereafter, in February 2007, the National Assembly promulgated the Law Authorizing the President of the Republic to Issue Decrees Having Rank, Value, and Force of Law on the Matters Delegated therein ("Enabling Law"), which vested President Chávez with the power to legislate by decree for 18 months with respect to 11 different areas, including the energy sector and the oil industry.72 In particular, the Enabling Law stated:

The President of the Republic is authorized in Council of Ministers to issue Decrees with Rank, Effect and Force of Law, in accordance with the guidelines, purposes and framework of the matters delegated under this Law, in accordance with the last part of Article 203 and section 8 of Article 236 of the Constitution of the Bolivarian Republic of Venezuela, and therefore: […]

To issue norms allowing the State to assume directly or through wholly owned companies, the control of the activities performed by the associations operating in the Orinoco Oil Belt, including the upgraders and the associations for exploration at risk and shared profits, to regularize and adjust their activities within the legal framework that governs the national oil industry [(i.e. the 2001 Hydrocarbons Law)], through the contractual form of mixed enterprises or wholly-owned companies of the State.73

44.
On the basis of the Enabling Law, the Government further adopted a series of measures eventually culminating in the nationalization of the Claimant's investment in the Corocoro Project and the extinguishment of the Corocoro AA. These measures are discussed in more detail infra.74
45.
On 26 February 2007, the Government enacted Decree No. 5,200, a decree with the rank, value and force of law ("2007 Nationalization Decree").75 This Decree, which specifically referred to, inter alia, the Corocoro Project: (i) declared that all "existing associations between the subsidiaries of [PDVSA] and the private sector operating in the [New Areas]" were also to be "adjusted" to the legal framework governing the Venezuelan oil industry (in accordance with the terms set forth in the 2001 Hydrocarbons Law);76 and (ii) required their migration to empresas mixtas that were at least 60% owned by PDVSA or any other affiliate designated by PDVSA.77
46.
The 2007 Nationalization Decree further provided that the nationalization would take place in accordance with the following procedure:

ARTICLE 4. The private sector companies that are currently parties to [association agreements], shall be granted a period of four (4) months as of the date of publication of this Decree-Law [i.e. until 26 June 2007], to agree on the terms and conditions of their possible participation in the new [empresas mixtas]. […]

ARTICLE 5. Once the term established in Article 4 of this Decree-Law has expired, and if no agreement has been reached on the incorporation and operation of the [empresas mixta s], the Republic, through [PDVSA] or any of its subsidiaries designated for that purpose, shall directly assume the activities carried out by the associations […] for the purpose of preserving their continuity, in light of their public utility and social interest character.78

47.
Moreover, the 2007 Nationalization Decree called for the creation of a "Transitio[n] Commi[ttee]" for each of the concerned association agreements, which would be "incorporated to the current board of directors of the respective association", in order to "guarantee the transfer of control" of the various projects to the (forthcoming) empresas mixtas.79 According to the 2007 Nationalization Decree, this "transfer process" was to be "completed" by 30 April 2007, and the "private sector companies" were required to "cooperate with [PDVSA]" for the purposes of "conduct[ing] a safe and orderly change of operator".80
48.
To that effect, on 5 March 2007, PDVSA (on CVP's behalf) informed the investors of the creation of the Transition Committee for the Corocoro Project and of the appointment of Messrs. Alexis Lizardo, Cesar Ramírez and Leonardo Marcano thereto.81 A few days after, on 13 March 2007, Conoco appointed Messrs. Gustavo Hernández and Patrick Wolfe to act on its behalf.82
49.
Pursuant to the deadlines set out in the 2007 Nationalization Decree:83

i. On 1 May 2007, PDVSA assumed full operational control over the Corocoro Project;84 and

ii. On 26 June 2007 (given Conoco's and OPIC's inability to reach a consensus with PDVSA and CVP with respect to the migration of the Corocoro Project), Eni entered into a Memorandum of Understanding with CVP (namely, PDVSA Petróleo S.A.), providing for the formation of an empresa mixta upon the National Assembly's approval in order to assume the operations of the Corocoro Project ("CVP-Eni MoU").85 Further, in line with Article 5 of the 2007 Nationalization Decree, CVP and PDVSA henceforth "directly assume[d] the activities carried out" further to the Corocoro AA.86

50.
On 8 October 2007, the National Assembly enacted the Law on the Effects of the Process of Migration into Mixed Companies of the Association Agreements of the Orinoco Oil Belt, as well as the Exploration at Risk and Profit Sharing Agreements ("2007 Law on Effects of Migration"). The 2007 Law on Effects of Migration purported to "extinguish" the association agreements with respect to which a migration agreement could not be concluded, and to formally transfer the privately held interests in the various projects at issue to the (newly created) empresas mixtas, as follows:

ARTICLE 1. The [association agreements subject of the 2007 Nationalization Decree] shall be extinguished as of the date of publication in the Official Gazette of the Bolivarian Republic of Venezuela of the Decree that transfers the right to exercise primary activities to the [empresas mixtas] that have been incorporated in accordance to the established in such Law-Decree.

Likewise those agreements in which none of the private parties that were part in the corresponding associations have reached an agreement for the migration to [empresas mixtas] within the term established in Article 4 of the [2007 Nationalization Decree] will also be extinguished as of the moment of the publication of this Law in the Official Gazette of the Bolivarian Republic of Venezuela

ARTICLE 2. The interests, shares, and participations in the associations [subject of the 2007 Nationalization Decree], in the companies incorporated to develop the corresponding projects, and in the assets used for the development of the activities of such associations, including rights of property, contractual rights, and those of other nature, that corresponded to the companies of the private sector with which no agreement for the migration to mixed companies was reached until the term established in Article 4 of the [2007 Nationalization Decree] expired, are hereby transferred, based in the reversion principle, without requiring additional actions or instruments, to the new [empresas mixtas] constituted as result of the migration of the respective associations, except for the established in Article 3 of this Law.

ARTICLE 3. In the cases in which none of the companies that constituted the private part of the Association Agreement would have reached an agreement for the migration to [an empresa mixta] within the term established in Article 4 of the [2007 Nationalization Decree], the interests, shares, participations and rights, to which Article 2 of this Law makes reference shall remain property of the subsidiary of [PDVSA] that assumed the activities of the corresponding association until the National Executive determines the subsidiary that shall assume such activities definitively.87

51.
On 29 October 2007, as envisaged in the CVP-Eni MoU and considered in Article 2 of the 2007 Law on Effects of Migration,88 the National Assembly "approve[d] the creation of an [empresa mixta] between [CVP] and Eni […], or their respective affiliates, with an initial shareholding of seventy-four percent (74%) and twenty-six percent (26%), respectively".89
52.
To that effect, on 30 November 2007, CVP and Eni concluded a contract concerning the incorporation of PetroSucre S.A. ("PetroSucre"), an empresa mixta, whose shareholding would be split pursuant to the National Assembly's approval (i.e. 76% for CVP and 24% for Eni), and whose purpose would be to develop and conduct all primary activities within, essentially, the GOPWA ("CVP-Eni Conversion Contract").90
53.
On 16 January 2008, President Chávez issued Decree No. 5,811 ("2008 Transfer Decree"). This decree transferred to PetroSucre the "right to develop primary exploration activities in search of hydrocarbon deposits, extraction in their natural state, collection, transportation and initial storage", within de GOPWA, for a period of 25 years.91 Consequently, pursuant to Article 1 of the Law on 2007 Effects of Migration, the Corocoro AA was "extinguished".92
54.
According to the Claimant, the foregoing facts attract the Respondents' civil liability under Venezuelan law, a contention that the Respondents oppose.93

C. OVERVIEW OF THE PARTIES' POSITIONS

55.
In this section, the Tribunal provides a brief overview of the Parties' positions and main heads of claims and defenses. As such, it is by no means exhaustive. A detailed account of the Parties' positions with respect to each issue in dispute is set out in the analysis' section below.94

1. The Claimant's Position

56.
The Claimant raises both contractual and non-contractual claims in this arbitration.
57.
With respect to the Contractual Claims, the Claimant's case is three-fold:

i. First, the Claimant submits that the Respondents fully failed to perform the Corocoro Contracts from 1 May 2007 onwards. The Tribunal refers to this claim as the "Non-Performance Claim".95

ii. Second, the Claimant submits that the Respondents also committed so-called "positive breaches" of the Corocoro Contracts,96 which are divided into two main lines of argument:

a) First, the Claimant argues that the Respondents breached contractual obligations which, in the Claimant's view, were specifically designed to survive the termination of the Corocoro AA. In particular, the Claimant argues that by not performing the Corocoro Contracts and instead carrying on with the development the Corocoro Project through PetroSucre, the Respondents contravened the explicit mandate in the Corocoro AA, which vested upon the Claimant the continuous right (until expiration of the 39-year contractual term of the Corocoro AA) to develop and share the production and revenue of the Corocoro Discovery. The Tribunal refers to this claim as the "Surviving Obligations Claim".97

b) Second, the Claimant alleges that the Respondents failed to pay the loan which was extended to CVP for the acquisition of its 35% interest in the Corocoro Discovery, relieved the Claimant as Operator, unlawfully replaced the management structure governing the Corocoro Project, and executed the CVP-Eni MoU and the CVP-Eni Conversion Contract while the Corocoro Contracts were still in force, thereby disclaiming all of their obligations under the Corocoro Contracts. The Tribunal refers to these submissions, cumulatively, as the "Particular Breaches Claim".98

iii. Third, the Claimant submits that, contrary to the Tribunal's findings in ICC Case No. 20549/ASM/JPA (C-20550/ASM) ("ICC P&H Arbitration"), the Respondents in the present case cannot invoke or otherwise rely on the implementation or compliance with the 2007 Nationalization Decree to escape liability for the above breaches. Pursuant to the Tribunal's findings in the ICC P&H Arbitration, the Claimant no longer disputes that the 2007 Nationalization Decree is an extraneous and non-attributable governmental act to the Respondents.99 Therefore, any breach of the Corocoro Contracts caused by the 2007 Nationalization Decree in principle constitutes a causa extraña precluding the Respondents' liability under general Venezuelan contract law. However, the Claimant submits that, through Clause 28.1 of the Corocoro AA, the Respondents assumed the risk for any damages caused to the Investors by state acts "not of general applicability", such as the 2007 Nationalization Decree.100

58.
With respect to the non-contractual claims, which are raised in the alternative, the Claimant argues that: (i) the Respondents' conduct constitutes an indemnifiable hecho ilícito under Venezuelan law;101 and (ii) the Respondents have been unjustly enriched by the confiscation of the Claimant's assets and interests in the Corocoro Project.102

2. The Respondents' Position

59.
At the outset, the Respondents submit that, to the extent that the present dispute concerns fundamental decisions of the Venezuelan State, it exceeds the scope of both the arbitration agreement in Clause 25.2 of the Corocoro AA and the Congressional Authorization's Fourth Condition.103 Consequently, they argue that the Claimant's claims are not arbitrable.104
60.
Moreover, the Respondents note that the Claimant has waited ten years after the 2007 Nationalization Decree to file its claims, and allege that the Claimant never disclosed that it considered them to be in breach of any contractual obligation or otherwise liable under the hecho ilícito and unjust enrichment doctrines. In this regard, the Respondents argue that the Claimant's conduct denotes a "disloyal delay" which warrants the dismissal of the adduced claims on that basis alone.105
61.
As to the merits of the Claimant's claims, the Respondents submit that no breach of the Corocoro Contracts can arise as the Claimant ceased to have any rights in the Corocoro Project by virtue of a law of public policy, namely, the 2007 Nationalization Decree.106 In the alternative, the Respondents argue that, even if the Respondents were considered debtors under the Corocoro Contracts notwithstanding the expropriation of the Claimant's contractual rights and assets in the Corocoro Project, any alleged breach of the Corocoro Contracts would be excused under Clause 28.1 of the Corocoro AA, which precludes liability for any breaches caused by state acts of "general applicability", such as the 2007 Nationalization Decree.107

D. ARBITRATION AGREEMENT

62.
The jurisdiction of the Tribunal is based on the arbitration agreements contained in the Corocoro AA and the Guarantee, and their incorporation by reference in the CA.
63.
Clause 25.2(a) of the Corocoro AA provides as follows:

Any dispute arising out of or concerning this Agreement regarding matters not within the competence of the Control Committee [(established in Clause IV of the AA)] shall be settled exclusively and finally by arbitration. The arbitration shall be conducted and finally settled by three (3) arbitrators (except as described below) in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce as in effect on the date of this Agreement (the "ICC Rules"), or such other rules as may be agreed by all of the Parties involved. If CVP is a party to the relevant dispute, CVP shall select an arbitrator and the other party or parties thereto shall collectively select an arbitrator in accordance with the ICC Rules. If CVP is not a party to the relevant dispute, and there are only two such parties, each such party shall select and arbitrator in accordance with the ICC Rules. In either such case, the arbitrators so nominated shall then agree within (30) days on a third arbitrator to serve as Chairman. Notwithstanding the foregoing, disputes submitted to arbitration pursuant to Clause 12.5, 22.9 or 23.4 [relating to the transfer or termination of "Block and Development Areas"] shall be resolved by a single arbitrator. All arbitration proceedings under this Agreement shall be conducted in New York City (United States of America). All arbitrators appointed pursuant to this Agreement shall have the powers of an amiable compositeur. Any decision or award of the tribunal (or the arbitrator) shall be final and binding upon the Parties. Judgment for execution of any award rendered by the arbitral tribunal (or the arbitrator) may be entered by any court of competent jurisdiction without review of the merits of such award. To the extent permitted by law, any rights to appeal from or to cause a review of any such award by any court or tribunal are hereby waived by the Parties.

64.
Section 11 of the Corocoro Guarantee provides as follows:

Any dispute concerning the legal interpretation or construction of this Guarantee shall be settled exclusively and finally by arbitration. The arbitration shall be conducted in accordance with the ICC Rules. The Investors [i.e., Claimant] shall collectively select an arbitrator and the Guarantor [PDVSA] shall select an arbitrator in accordance with the ICC Rules. The arbitrators so nominated shall then agree within 30 days on a third arbitrator to serve as Chairman. The arbitration shall be conducted in New York City (United States of America). Notwithstanding the foregoing, in the event that a dispute involves both the Guarantor [PDVSA] and CVP, arbitration shall be conducted in accordance with Clause 25.2 of the [Association] Agreement, as a single proceeding, and Guarantor and CVP shall jointly have the rights of CVP under such Clause 25.2.

65.
Section X of the Corocoro CA provides as follows:

Any dispute between the Members of the Consortium regarding this Agreement shall be resolved pursuant to the procedures set forth in Article 25.2 of the Partnership [Association] Agreement.

66.
The Respondents' objections to the Tribunal's jurisdiction on the grounds of the alleged non-arbitrability of the Contractual Claims are addressed in Section III.A.1 below.

E. PLACE OF ARBITRATION AND LANGUAGE OF THE PROCEEDINGS

67.
Pursuant to Clause 25.2(a) of the Corocoro AA, Section 11 of the Guarantee, and Section X of the CA referring to Clause 25.2 of the AA, the place of arbitration is New York City, New York (U.S.A.).
68.
The ToR provides that all proceedings shall take place in New York unless the Parties agree otherwise, or the Tribunal decides otherwise upon request of one of the Parties or on its own motion by showing of good cause.108
69.
On 13 February 2018, the Parties agreed on Washington DC as the "physical venue of the hearing". The Parties have further agreed that the language of the arbitration shall be English.

F. APPLICABLE LAW

1. Applicable substantive law

70.
Clause 25.1 of the Corocoro AA, Section 8 of the Guarantee, and Section IX of the CA, all provide that each instrument shall be governed by and construed or interpreted in accordance with the laws of Venezuela. The applicable substantive law is thus Venezuelan law.
71.
Moreover, Clause 25.5 of the Corocoro AA provides that, "[w]ithout limiting the generality of Clause 25.1 [governing law], the Parties hereby acknowledge the applicability of Article 1160 of the Venezuelan Civil Code to this Agreement, and that accordingly all obligations hereunder shall be performed in good faith, and in accordance with equity, custom and law. The Parties also acknowledge the applicability of any international treaties relating to the mutual protection of foreign investment to which Venezuela and any country of which an Investor is a national may now be or hereafter become parties".109
72.
Notwithstanding the foregoing, Clause 25.2(a) of the Corocoro AA states that "all arbitrators appointed pursuant to this [AA] shall have the powers of an amiable compositeu r". The Parties dispute the extent to which the Tribunal may rely on its powers to act as amiable compositeur to resolve the present dispute. The Tribunal addresses this issue in more detail in Section III.A.2 below.

2. Applicable procedural rules

73.
This arbitration is governed by (in the following order of precedence):110

a) The mandatory rules of the law on international arbitration applicable at the place of the arbitration;

b) The ICC Rules of Arbitration of 1988 ("ICC Rules");

c) The ToR and the procedural rules issued by the Tribunal, as reflected in Procedural Order No. 1 ("PO1"), and any amendments thereof.

74.
If the provisions therein do not address a specific procedural issue, the applicable procedural issue is to be determined by agreement between the Parties or, in the absence of such agreement, by the Tribunal.111
75.
Further, in accordance with Section 10 of PO1, the Tribunal may also seek guidance from, but is not bound by, the IBA Rules on the Taking of Evidence in International Arbitration 2010.

G. PROCEDURAL HISTORY

1. Initiation of the Arbitration

76.
On 30 December 2016, the Claimant submitted the Requests for Arbitration ("Request") against the Respondents.
77.
On 1 March 2017, the Respondents submitted their Answer ("Answer").
78.
The co-arbitrators nominated by the Parties were confirmed on 29 March 2017 by the ICC Court:

• Laurent Aynès, as co-arbitrator upon the Claimant's joint nomination.

• Andrea Giardina, as co-arbitrator upon the Respondents' joint nomination.

79.
On 24 May 2017, the ICC Court confirmed Dr. Laurent Lévy as President of the Tribunal upon the joint nomination of the co-arbitrators.
80.
On 2 June 2017, the President of the Tribunal confirmed to the Parties that the Tribunal was duly constituted, and invited them to indicate their availability for a first procedural session and preference as to its format.
81.
On 15 June 2017, the President of the Tribunal circulated for the Parties' comments the draft Terms of Reference ("ToR") and a draft PO1. He also requested them to, if possible, seek a joint Procedural Timetable. The President further informed the Parties of the Tribunal's intention to appoint Ms. Eva Kalnina as the Secretary of the Tribunal and indicated the scope of her duties in this capacity.
82.
On 20 June 2017, the Parties agreed to hold a first procedural meeting by telephone conference and gave their respective availabilities. They also consented to the Tribunal's proposal to appoint Ms. Eva Kalnina as the Secretary of the Tribunal.
83.
On 26 June 2017, the Claimant and the Respondents provided their observations and comments on the draft ToR and PO1.
84.
In their respective communications of 27 and 28 June 2017, the Parties informed the Tribunal that they were not able to agree on a joint Procedural Timetable.
85.
On 5 July 2017, the President of the Tribunal informed the Parties that the first procedural session would take place by telephone on 13 July 2017 at 4:30 pm CET. The President attached to his message the final PO1 and the draft ToR incorporating the Parties' comments.
86.
On 11 July 2017, before the first procedural session, the Claimant provided further comments on the ToR.
87.
On 13 July 2017, the first procedural session took place as announced and the following participated:

• For the Claimant: (i) Mr. Constantine Partasides, Ms. Lucy Martinez, and Mr. Luke Sobota, from Three Crowns; (ii) Mr. Elliot Friedman, from Freshfields Bruckhaus Deringer; and (iii) Mr. Alberto Ravell, from ConocoPhillips Company.

• For the Respondents: George Kahale, III, Benard V. Preziosi, Jr., Arianna Sánchez Galindo, Simon Batifort, and Irene Petrelli, from Curtis, Mallet-Prevost, Colt & Mosle.

• For Worldwide Reporting (providing the agreed transcript): Mr. David Kasdan, Mr. Randy Salzman, and Ms. Kate Peregoy.

88.
On 20 July 2017, the President of the Tribunal sent to the Parties and to the coarbitrators the finalized ToR and Procedural Timetable, asking them to return nine copies of the signed signature page to the ICC Secretariat. The President also reminded the Parties of the agreement to make "part of the present proceedings" the entire case file pertaining to the ICC P&H Arbitration.
89.
On 27 July 2017, the ToR were executed by all signatories.

2. The Written and Pre-Hearing phases

90.
Through communications of 24 and 25 July 2017, the Parties confirmed their agreement that the Statement of Claim ("SoC") and the Statement of Defense ("SoD") be filed only with the ICC and kept under seal by the ICC until the delivery of the final award in the ICC P&H Arbitration. This agreement, endorsed by the Tribunal, was acknowledged by the ICC Secretariat on 3 August 2017.
91.
On 13 October 2017, the Claimant filed the SoC along with accompanying exhibits, witness statements, expert reports and legal authorities.
92.
On 12 January 2018, the Respondents filed their SoD, along with accompanying exhibits, witness statements, expert reports and legal authorities.
93.
On 2 February 2018, both Parties filed their Requests for Document Production.
94.
On 13 February 2018, the Claimant informed the Tribunal that the Parties had agreed for the hearing to be held in Washington D.C. They also agreed to postpone the date for the objections to requests for document production and the voluntary production of documents to 21 March 2018. Unable to reach an agreement for the adjustment of the rest of the Procedural Timetable, both parties agreed to submit their respective proposals to the Tribunal.
95.
On 9 March 2018, the Tribunal sent the final draft award in the ICC P&H Arbitration to the ICC for scrutiny.
96.
On 12 and 22 March 2018, the Parties agreed to the remainder of the Procedural Timetable.
97.
On 21 March 2018, both Parties filed their Responses to each other's requests for document production.
98.
On 23 March 2018, the Tribunal invited the Parties to hold the Pre-Hearing Telephone Conference ("PHTC") on 1 October 2018 at 4:30pm CET.
99.
On 27 March 2018, the ICC Secretariat acknowledged that Respondent 2 would also be represented by Alfredo De Jesús S., Alfredo De Jesús O., Eloisa Falcón López and Marie-Thérèse Hervella from DE JESÚS & DE JESÚS, in Paris (France).
100.
On 28 March 2018, the Parties confirmed their availability to hold the PHTC on 1 October 2018, at 4:30 CET.
101.
On 19 April 2018, the Tribunal confirmed the scheduled PHTC and informed the Parties that the final award in the ICC P&H Arbitration was likely to be notified on or around 25 April 2018. The ICC would forward the submissions relating to these proceedings as soon as the electronic version of the final award had been received.
102.
On 25 April 2018, Tribunal handed down the final award in the ICC P&H Arbitration.
103.
On the same day: (i) The ICC Secretariat forwarded the SoC and SoD (with accompanying materials) to each member of the Tribunal; and (ii) the Respondents submitted their replies to the Claimant's response to the Respondents' requests for document production. The Claimant also wrote to the Tribunal regarding the early production of a requested document.
104.
On 7 May 2018, the Tribunal issued Procedural Order No. 2 ("PO2"), setting out its decision on the Parties' requests for production of documents.
105.
On 31 May 2018, the Respondents alleged that over half of the documents produced by the Claimant were virtually entirely redacted. According to the Respondents, none of these documents were included in the Claimant's privilege log and the Claimant had not raised any objection to their production. Further, the Respondents claimed that the format of several documents was changed before being produced (from native excel files to PDF). They also questioned the inclusion of certain documents in the Claimant's privilege log.
106.
On 8 June 2018, the Claimant filed its Reply, along with accompanying witness statements, expert reports, exhibits and legal authorities ("Reply").
107.
On 13 June 2018, the Claimant answered the Respondents' allegations of 31 May 2018. The Respondents replied on 15 June 2018, and the Claimant further commented on 20 June 2018.
108.
On 29 June 2018, the Tribunal issued its decision regarding the Parties' outstanding issues on document production.
109.
On 14 September 2018, the Respondents filed their Rejoinder, along with accompanying witness statements, expert reports, exhibits and legal authorities ("Rejoinder").
110.
On 21 September 2018, the Parties exchanged notices identifying the witnesses and experts to be cross-examined in the upcoming evidentiary hearing.
111.
On 2 October 2018, the Claimant submitted additional legal authorities.
112.
On 5 October 2018, the Respondents submitted an updated version of Mr. Jésus Patiño's expert report (both in English and in Spanish).
113.
On 15 October 2018, following a Pre-Hearing Telephone Conference held on 1 October 2018 ("PHTC"), the Tribunal issued Procedural Order No. 3 ("PO3"), which contained its decisions and instructions on various issues relevant to the upcoming hearing, as well as an indicative hearing timetable agreed between the Parties and endorsed by the Tribunal.

3. The Oral phase

114.
The evidentiary hearing was held at the ICSID facilities in Washington D.C. from 29 October 2018 to 2 November 2018 ("Hearing"). In addition to the members of the Tribunal and the Secretary, the following persons attended the Hearing:

i. For the Claimant:

THREE CROWNS LLP

o Mr. Constantine Partasides QC
o Mr. Luke Sobota
o Mr. Benjamin Jones
o Mr. Mihir Chattopadhyay
o Ms. Kelly Renehan

FRESHFIELDS BRUCKHAUS DERINGER

o Mr. Brian King
o Mr. Elliot Friedman
o Mr. Ricardo Chirios
o Mr. Sam Prevatt
o Mr. Lee Rovinescu
o Ms. Madeline Snider
o Mr. Cameron Russell
o Ms. Katerina Gross
o Ms. Yesica Crespo
o Ms. Cassia Cheung

PARTY REPRESENTATIVES

o Ms. Laura Robertson
o Ms. Suzana Blades
o Mr. Alberto Ravell
o Mr. Fernando Avila

TECHNICAL SUPPORT

o Mr. Jamie Johnson (FTI)
o Mr. James Haase (Immersion Legal)

ii. For the Respondents:

CURTIS, MALLET-PREVOST, COLT & MOSLE

o Mr. George Kahale, III
o Mr. Benard V. Preziosi, Jr
o Ms. Arianna Sánchez
o Mr. Simon Batifort
o Ms. Irene Petrelli
o Ms. Matilde Flores

PARTY REPRESENTATIVES

o Ms. Gabriela Villamizar

TECHNICAL SUPPORT

o Mr. Dario Gatti (Quadrant Economics)
o Ms. Desiree Okunola (Quadrant Economics)
o Mr. Ivan Vazquez (Quadrant Economics)

115.
In the course of the Hearing, the Tribunal heard evidence from the following witnesses and experts:

i. For the Claimant:

Mr. Patrick J.M. Wolfe, Chair of the Management Company's Board of Directors (2005-2007), Drilling and Production Manager (2005-2007), and one of the Claimant's representatives at the Transition Committee.
Prof. Allan Brewer-Carías, the Claimant's Venezuelan law expert.
Dr. Richard Strickland, the Claimant's technical expert in relation to issues concerning production volumes. In particular, he addresses the production forecasts proposed by the Respondents' expert Mr. Patiño.
Dr. Manual A. Abdala, the Claimants' quantum valuation expert.
Mr. Pablo D. López Zadicoff, the Claimants' quantum valuation expert.

ii. For the Respondents:

Mr. Leonardo Marcano, member of CVP's Technical Subcommittee in charge of evaluating and reviewing technical documents regarding the Project's contracting and drilling activities (2004 - 2006), one of CVP's representatives in the Transition Committee (2007), PetroSucre's Director (January 2008 – June 2009), and PetroSucre's General Manager (July 2009 – August 2015).
Mr. Sergio Salomón, Acting Manager of PetroSucre's Integrated Reservoir Studies.
Mr. Rubén Figuera, first President of PetroSucre (January - December 2008), CVP's General Manager of Offshore Joint Ventures (March 2007 – November 2009), and Internal Director of CVP's Board of Directors (May 2014 – August 2017). He is also the Respondents' fact witness for oil production issues for the purposes of their quantum analysis.
Prof. Luis Alberto García Montoya, the Respondents' Venezuelan law expert.
Dr. Daniel Flores, the Respondents' quantum valuation expert.
Mr. Jesús Rafael Patiño Murillo, the Respondents' expert on production volumes.

116.
Interpretation services were provided throughout the Hearing by:

i. Mr. Charles H. Roberts;
ii. Mr. Daniel Gilgio; and
iii. Ms. Silva Colla.

117.
Mr. David A. Kasdan of Worldwide Reporting provided court reporting services at the Hearing.

4. The Post-Hearing phase

118.
At the end of the Hearing, it was agreed that the Tribunal would submit to the Parties certain questions that they may address in their post-hearing briefs ("PHBs") due by 1 February 2019.
119.
The Tribunal submitted these questions on 3 December 2018, and added that it would "welcome a joint valuation model" from the Parties' quantum experts or, "in the alternative", indication from each Party whether or not the opposing Party's valuation model adequately represented its own quantification of the alleged damages at issue.
120.
On 3 January 2019, the Parties' quantum experts submitted a joint valuation model.
121.
On 30 January 2019, Counsel for the Respondents reported on the sanctions that the United States Government had recently imposed on PDVSA which could have a "possible impact" on the filing of the Respondents' PHB. The Claimant made no comment.
122.
On 31 January 2019, further to the Respondents' communication regarding the sanctions against PDVSA, the Tribunal suspended the time limit for the Parties' simultaneous submissions of the PHBs. In doing so, the Tribunal clarified that delays in that respect could have repercussions on the Tribunal's schedule for the deliberations and the timing of the award.
123.
The Respondents kept the Tribunal appraised on all developments as to the possible release of their PHB.
124.
On 8 February 2019, Counsel for the Respondents received confirmation from the U.S Office of Foreign Assets Control ("OFAC") that their PHB could be filed notwithstanding the sanctions against PDVSA. The Respondents therefore proposed a simultaneous filing of the Parties' PHBs on 11 February 2019.
125.
On 10 February 2019, the Respondents filed their PHB ("R-PHB") with the Tribunal Secretary. On 11 February 2019, the Claimant filed its PHB ("C-PHB") with the Tribunal Secretary. On 12 February 2019, the Tribunal Secretary circulated the PHBs to both Parties and the Tribunal.
126.
On 18 February 2019, the Tribunal received the hard copies of the Parties' PHBs.
127.
On 25 February and 1 March 2019, the Respondents and the Claimant respectively filed their costs declarations.
128.
On 21 March 2019, the Claimant submitted a letter regarding the award of 8 March 2019 rendered by the tribunal in the ICSID Arbitration with respect to the claims brought by ConocoPhillips against Venezuela ("ICSID Award"). The Claimant noted that the ICSID Award "awarded damages of US$ 562,140,959 for the unlawful expropriation of the Corocoro Project". According to the Claimant, however: (i) the ICSID Award dealt only with the liability of Venezuela under international law "rather than the liability of PDVSA in connection with the Corocoro Contracts"; (ii) the ICSID Award recorded ConocoPhillips' "undertaking that it does not seek double recovery and that if it obtains payment from the relevant governmental actor it will provide an offset to the PDVSA subsidiaries through an appropriate credit or reimbursement, which is the same undertaking as ConocoPhillips has given in these proceedings"; and (iii) no issue of double recovery, could potentially arise, "until the ICSID claimants obtain payment on the ICSID award". The Claimant therefore submitted that the ICSID Award has "no effect on CVP and PDVSA's liability for their non-performance and positive breaches of the Corocoro Contracts".
129.
On 28 March 2019, the Respondents stated having applied for a license from OFAC for them to comment on the Claimant's letter of 21 March 2019. The Respondents also estimated that they would be able to provide said comments by 8 April 2019, if not earlier.
130.
On 24 April 2019, the Claimant requested the Tribunal to direct the Respondents to reply to the Claimant's letter of 21 March 2019.
131.
On 26 April 2019, the Tribunal requested the Respondents to provide an update on the progress of obtaining the OFAC license, by 2 May 2019. Moreover, should the license be obtained in the meantime, the Tribunal instructed the Respondents to provide their response to the Claimant's letter of 21 March 2019 within 2 business days of obtaining the OFAC license.
132.
On 7 May 2019, the Tribunal reminded the Respondents of its communication of 26 April 2019 requesting an update on the status of the OFAC license, and invited the Respondents to provide the aforementioned update by 8 May 2019.
133.
The same day, the Respondents confirmed that the requisite OFAC license was still pending and assured the Tribunal that they would provide their comments to the Claimant's letter of 21 March 2019 as soon as the license was obtained.
134.
On 21 May 2019, after receiving clearance from OFAC on 20 May 2019, the Respondents commented on the Claimants' letter of 21 March 2019.
135.
On 29 May 2019, the Tribunal closed the proceedings.
136.
On 30 May 219, the Tribunal submitted the draft award to the ICC for scrutiny.
137.
On 27 June 2019, the ICC Court approved the draft final award pursuant to Article 21 of the ICC Rules.
138.
On 17 July 2019, the ICC Secretariat informed the Tribunal of the ICC Court's decision on costs of the arbitration.

5. Time-limit for rendering the Award

139.
In accordance with Article 18(1) of the ICC Rules, the time limit for rendering the final award is 6 months from the date of the last signature of the ToR (namely, 27 July 2017). In accordance with Article 18(2) of the ICC Rules, the ICC Court has since then extended this time limit as follows:

• at its session of 18 January 2018, to 31 October 2018 (the ICC Secretariat's letter of 26 January 2018);
• at its session of 18 October 2018, to 31 January 2019 (the ICC Secretariat's letter of 30 October 2018);
• at its session of 24 January 2019, to 31 May 2019 (the ICC Secretariat's letter of 31 January 2019);
• at its session of 16 May 2019, to 28 June 2019 (the ICC Secretariat's letter of 29 May 2019);
• at its session of 20 June 2019, to 31 July 2019 (the ICC Secretariat's letter of 28 June 2019); and
• at its session of 18 July 2019, to 30 August 2019 (the ICC Secretariat's communication of 23 July 2019).

II. REQUESTED RELIEF

140.
In its PHB,112 the Claimant requests the Tribunal to render an award:

(a) Declaring that CVP breached its contractual obligations and the duty of good faith, loyalty, and fair dealing owed to Claimant under the Association Agreement, Consortium Agreement, and Venezuelan law, and that CVP is liable fully to compensate Claimant accordingly;

(b) Declaring that PDVSA is liable under the Guarantee to indemnify Claimant for CVP's breaches of the Association Agreement and Consortium Agreement, and that PDVSA is liable fully to compensate Claimant accordingly;

(c) Declaring that PDVSA breached its contractual obligations and duty of good faith, loyalty, and fair dealing owed to Claimant under the Guarantee and Venezuelan law, and that PDVSA is liable fully to compensate Claimant accordingly;

(d) Declaring, in the alternative to (a)-(c) above, that Respondents' conduct constitutes an hecho ilícito under Venezuelan law, and that Respondents are liable fully to compensate Claimant accordingly;

(e) Declaring, in the alternative to (a)-(d) above, that Respondents have been unjustly enriched, and that Respondents are liable fully to compensate Claimant accordingly;

(f) Awarding damages, net of taxes, in an amount quantified at US$1,477 billion (as of 31 May 2018) (US$1,586 billion if updated to 31 December 2018), including pre-award compound interest;

(g) Awarding any other appropriate restitutionary compensation in an amount to be quantified;

(h) Awarding post-award compound interest at a rate of 13.94%, or as to be determined by the Tribunal, to run from the date of Award until the date of full and final payment;

(i) Requiring Respondents to bear the costs of the arbitration, including Claimant's legal and expert fees and costs, and Claimant's internal costs, together with interest on such fees and costs; and

(j) Granting such additional or other relief as may be justified in law or equity.

141.
The Respondents in turn request that the "Claimant's claims should be rejected in their entirety and all costs of this case should be assessed against Claimant".113

III. LIABILITY

142.
In this Section of the Award, the Tribunal will assess the Parties' positions on liability. The Parties' arguments, insofar as they are necessary to resolve the relevant issues in dispute, have been reproduced prior to the Tribunal's analysis of each issue. That said, the Tribunal may further develop the Parties' position in the analysis itself. In any event, for reasons of procedural economy, the Tribunal has not provided a summary of each and every submission, argument, or objection raised by the Parties. Instead, it has reproduced only what it views as the most important arguments for its decision. However, even if not expressly reproduced, the Tribunal has considered and examined all of the Parties' arguments.

A. PRELIMINARY MATTERS

1. Arbitrability of the Claimant's claims and the Tribunal's Jurisdiction

1.1 The Parties' positions

143.
In their initial pleadings, the Parties succinctly referred to (and incorporated by reference) the respective positions and arguments on arbitrability as developed in the course of the ICC P&H Arbitration.114 Accordingly, the Respondents argued that, pursuant to Article 151 of the Venezuelan Constitution, the Claimant's claims are non-arbitrable and beyond the Tribunal's jurisdiction because they are "based on the implementation" of sovereign decisions of the Government (i.e. the 2007 Nationalization Decree), adopted in the exercise of Venezuela's jure imperii.115 In turn, the Claimant contended that the Tribunal is not being asked to "evaluate the constitutionality or validity of sovereign powers of the Venezuelan State, nor to opine on the 'implementation of sovereign decisions'", but rather to assess the "Respondents' failure to perform their commercial obligations under the [AA]",116 and thus this dispute is arbitrable.
144.
Following the Parties' first round of pleadings in the present case, the Tribunal dismissed the Respondents' arguments on arbitrability in the ICC P&H Arbitration,117 finding that:

[…] the Willful Breach Claims comprise allegations of multiple breaches of the Respondents' obligations under the AAs and the Guarantees (and not merely the implementation of the 2007 Nationalization Decree) and are thus squarely arbitrable. Article 151 of the Venezuelan Constitution does not limit the arbitrability of claims like the one in the case at hand in any way.118

145.
In view of this, the Claimant submits that the "same result follows as to the claims of contractual breach in [the present] case".119 On the other hand, the Respondents submit that "there are additional factors in this case, including the text of the arbitration clause itself (and of the Congressional Authorization that authorized it), which warrant a different outcome on the arbitrability issue".120 The Respondents' argument runs as follows:

i. The arbitration agreement in Clause 25.2 of the Corocoro AA is "not as broad" as the ones in the P&H Contracts.121 Rather, Clause 25.2 limits the Tribunal's jurisdiction to "matters not within the competence of the Control Committee",122 which is responsible for "approv[ing]" certain "fundamental decisions of national interest to the Venezuelan State related to the performance of the [Corocoro AA]".123

ii. The Venezuelan Supreme Court declared the validity and constitutionality of the arbitration agreements set out in the Congressional Authorization (to be) incorporated in the Association Agreements for the exploration and exploitation of the New Areas. However, in doing so it also noted that:124 (i) the Association Agreements, including the Corocoro AA, would "be governed by and interpreted under the laws of the Republic of Venezuela";125 (ii) matters within the competence of the Control Committee would not be subject to arbitration;126 and (iii) it would be the Control Committee which would be "entitled to deal with fundamental decisions of national interest relating to the performance of the Agreement, from which it may be concluded that the matters ultimately dealt with by the Arbitral Tribunal would not be fundamental for the national interest".127

iii. The Bicameral Commission clarified that the incorporation of arbitration agreements into the Association Agreements for the New Areas should not "in any way, […] subjugat[e] the sovereign rights of the Republic of Venezuela to such dispute resolution Mechanism".128 It further stated that "[i]n no case [should] the exercise by the Republic of Venezuela of its inalienable and sovereign rights be submitted to arbitration […]".129

iv. The Ministry, PDVSA and CVP reported the following to Congress when seeking authorization to enter into the Corocoro AA pursuant to the Twenty-third Condition of the Congressional Authorization:130 "The matters under the Control Committee's discretionary powers are not subject to arbitration, and its decisions may only be reviewed by Venezuelan courts in order to determine whether the CVP representative took into account the national interest of the Venezuelan State when casting their vote. On the other hand, disputes over commercial matters that cannot be resolved by agreement between the parties, shall be subject to arbitration in accordance with the rules of the International Chamber of Commerce. This dual dispute resolution mechanism reflects Article 127 of the Constitution, which establishes the principle of jurisdictional immunity of the State, with an exception known as the "commercial exception". Under this exception, the State would not invoke jurisdictional immunity when conducting activities of a commercial nature, for which international commercial arbitration is the appropriate mechanism to resolve this type of disputes [sic]".131

146.
In light of the above, the Respondents stress that, while the case of the ICC P&H Claimants was "based on the alleged non-performance of the Association Agreements prior to the expropriation",132 the Claimant now alleges that "it had continuing rights to production which Respondents are obligated to respect notwithstanding the expropriation".133 For the Respondents, the Claimant's claims directly implicate Venezuela's exercise of sovereign power and therefore they should be "dismissed on the ground that they are non-arbitrable and beyond the jurisdiction of this Tribunal".134
147.
In turn, the Claimant notes that the list of items reserved for decision by the Control Committee in Clause 4.2 of the Corocoro AA is exhaustive.135 In this regard, pointing to the statements by Prof. García Montoya at the Hearing,136 the Claimant submits that the 2007 Nationalization Decree, its implementation, or the Respondents' breach of their contractual obligations, "were not among the enumerated matters reserved for decision by the Control Committee".137 For the Claimant, it is "absurd" for the Respondents "to suggest that the Parties had agreed that the Control Committee, on which CVP had the deciding vote, would have jurisdiction over matters related to CVP's breach of its contractual obligations. This would have been tantamount to allowing CVP to sit in judgment of its own alleged breach of the Corocoro AA — a concept that is anathema to due process".138
148.
According to the Claimant, the Respondents' position that the Control Committee had competence over fundamental decisions of national interest broadly understood (as opposed to the exhaustive list in Clause 4.2 of the Corocoro AA), attempts to find ground in the Fourth Condition of the Congressional Authorization.139 However, the Claimant argues that the Fourth Condition "only serves to confirm that the list of matters to fall within the jurisdiction of the Control Committee 'shall be described' in the Corocoro AA", which is indeed what Clause 4.2 of the Corocoro AA has done.140
149.
In this context, the Claimant notes that the Respondents have "never once" contended that the Corocoro AA was not in conformity with the Fourth Condition (which confirms that there are no issues of national interest not already listed in the Corocoro AA).141 On the contrary, in November 1995 PDVSA explained to the Investors of the New Areas that "Clause 4.2 of the Agreement will clearly provide that the role of the Control Committee is to 'approve or reject' fundamental decisions of Venezuelan national interest related to the implementation of the Agreement, and that the list of such decisions is encompassed in Clause 4.2".142 The Claimant stresses that the Respondents further confirmed the exhaustive nature of the list in Clause 4.2 of the Corocoro AA, when again explaining to the Investors in December 1995 that the "Control Committee will have jurisdiction over the approval of specified matters of national interest related to the performance of the Association Agreement".143

1.2 Analysis

150.
As a preliminary remark, the Tribunal notes that the Respondents do not challenge or otherwise seek a reconsideration of the reasoning and findings in the ICC P&H Arbitration in relation to arbitrability. Rather, the Respondents submit that there are certain additional factors in the present case that require a different conclusion.144
151.
Thus the Tribunal must assess whether the said additional factors in fact warrant a determination that the present dispute is not arbitrable. In the Tribunal's view, they do not. First, similarly to the claimants in the P&H Arbitration, the Claimant "is not challenging the 'constitutionality or legality of the sovereign acts adopted by the Venezuelan State'".145 It is correct that the Claimant does consider the effects of the 2007 Nationalization Decree and its implementation, and submits that certain obligations in the Corocoro Contracts survived the formal extinguishment of the Corocoro AA through the 2008 Transfer Decree (i.e. the Claimant's Surviving Obligations Claim).146 Nevertheless, as seen infra, irrespective of its merit, the basis for such claim is purely contractual.147 Overall, the Claimant's claims in this arbitration do not seek to override the 2007 Nationalization Decree or any other measure issued pursuant to that Decree.
152.
Second, while Clause 25.2(a) of the Corocoro AA makes clear that the Tribunal only has jurisdiction over "matters not within the competence of the Control Committee",148 Clause 4.2 of the Corocoro AA equally clearly defines the competence of the Control Committee. Clause 4.2 in full reads as follows:149

The fundamental decisions of national interest to the Venezuelan State related to the performance of this Agreement shall be submitted for approval by the Control Committee. These decisions shall be the following :

(a) the approval of any material modification to the Minimum Work Program;

(b) the approval of the extension of the Exploration Period to include Phase II and of any extension of the Operation Period for any Development Area pursuant to Clause 21.2;

(c) the approval of any Evaluation Plan and any material modification thereto;

(d) the approval of any Development Plan and any material modification thereto;

(e) the approval of any unitization agreement for Discovery that extends across national boundaries that does not conform to the requirements of Clause 16.4 and submission of any Development Plan for such Discovery without unitization agreement or the portions thereof necessary to permit orderly development in each case in accordance with Clause 16.6;

(f) the approval of any plan for the implementation of any production curtailments required to permit compliance with Venezuelan international treaty obligations pursuant to Clause XVIII; and

(g) the resolution of any deadlock with respect to matter presented to the Management Company Board pursuant to Clause 5.5 that fails to receive Qualified Majority Vote.150

153.
For the Tribunal, the wording of Clause 4.2 of the Corocoro AA indicates that the list of the "fundamental decisions of national interest to the Venezuelan State" under the Control Committee's competence is exhaustive. In this regard, disputes regarding the alleged breach of the Corocoro Contracts by the Respondents, as the one at issue, do not fall within such mutually agreed list. In fact, the Respondents have not established that the Claimant's claims in this arbitration fall within the closed list set out in Clause 4.2 of the Corocoro AA.
154.
Indeed, the chapeau of Clause 4.2 circumscribes the "fundamental decisions of national interest to the Venezuelan State" to those "relat[ing]" to the "performance" (in the sense of implementation or execution) of the Corocoro AA and its operations.151 Therefore, for the Corocoro Project to be properly carried out, the Control Committee had to "approve" such contractually defined fundamental decisions. However, while the present dispute does concern the Respondents' alleged non-performance of their obligations under the Corocoro Contracts (i.e. the Claimant's Non-Performance Claim),152 it does not concern the implementation, execution, or operation of the same.
155.
Third, at the Hearing Prof. García Montoya acknowledged that, pursuant to Clause 4.2 of the Corocoro AA, "there [are] no decision[s] of the Control Committee at issue in this arbitration", which (as seen) under normal circumstances would have otherwise pertained to "issues of technical and commercial operations" of the Corocoro Project.153 According to Prof. García Montoya, however, the "fundamental decisions" outside the Tribunal's jurisdiction could not be "strictly interpreted" to "only includ[e]" the items in Clause 4.2 of the Corocoro AA. Rather, the Fourth Condition in the Congressional Authorization should also be considered, which is broader than Clause 4.2.154
156.
More specifically, the Fourth Condition states that the Parties "shall submit fundamental decisions of national interest in connection with the execution of the Agreement to the approval of the Control Committee", which "shall be described in the [Corocoro AA] and shall include, among others, the approval of the exploration, evaluation and development plans, as well as any other modification to such plans, including the extension of the terms for exploration or exploitation, and the implementation of production reductions in compliance with international obligations of the Republic of Venezuela".155 In this regard, it is of little relevance that the phrase "among others" in the Fourth Condition makes it non-exhaustive, and thus in principle broader than Clause 4.2 of the Corocoro AA (as pointed out by Prof. García Montoya), because:

i. Like the Corocoro AA, the Fourth Condition is concerned with issues of fundamental national interest related to the "execution" (i.e. the implementation) of the Corocoro AA, while issues concerning the breach of the Corocoro Contracts do not fall within such category.

ii. The Fourth Condition does not refer to "fundamental decisions of national interest" in the abstract, but to those that require the "approval" of the Control Committee. What is relevant, therefore, is not whether the content of a particular decision is of fundamental national interest to Venezuela, but whether such decision was assigned to the competence of the Control Committee.

iii. A comparison between Clause 4.2 of the Corocoro AA and the Fourth Condition shows that the exhaustive list in Clause 4.2 of the Corocoro AA contains issues of national interest additional to those preliminarily identified in the Fourth Condition. Notably, the Fourth Condition itself mandated for "these [fundamental] decisions" to be "described" in the Corocoro AA. The term "among others" in the Fourth Condition was thus given effect by means of Clause 4.2 of the Corocoro AA. Indeed, the contemporaneous statements by the Respondents in November and December 1995 relied upon by the Claimant confirm that Clause 4.2 of the Corocoro AA specified all matters of national interest that would fall within the competence of the Control Committee.156

iv. The text of the Corocoro AA was subsequently approved by the Venezuelan Congress.157 Therefore, to the extent there are any inconsistencies between the Congressional Authorization and the Corocoro AA, it is reasonable to accept that the Corocoro AA controls.158

157.
Fourth and lastly, neither the Supreme Court's decision, the Bicameral Commission Report, nor the Ministry's report invoked by the Respondents are at odds with any of the Tribunal's findings on arbitrability up to this point.159 Venezuela's concern was for matters of national interest to be excluded from arbitration and for them to be decided by the Control Committee. However, as already established, the present dispute does not deal with any of the fundamental decisions of national interest set out in Clause 4.2 of the Corocoro AA assigned to the Control Committee. Moreover, the Claimant's claims do not question either the legality or constitutionality of the 2007 Nationalization Decree and its implementation. Rather, the Claimants seek to hold CVP and PDVSA liable for the alleged contractual breaches of the Corocoro Contracts, which, as stated by the Supreme Court, will be governed by and interpreted under the laws of the Republic of Venezuela. Accordingly, in line with the Bicameral Commission Report, the Parties' dispute does not in "any way, […] subjugat[e] the sovereign rights of the Republic of Venezuela".160 For the same reason, the Respondents' invocation of the Venezuela's "jurisdictional immunity" referred to in the Ministry's report, is irrelevant.161
158.
The Tribunal therefore determines that the present dispute is arbitrable and squarely falls within the Tribunal's jurisdiction under Clause 25.2(a) of the Corocoro AA.

2. Amiable compositeur

2.1 The Claimant's position

159.
Clause 25.2(a) of the Corocoro AA states that "all arbitrators appointed pursuant to this [AA] shall have the powers of an amiable compositeur".162 In this regard, and noting that in "most jurisdictions" the concept of amiable compositeur is synonymous with that of ex aequo et bono, the Claimant submits that decision-makers acting in such capacity must apply "equity, in the sense of fairness and justice (aequitas), over the strict application of the laws (jus summa)".163 Differently stated, save for cases where the issue concerns "compliance with mandatory Venezuelan laws regarding public order (orden público) or morals (buenas costumbres)",164 a tribunal acting as amiable compositeur should "exercise its equitable powers to reach a fair decision, if the strict application of legal provision would lead to an unfair or unjust result".165 According to the Claimant, the above is consistent with Venezuelan law (lex contractus), New York law (lex arbitri), the ICC Rules, and has been confirmed by "leading international arbitration commentators".166
160.
In view of this, the Claimant submits that, particularly in long-term contracts as the ones at issue, the "Tribunal is empowered to depart from the strict application of law to the extent necessary to reach a fair, just, and equitable result, in relation to both liability and quantum".167 In particular:

i. Regarding liability, the powers of amiable compositeur should lead the Tribunal to a "straightforward application" of the terms of the Corocoro Contracts. In doing so, the Tribunal should hold the Respondents liable for breach of contract (or in the alternative for the existence of an hecho ilícito or unjust enrichment).168

ii. Regarding quantum, the powers of amiable compositeur are "relevant" to determine the compensation that the Respondents should be required to pay to remedy the damages caused, "including interest".169

iii. Regarding both liability and quantum, the powers of amiable compositeur allow the Tribunal to construe "any possible doubt arising from the strict application of Venezuelan law" to be resolved in favor of the Claimant, as the non-breaching Party.170

161.
Lastly, in response to the Respondent's argument that arbitrators acting as amiable compositeurs cannot "override" mandatory rules of Venezuelan law (i.e. 2007 Nationalization Decree and its implementation),171 the Claimant underlines that it is not asking the Tribunal to "wield its powers of amiable compositeur to override" the 2007 Nationalization Decree.172 Rather, this arbitration concerns the Respondents' breaches of the Corocoro Contracts, which are not excused by the 2007 Nationalization Decree in light of the "plain terms" of the force majeure provision in Clause 28.1 of the Corocoro AA.173

2.2 The Respondents' Position

162.
The Respondents do not dispute that the Tribunal has the powers of an amiable compositeur and is therefore empowered to depart from the strict application of law to the extent necessary to reach a fair, just, and equitable result, in relation to both liability and quantum.174
163.
That being said, the Respondents contend that amiable composition does not authorize the Tribunal to: (i) disregard the Parties' choice of Venezuelan law as the law governing the Corocoro AA;175 (ii) "invent a claim against these Respondents";176 (iii) "modify the terms of the [Corocoro AA]";177 (iv) "ignore all facts and legal principles";178 or (v) "override" mandatory rules of public policy.179
164.
Regarding the latter point in particular, the Respondents submit that Venezuelan law "unanimously states" that mandatory rules of law and public policy "must be respected by arbitrators acting as amiable compositeurs".180 In view of this, and considering that "hydrocarbon legislation" (including the 2007 Nationalization Decree) is a matter of public policy,181 the "amiable compositeur provision accompanying the choice of Venezuelan law in the Corocoro Profit Sharing Agreement does not permit this Tribunal to override mandatory rules of Venezuelan law and therefore does not change the result in this case, which is that there is no basis for this Tribunal to grant compensation to Claimant for Respondents' compliance with mandatory rules of Venezuelan law and implementation of [the 2007 Nationalization Decree]".182 In short, the concept of amiable composition "adds nothing" to the Claimant's case.183

2.3 Analysis

165.
It is common ground between the Parties that the Tribunal may rely on its amiable compositeur powers pursuant to Clause 25.2(a) of the Corocoro AA to the extent necessary to reach a fair and equitable determination in this case. The Parties further agree that, in exercising its amiable compositeur powers, the Tribunal may not override or otherwise ignore mandatory rules of public policy under Venezuelan law. Moreover, it is not disputed that "hydrocarbon legislation", which includes the 2007 Nationalization Decree, "is a matter of public policy in Venezuela".184
166.
The dispute between the Parties on this point is therefore whether an eventual use by the Tribunal of its amiable compositeur powers risks contradicting, departing from or overriding the 2007 Nationalization Decree and its implementation. However, such a query cannot be settled in the abstract. The Tribunal must first determine whether the use of its amiable compositeur powers is appropriate in relation to a particular issue in dispute. Only then can the Tribunal assess whether its attempt to reach a fair and equitable determination pursuant to its amiable compositeur powers runs contrary to the 2007 Nationalization Decree or any other mandatory rule of public policy put forward by the Parties.
167.
Indeed, contrary to the Respondents' allegation that "mandatory rules of public policy [are] at issue" in this case, such as the 2007 Nationalization Decree, this does not make the "concept" of amiable compositeur in Clause 25.2(a) of the Corocoro AA outright irrelevant.185 First, it is the Claimant's position in this arbitration that it "is not asking the Tribunal to wield its powers of amiable compositeur to override the Nationalization Decree". Rather, the Claimant seeks for the Tribunal to apply its powers of amiable compositeur to inter alia "confirm the conclusions that the Tribunal must reach based on the straightforward application of the terms of the Corocoro Contracts and Venezuelan law" that the "Respondents should be held liable for their breach of contract".186 Second, according to the Claimant, some of the alleged contractual breaches by the Respondents have no basis on the 2007 Nationalization Decree.187
168.
Therefore, the Tribunal shall keep in mind its amiable compositeur powers and inherent limits when deciding all the relevant issues in dispute, as discussed in further detail below. For the sake of clarity, to the extent that no explicit reference is made to these powers, the Parties must assume that the Tribunal did not find it warranted to exercise its amiable compositeur powers.

3. The Claimant's Conduct and the Notification of its Claims

3.1 The Respondents' position

169.
The Respondents point out that, "until this Arbitration was filed, almost ten years after the nationalization, Claimant never gave any indication that it considered that it had any claim against Respondents for breach of contract, hecho ilícito or unjust enrichment".188 For the Respondents, this is the "best evidence" under Venezuelan law of what a party considers to be the scope of its protected rights,189 and is significant in two ways:

i. First, the attempt to claim breach of contract or hecho ilícito or unjust enrichment so long after the alleged unlawful acts constitutes "disloyal delay under Venezuelan law, or breach of the very duty of good faith Claimant relies on";190 and

ii. Second, the Claimant's conduct demonstrates that it never believed that it had a claim for breach of contract, or hecho ilícito, or unjust enrichment against the Respondents.191

170.
The Respondents note the Claimant's submission that: (i) the Respondents were aware of their own conduct and that the non-performance of the Corocoro Contracts was evident;192 and (ii) the Respondents fail to explain why its repeated reservations of rights were insufficient for notification purposes.193 In response, the Respondents make the following arguments:

i. First, they note that what is relevant is not the Respondents' awareness of what they have done pursuant to the 2007 Nationalization Decree, as "obviously they were aware of their actions in complying" with said Decree. Rather, "[w]hat is relevant is awareness that Claimant thought that what Respondents had purportedly done in implementing [the 2007 Nationalization Decree] or doing anything else constituted some sort of breach of contract or hecho ilícito or unjust enrichment on the part of Respondents".194

ii. Second, the Respondents observe that the list of letters referred to by the Claimant concerns the "alleged breaches by the Government" and are "conspicuously silent when it came to breaches by Respondents".195 In this context, the Respondents refer to the finding in the ICC P&H Award that "complaining about these measures does not automatically indicate that there have also been contractual breaches, much less of the specific provisions that the Claimants ultimately came to rely on".196

171.
The Respondents therefore submit that the "Claimant's conduct over an entire decade" is "fundamentally inconsistent" with the "notion" that the Claimant believes having any of the claims brought forward in this arbitration, "which itself precludes the assertion of such claims".197

3.2 The Claimant's position

172.
The Claimant submits that the Respondents' allegations on this point are "untrue, and in any event irrelevant".198 First, the Respondents do not point to any provision of the Corocoro Contracts requiring the Claimant to provide a notice of breach.199
173.
Second, the Respondents "do not explain why Claimant's repeated reservation of rights would not fulfil the notice requirement they seek to imply".200 In this context, the Claimant points to a number of communications that, considering the total repudiation of their contractual obligations, "put Respondents on notice that they would face an action for breach of the Corocoro Contracts".201 Moreover, in light of Clause 28.1 of the Corocoro AA, the Respondents were fully aware that the 2007 Nationalization Decree would not excuse their non-performance. As such, "no further notice that the nonperformance of their obligations under the AA would give rise to liability" was necessary.202 Indeed, "the question of notice is utterly irrelevant because the nonperformance was self-evident".203

3.3 Analysis

174.
The Tribunal first notes that in the ICC P&H Arbitration it was determined that, under Venezuelan law, a claim is only forfeited if it has not been claimed within a predetermined period of time established by law or by contract.204 In this regard, the Tribunal further notes that the following is undisputed:205

i. There is no requirement in the Corocoro Contracts compelling the Claimant to notify to the Respondents its contractual claims,206 which would otherwise result in the Claimant forfeiting such claims. Indeed, nothing in the Corocoro Contracts defines a specific right or claim by the Claimant that is to be forfeited, or a specific conduct the absence of which would result in a forfeiture of the right or claim, or a time-period beginning with a specified start time before forfeiture of a right or claim can occur.

ii. The Claimant has brought all of its claims in this arbitration (both contractual and non-contractual) within the relevant statute of limitation period.

iii. The Claimant has not waived any of its rights in relation to the claims it now asserts, despite the fact that the underlying factual circumstances that serve as a basis for such claims occurred considerably prior to the initiation of these proceedings.

175.
The Tribunal's analysis is therefore narrow and only requires determining whether the Respondents have established that, under Venezuelan law, the concept of "disloyal delay" warrants dismissing the Claimant's claims in this arbitration for having been brought nearly 10 years after the fact.
176.
The Tribunal has also noted the Respondents' additional argument that "the conduct of a party is the best evidence of what that party considers to be the scope of its protected rights".207 The Respondents submit that, in light of the Claimant's "extraordinary and inexplicable delay" in filing its claims, it is "clear evidence […] that the Claimant itself never really thought that it had a claim in the first place".208 However, the foregoing argument is, in the Respondents' own terms, "an evidentiary point".209 As such, it cannot be subject to a determination by the Tribunal as it does not entail a claim in and of itself. Indeed, the authorities relied upon by the Respondents on this point do not indicate that the conduct of a party in submitting a claim may result in the preliminary disposal of that claim. Instead, these authorities confirm that the parties' conduct is relevant to interpret the contract to which they are bound by, be it to determine their intent or to shed some light as to how to best understand ambiguous contractual provisions.210 Thus, the Tribunal may only take these authorities into account when assessing the credibility of the Claimant's claims in this arbitration.
177.
In view of the above, the Tribunal turns to the crux of the matter: the concept of disloyal delay under Venezuelan law. In this respect, the Tribunal concludes that the Respondents have not established that disloyal delay under Venezuelan law requires the dismissal of the allegedly belated claim. Indeed, the Respondents offer two authorities to substantiate its disloyal delay argument, none of which sufficiently shows that disloyal delay has such a prominent place in Venezuelan law.
178.
First, the Respondents refer to the writings of Venezuelan scholars, Profs. Bello Tabares and Jimenéz Ramos, who list examples of how the principle of good faith can be breached in a judicial proceeding, and address the concept of disloyal delay in this context.211 However, Profs. Bello Tabares and Jimenéz Ramos do not venture into the alleged effects of a disloyal delay. More significantly, Profs. Bello Tabares and Jimenéz Ramos give content to notion of disloyal delay solely on the basis of German doctrine and case law, qualifying it as a "German institution", and never affirm that it has been incorporated or otherwise adopted by Venezuelan law, courts, or practice.212
179.
Second, the Respondents refer to a 2011 judgment rendered by the Superior Court of the State of Bolívar.213 However, this judgment deals with and focuses on procedural fraud allegations, which are not at issue here. Accordingly, while the judgment quotes Profs. Bello Tabares' and Jimenéz Ramos' above publication (including the list of examples of possible breaches of the good faith principle), it does so in passing and as part of its obiter dictum.214
180.
That said, even if the concept of disloyal delay as envisaged under German law were applicable in Venezuela, any delay in the submission of Claimant's claims in this arbitration is not disloyal. As noted by the Claimants, Profs. Bello Tabares and Jimenéz Ramos state that for a delayed claim to be deemed disloyal, a claimant must conduct itself in a manner that leads the respondent "to objectively expect that the right will not be exercised".215 Yet, the Claimant wrote to the Respondents reserving its rights under the Corocoro Contracts for the expropriation of the Corocoro Project.216 Moreover, pursuant to the Corocoro Guarantee, PDVSA agreed to "unconditionally and irrevocably" guarantee CVP's performance of all its obligations under the Corocoro AA and the Corocoro CA "notwithstanding […] any delay […] by any investor in pursuing any remedies available against CVP".217 In consideration of the foregoing, the Respondents (and particularly PDVSA) could not have "objectively expected" that the Claimant would not bring forward the claims it has now brought in this arbitration.
181.
For the reasons set out above, the Tribunal finds the Respondents' disloyal delay submission unfounded.

B. THE ALLEGED BREACH OF THE COROCORO AA, THE COROCORO GUARANTEE AND THE COROCORO CA

1. The Claimant's position

182.
The Claimant submits that the Respondents breached the Corocoro Contracts in the following three principal ways.

i. First, by "completely ceas[ing] to perform the Corocoro Contracts from 1 May 2007 onwards" (the "Non-Performance Claim").218

ii. Second, by "fail[ing] to perform" obligations that, in the Claimant's view, "survived the termination of the [AA]" (the "Surviving Obligations Claim").219

iii. Third, by "breach[ing] numerous specific provisions of the Corocoro Contracts, including by executing a substitute contract with Eni […] prior to the purported termination of the Corocoro AA in January 2008" (the "Particular Breaches Claim").220

183.
According to the Claimant, the Non-Performance Claim, the Surviving Obligations Claim, and the Particular Breaches Claim, each gives rise to "liability under applicable Venezuelan law".221 Further, "collectively they evidence a single course of conduct by Respondents to disregard their obligations under the Corocoro Contracts" (the "Overall Breach Claim").222

1.1 Non-Performance Claim

184.
With respect to the Non-Performance Claim, the Claimant refers to the Tribunal's findings in the ICC P&H Arbitration that:223

i. Being an obligation of result, "performance is an end in itself".224

ii. "When parties enter into a contract, the least that is expected in terms of the result sought to be achieved, is that the contract will be performed per se; and failure to perform or obstructing performance would hinder the achievement of this result".225

iii. "[T]he total non-performance of a contract is a prima facie breach which raises a presumption of liability".226

iv. "[I]t is not disputed that the [P&H Contracts] were not performed on and from the date of the Expropriation on 1 May 2007. Thus, it follows that as from the Expropriation on 1 May 2007, the Respondents have arguably breached their obligation to perform the [P&H Contracts] under Venezuelan law".227

185.
In this context, the Claimant submits that, as in the ICC P&H Arbitration, it is "undisputed" in the present case that the "Respondents completely ceased to perform the Corocoro AA from 1 May 2007 onwards".228 Therefore, the Respondents' conduct constitutes a prima facie breach of the Corocoro Contracts.229

1.2 Surviving Obligations Claim

186.
Regarding the Surviving Obligations Claim, the Claimant relies on Clause 21.5 of the Corocoro AA which, in conjunction with Clause 10.6 of the Corocoro AA and with due regard to Section VIII of the Corocoro AA, provides for certain rights to survive the termination of the Corocoro Contracts.230 These provisions read as follows:

i. Clause 21.5 of the Corocoro AA:

Upon the termination of this Agreement all rights and obligations of the Parties hereunder shall terminate except for the following rights and obligations which shall survive such termination :

(a) Claims of Party against another Party for damages arising out of acts or omissions of the other Party relating to such other Party's obligations under this Agreement;

[…]

(c) The provisions of Clauses […] 8.6, […], [19], [20] (excluding Clause 20.9), [21], [22], [23], [24], [25], [26], and [30] […].231

ii. Clause 10.6 of the Corocoro AA:

Each Consortium and the related Consortium Agreement shall terminate upon the expiration of the Operation Period for the relevant Development Area or upon the earlier termination of this Agreement with respect to such Development Area in respect of all Participating Investors pursuant to Clause XXII except the obligations of the Parties that survive the termination of this Agreement in accordance with Clause 21.5 which shall also survive the termination of such Consortium and the related Consortium Agreement.232

iii. Section VIII of the Corocoro CA:

This Consortium Agreement, shall terminat[e] at the conclusion of the Operating Period for the Development Area or sooner, on the date on which the Partnership Agreement for the Development Area and all Participating Investors terminates, pursuant to Article XXII of the Partnership Agreement. Upon termination of the Consortium Agreement, all rights and obligations of the Parties under such shall also be terminated, with the exception of said rights and obligations specified in Article 21.5 of the Partnership Agreement.233

187.
According to the Claimant, the foregoing provisions guarantee, beyond the termination of the Corocoro Contracts, some of the Claimant's "rights" (and the "Respondents' corresponding obligations") which constitute the "core" of the Parties' "financial bargain",234 namely, the Claimant's right: (i) to "participate in the development of the Corocoro Project" pursuant to Clause 8.6 of the Corocoro AA;235 (ii) to a "continued sharing of production on a pro rata basis" pursuant to Clause 19.2 of the Corocoro AA;236 and (iii) to perceive joint revenues from a discovery pursuant to Clause 20 of the Corocoro AA.237
188.
More specifically, the above-mentioned Clauses 8.6, 19.2 and 20 of the Corocoro AA read in their relevant part as follows:

i. Clause 8.6 of the Corocoro AA:

Following the submission of a Development Plan to the Control Committee, except as otherwise provided in Clause 5.8, the applicable Discovery may only be developed by mutual agreement of CVP and the Investors, or the relevant Participating Investors, for a period equal to the later of:

(a) ten (10) years from the date of initial submission, and

(b) the end of the Evaluation Period for the Evaluation Area in which such Discovery is located or the Operation Period for the Development Area in which such Discovery is located, as the case may be.238

ii. Clause 19.2 of the Corocoro AA:

Except as provided in Clause 19.3, title to all Production shall vest on pro rata basis among the members of the relevant Consortium in proportion to their respective Participations in the relevant Discovery at the wellhead or other point of extraction. Except as provided in Clause 19.4 each Consortium member shall take its pro rata share of the Production from each Discovery in the related Development Area, corresponding to its Participation in such Discovery, at the Delivery Point specified in the applicable Development Plan.239

iii. Clause 20 of the Corocoro AA:

20.1 The financial relationship among the Parties under this Agreement shall be based upon profit sharing. In particular, the members of each Consortium with Participations in any Discovery or the relevant Investors in the case of Early Production shall be required to pay a profitability bonus for each calendar quarter equal to the relevant PEG Amount for such calendar quarter, to CVP for transfer to the Venezuelan State in accordance with the Conditions as provided in this Clause XX. Profit shares allocable to the Consortium members, or the Investors, shall take the form of Production and Joint Revenues allocated in accordance with Clause XIX and this Clause XX.240

[…]

20.5 All Joint Revenues realized in any month shall be allocated among Discoveries in accordance with the Accounting Procedures. As set forth in the Accounting Procedures, such Joint Revenues shall be taken into account in determining the PEG Amounts. All Joint Revenues from a Discovery not allocated to CVP as part of the PEG Amount shall be allocated among the relevant Consortium members in accordance with their respective Participations in such Discovery. If such Discovery is not yet subject to Development Plan, such distribution will be made among the Investors or the relevant Participating Investors in proportions that they agree among themselves.241

189.
Based on these provisions and the reference to the same in Clause 21.5 of the Corocoro AA242 (which is, in turn, referred to in Section VIII of the Corocoro CA),243 the Claimant submits that its "rights to develop the Corocoro [Project] and to share pro rata in its production and revenue survive the termination of the AA (and the CA)".244
190.
In this context, the Claimant argues that the Respondents breached such surviving obligations and continue to do so "to this day",245 in two ways.
191.
First, by not performing the Corocoro Contracts from 1 May 2007 onwards.246
192.
Second, by carrying on with the development of the Corocoro Project through PetroSucre. In particular, the Claimant submits that, by "developing the Corocoro Discovery through the formation of an empresa mixta with Eni", the Respondents contravened the explicit mandate of Clause 8.6 of the Corocoro AA, according to which the "[Corocoro] Discovery [could] only be developed by mutual agreement of CVP and the Investors".247 Moreover, by impeding the Claimant from receiving its 32.2075% share of the Project's production and revenue,248 and instead allocating 74% to CVP and 26% to Eni,249 the Respondents breached the production and revenue sharing provisions in Clauses 19 and 20 of the Corocoro AA.250
193.
In support of this argument, the Claimant emphasizes that (i) Clause 19.2 of the Corocoro AA "impose[d] a positive obligation on [CVP] to only take Production in proportion to its 35% interest in the Project";251 (ii) Clause 20.5 of the Corocoro AA "ma[de] it clear that Respondents could take no more than 35% of the Project's Joint Revenue";252 (iii) Clause 12.5 of the Corocoro AA envisaged the Claimant's right as Operator to "at all times maintain an Overall Interest of at least 30% in the Association".253
194.
Incidentally, the Claimant submits that "[b]y impeding Claimant from receiving its share of production or revenue from the Corocoro Project, Respondents also breached their obligation of good faith under Venezuelan law, pursuant to which it has an implied duty not to 'impede or frustrate the interests [that Claimant] sought to achieve through the contract'".254 For the Claimant, this constitutes a breach of Clauses 2.1 to 2.4 and 25.5 of the Corocoro AA, which allegedly incorporate the good faith principle under Venezuelan law.

1.3 Particular Breaches Claim

195.
With respect to the Particular Breaches Claim, the Claimant's argument is three-fold.

Non-repayment of the loan

196.
First, the Claimant submits that the Respondents have failed to repay the loan extended to CVP for it to acquire its 35% interest in the Corocoro Discovery.255 According to the Claimant, this constitutes a breach of Clause 8.5 of the Corocoro AA256 and of Section 8.2 of Annex D of the AA.257 Moreover, it denotes a breach of the duty to perform the Corocoro AA in good faith and not to "impede or frustrate the interests [that Claimant] sought to achieve through the contract".258

Replacement of the Corocoro Project's management structure

197.
Second, the Claimant submits that, by instituting the Transition Committee in March 2007 and materially relieving the Claimant as Operator on 1 May 2007, the Respondents "replaced the existing management structure of the Corocoro Project".259 Given that this was not mandated by the 2007 Nationalization Decree,260 the Respondents "breached specific provisions of the [Corocoro] AA providing for Claimant's rights of oversight and control of Project activities".261 In particular, the Respondents prevented the Management Company and "other management organs" (of which the Claimant was part of) "from directing and supervising the Project's activities",262 in breach of Clauses 5.2263 and 13.1264 of the Corocoro AA.265
198.
Moreover, the Claimant argues that the Respondents failed to comply with their duties as Operator of the Project (despite the Claimant's requests in that respect) and breached the Corocoro Contracts by: (i) not providing a monthly operational report pursuant to Section 3.2 of Annex D of the Corocoro AA;266 and (ii) not granting to the Claimant prompt and full access to all data, records, and information concerning the Project, pursuant to Clause 26.2 of the Corocoro AA (a provision that, according to the Claimant, also survived the termination of the Corocoro Contracts in accordance with Clause 21.5 of the Corocoro AA).267

Execution of the CVP-Eni MoU and Conversion Contract

199.
Third, the Claimant submits that, by executing the MoU (between the Respondents and Eni) and the Conversion Contract (between CVP and Eni), the Respondents "affirmatively disclaimed all of their obligations under the Corocoro Contracts" while the "Corocoro AA was still afoot".268 Indeed, the Claimant contends that the MoU and the Conversion Contract were entered into on 26 June 2007 and 30 November 2007, respectively,269 while the Corocoro AA was purportedly terminated on 16 January 2008 at the earliest (in accordance with the 2007 Law on Effects of Migration and the 2008 Transfer Decree).270
200.
In this regard, the Claimant further notes that "nothing in the Nationalization Decree or any other Venezuelan law mandated Respondents to enter into [these contracts] with Eni prior to the termination of the Corocoro AA".271 According to the Claimant, the Respondents' conduct breached Clauses 2.3,272 2.4,273 and 8.3 of the Corocoro AA,274 as well as Recital 2 of same.275 Moreover, the Claimant stresses that, because the CVP-Eni MoU "summarizes the agreement in principle reached between [CVP] and [Eni]",276 it confirms that "these entities engaged in negotiations regarding the termination of the Corocoro AA before the Respondents assumed the activities of the Project on 26 June 2007".277 For the Claimant, such engagement in negotiations breached the good faith principle incorporated in Clauses 2.1 to 2.4 and 25.5 of the Corocoro AA.278

1.4 Impossibility to Invoke Force Majeure

201.
Lastly, the Claimant argues that, unlike in the ICC P&H Arbitration, the Respondents cannot rely on the 2007 Nationalization Decree to escape liability.279 The Claimant acknowledges that (to the extent the contractual breaches of the P&H Contracts resulted from actions by the respondents in ICC P&H Arbitration pursuant to the 2007 Nationalization Decree), the Tribunal in that case:

i. held that the 2007 Nationalization Decree was a governmental act "external and not attributable to the [ICC P&H Respondents]", which "consequently preclude[d] their liability for the non-performance" of the [P&H Contracts];280 and

ii. determined that, in any event, the ICC P&H Claimants had failed to establish causation between their losses and the ICC P&H Respondents' purported actions.281

202.
The Claimant submits, however, that the above findings are "unavailable" to the Respondents in the present case by virtue of Clause 28.1 of the Corocoro AA, which had no equivalent in the P&H Contracts, and through which in the present case the Respondents have assumed the risk of being held liable notwithstanding an event of force majeure.282 More specifically, Clause 28.1 reads as follows:

Failure of Party to fulfill any obligation incurred under this Agreement shall be excused and shall not be considered default hereunder during the time and to the extent that such non-compliance is caused by an Event of Force Majeure, except that if the Event of Force Majeure is an act of the Venezuelan State that is not of general applicability, such Event of Force Majeure shall not preclude an action for damages against CVP for the nonperformance of the relevant obligation.283

203.
According to the Claimant, the 2007 Nationalization Decree "squarely" fits the characterization of "an act of the Venezuelan State" which is "not of general applicability".284 The Claimant observes that Venezuelan law draws a clear distinction between acts of general applicability, "which relate to acts of government addressed to an undetermined number of persons", and acts of particular applicability, "which are addressed to a specific person or a determinable group of persons".285 Thus, to the extent that Article 1 of the 2007 Nationalization Decree specifically refers to, inter alia, the "Exploration at Risk and Profit Sharing Agreements of Gulf of Paria West",286 the 2007 Nationalization Decree can only be deemed an act of particular applicability.287 In this context, the Claimant recalls that, in the ICC P&H Arbitration, PDVSA already conceded that the 2007 Nationalization Decree was "'discriminatory, meaning 'not applicable to all enterprises in Venezuela'".288
204.
As such, "the plain text" of Clause 28.1 of the Corocoro AA "precludes Respondents from exonerating themselves from the harm resulting from their non-performance [and other breaches] by pointing to the Nationalization Decree".289 The Respondents must therefore redress all the breaches underlying the Non-Performance Claim, the Surviving Obligations Claim, the Particular Breaches Claim, and the Overall Breach Claim, without any limitation.290

2. The Respondents' position

205.
The Respondents submit that the Claimant's entire case on liability (i.e. its NonPerformance Claim, its Surviving Obligations Claim, its Particular Breaches Claim, and its Overall Breach Claim) rests on the incorrect premise that they "breached contractual obligations to Claimant and that Claimant had a continuing right to receive the benefits of contractual performance".291 The Respondents submit that, after the nationalization of the Claimant's "interests" in the Corocoro Project as of 26 June 2007 by way of the 2007 Nationalization Decree,292 "there were no substantive obligations to be breached by CVP and no substantive rights to be enforced by Claimant under the Profit Sharing Agreement".293
206.
For the Respondents, it is "elementary" that in order for a "debtor to be liable for breach to a creditor, there must be both an obligation that was breached by the debtor and a right of the creditor to demand and receive performance of that obligation".294 As a consequence of the nationalization, however, "neither the obligation nor the right exists in this case".295 Put differently, the issue here is not whether the 2007 Nationalization Decree and all measures thereafter provide an "excuse" for the non-performance of the Corocoro Contracts, but rather that there was nothing to perform: the Claimant was "no longer the owner of the right in question, namely, the interest in the Project and the [AA]", and therefore no longer held "substantive rights to enforce against" the Respondents.296
207.
According to the Respondents, their conclusion is supported by: (i) the writings of Prof. Brewer-Carías, the Claimant's legal expert in this arbitration, who has recognized that the 2007 Nationalization Decree extinguished all covered association agreements and thus expropriated the contractual rights of the corresponding private entities;297 (ii) multiple other Venezuelan law scholars, who explain that upon said expropriation of contractual rights, liability for the payment of just compensation lies on the State and not on the entity sharing contractual privity;298 (iii) French as well as Italian law, which are "influential in Venezuela";299 as well as (iv) "international law generally", which is consistent with Venezuelan law as to the "meaning and effects of the concept of expropriation".300
208.
The Respondents thus argue that, following the nationalization of its interests in the Corocoro Project, the Claimant has "the right to receive compensation from the State". However, they emphasize that, consistent with what the Claimant is "in fact" currently "pursuing in the ICSID Arbitration",301 "it was understood from the outset that international treaties would be the remedy for the adverse consequences of governmental action, including expropriation, and that CVP would not provide any indemnity in this respect".302
209.
In addition to the above general observations, the Respondents also provide the following reply to the Claimant's other contractual claims, as summarized below.

2.1 Surviving Obligations Claim

210.
Regarding the Surviving Obligations Claim,303 the Respondents note the Claimant's reliance on Clauses 8.6, 19.2, and 20 of the Corocoro AA,304 and submit that "a simple reading" of these provisions indicate that they merely "define how the field [was] to be developed and production and revenues [were] to be shared" under the AA.305 They "do not purport to be a guarantee" by CVP that Claimant's interests "[would] never be nationalized".306 Rather, they "create an obligation only in the nature of a negative covenant, that is, that neither party may take action that would cause the other party not to be able to receive its pro rata share of production and revenues under the [AA]"; something that the Claimant has failed to establish.307
211.
Indeed, according to the Respondents,308 the Claimant's "absolutist interpretation" of the Corocoro AA "overlooks the fact that CVP's contractual obligations [thereunder], including the general obligation not to take action to interfere with the enjoyment of other parties' rights, are all subject to and qualified by the provisions of the [AA] referring to Venezuelan law", which in turn "implement the Seventeenth Condition of the Congressional Authorization",309 such as Clauses 13.1, 25.1,310 and 25.4.311
212.
For the Respondents it is thus "difficult to understand how Claimant can argue that CVP or PDVSA breached any contractual obligation when the agreement Claimant alleges was breached itself requires compliance with and is governed by Venezuelan law, and under Venezuelan law that agreement ceased to exist".312 This is even more so "in light of the fact" that the 2007 Nationalization Decree is "indisputably a law of public policy in Venezuela".313
213.
The Respondents thus conclude that the Surviving Obligations Claim is simply not serious. Not only because the "contract provisions in question obviously do not have the meaning Claimant seeks to ascribe to them", but "no provision of the [Corocoro AA] could override mandatory laws of public policy".314

2.2 Particular Breaches Claim

214.
Regarding specifically the first tranche of the Particular Breaches Claim (namely, the non-repayment of the loan to acquire the 35% interest in the Corocoro Discovery),315 the Respondents submit that the repayment of the loan allowing CVP to obtain its initial 35% participation in the Project was conditional. Indeed, Clause 8.5 of the Corocoro AA (upon which the Claimant relies) states that the "principal and interest on such loan shall be payable by CVP solely to the extent of CVP's deemed net after-tax cash flow from the related Development Area".316 In this context, the Respondents stress that "it is undisputed that [said] condition […] was never met" and therefore the Respondents cannot be in breach of the alleged non-repayment.317 In any event, the Respondents point out, "this is not the basis of any request for relief":318 the Claimant's case has "nothing to do with [the loan repayment]".319
215.
As to the second tranche of the Particular Breaches Claim (namely, the replacement of the Project's management structure),320 the Respondents broadly submit that no "damage could arise or has arisen" as a consequence of the "alleged breach" of the "provisions relating to the management and operatorship of the Project".321 According to the Respondents, "[t]he core of this case is Claimant's attempt to impose responsibility on CVP for the Government's nationalization of the Project, which has nothing to do with any of these provisions".322 The Respondents further point out that the Claimant has been unable to "keep its story straight" as to exactly which contractual obligations constitute the basis of its claim, and emphasize the constant variation in the Claimant's position since its Request throughout the proceedings.323
216.
Finally, as to the third tranche of the Particular Breaches Claim (namely, entering into agreements with Eni prior to the termination of the Corocoro AA in January 2008),324 the Respondents reject breaching the Corocoro AA by executing the CVP-Eni MoU and the CVP-Eni Conversion Contract.325 According to the Respondents, the Claimant's position cannot be reconciled with the terms of the 2007 Nationalization Decree and it again "misunderstands the nature of the nationalization process carried out thereunder".326 The Respondents' argument runs as follows:

i. First, unlike Conoco, Eni agreed to "migrate to the new mixed company structure" pursuant to the terms of the 2007 Nationalization Decree (i.e. by 26 June 2007). Thus, "everything CVP did", namely, the execution of the CVP-Eni MoU and the CVP-Eni Conversion Contract, was in implementation of, and in strict compliance with, [the 2007 Nationalization Decree]".327 CVP had no choice but to comply with the 2007 Nationalization Decree and conclude those agreements with Eni.

ii. Second, Claimant's "contemporaneous letters" (dating from 12 April to 4 July 2007), leave "no doubt" as to its "understanding" of both the "nationalization process" and all that the Respondents' actions to that effect were required by the 2007 Nationalization Decree.328 This must include the execution of the CVP-Eni MoU and the CVP-Eni Conversion Contract.

iii. Third, the 2007 Law on Effects of Migration,329 on which the Claimant now incorrectly relies in an attempt to argue that the Corocoro AA was only extinguished on 16 January 2008,330 is in any event irrelevant. On the one hand, Conoco's pleadings in both the ICC P&H Arbitration and the ICSID Arbitration denote Conoco's "clear understanding" that its interests in Venezuela were "nationalized", "expropriated", "confiscated", or "complete[ly]" and "final[ly] tak[en]" as of 26 June 2007; not 16 January 2008.331 On the other hand, as "Conoco has repeatedly recognized in all documents before this Tribunal", the Law on Effects of Migration simply "confirmed" the expropriation that had already taken place by means of the 2007 Nationalization Decree.332 Its purpose was to "complete" the migration process by "put[ting] an end" to a "provisional regime", whereby the companies that had agreed to migrate by 26 June 2007 (such as Eni) could "continue conducting petroleum operations using the [AA] mechanism […].333 As such, the 2007 Law on Effects of Migration purported "to allow time for an orderly migration until the issuance of the decrees transferring the rights to exercise primary activities to the [new] mixed companies",334 namely, the 2008 Transfer Decree.335

iv. Fourth, "since it is undisputed that there was no production at Corocoro during 2007", the Claimant suffered no damage from any action prior to the 2008 Transfer Decree. At the most, the Claimant was "deprived" of having to "pay its share of any cash calls", which could hardly be considered damage.336

2.3 Force majeure and Clause 28.1 of the Corocoro AA

217.
The Respondents further contest the Claimant's characterization of the content and effects of Clause 28.1 of the Corocoro AA as a provision that prevents the Respondents from relying on the 2007 Nationalization Decree in order to preclude all liability with respect to the alleged breaches of the Corocoro Contracts.337 According to the Respondents, while contractual parties may "expressly agre[e] to allocate to the State company the burden of providing compensation for [an] expropriation" (an agreement that "may […] alter the conclusion that claims for breach of a contract extinguished by an expropriation are not sustainable against the State company party to the contract"),338 Clause 28.1 of the Corocoro AA is not an example of an agreement to such a "super-indemnity".339 To the contrary, "risk allocation clauses" such as Clause 28.1 of the Corocoro AA must be "strictly construed".340
218.
In particular, the Respondents submit that the Parties understood from the very outset that, contrary to the P&H Contracts, the Corocoro Contracts would "not provide for any indemnity by CVP in favor of the [Investors] in the event that the Government exercised its sovereign rights in a manner that had an adverse impact on the Project or the [Investors] themselves".341 During the bidding process concerning the New Areas,342 "[n]early every company […] requested an economic stabilization clause" (ideally containing an "indemnity of the type in the [Petrozuata AA]") to be inserted into the Model AA.343 However, PDVSA's consultants advised against the insertion of such clauses on the basis that, inter alia, there was no specific authorization for such a clause in the Congressional Authorization.344 Instead, PDVSA was advised to "include a clause in the Association Agreement confirming the applicability of Article 1160 of the Civil Code and the understanding of the Parties that Article 1160 effectively provides for a renegotiation right if economic circumstances substantially change".345 This consideration was accepted by PDVSA and included in the Model AA Memorandum (transmitted to all potential bidders, including Conoco).346
219.
Moreover, the Model AA also referred to international investment treaties as mechanisms to protect investors against changes in Venezuelan law.347 Notably, Clause 25.5 of the Corocoro AA refers to both Article 1160 of the VCC and to investment treaties:348

Without limiting the generality of Clause 25.1 [stating that the governing law is Venezuelan law,] the Parties hereby acknowledge the applicability of Article 1160 of the Venezuelan Civil Code to this Agreement and that accordingly all obligations hereunder shall be performed in good faith and in accordance with equity, custom and law. The Parties also acknowledge the applicability of any international treaties relating to the mutual protection of foreign investment to which Venezuela and any country of which an Investor is national may now be or hereafter become parties.349

220.
In light of the above, the Respondents submit that the Parties clearly understood that international treaties would be the remedy available to the Investors for the adverse consequences of governmental action with respect to the Corocoro Project.350 What is more, granting now the Claimant an additional remedy which PDVSA explicitly denied during the bidding process would materially change the terms and conditions upon which Conoco entered into the Corocoro Project.351 As such, Clause 28.1 of the Corocoro AA cannot be of any assistance to the Claimant and is "irrelevant", given that the "Claimant is alleging breaches of obligations that were extinguished by the nationalization", which in turn left the Claimant with "no interest in the Project to protect or enforce".352
221.
In any event, the Respondents argue that the premise for the Claimant's reliance on Clause 28.1 of the Corocoro AA is incorrect: contrary to the Claimant's contention,353 the 2007 Nationalization Decree is not an act of particular applicability.354 The fact that Article 1 of the 2007 Nationalization Decree provides for a list of "companies and agreements" is immaterial.355 Indeed, this list merely "confirms that the [2007 Nationalization Decree] applied to all companies operating outside the legal framework of the 2001 Hydrocarbons Law", which "confirms" its character of "general applicability".356
222.
According to the Respondents, it is "well established under Venezuelan law", which is "consistent with French and Italian law on this point",357 that "a law has a general character when the same legal regime applies to every person who falls within the factual circumstances of that law, regardless of the greater or lesser number of individuals that are affected. The general character of the law is not lost by the fact that the law establishes a particular, special or exceptional regime to a group of persons whose conduct falls within the conditions established in the law. In fact, even 'special norms' maintain the character of generality".358
223.
In this context, the Respondents point out that the 2007 Nationalization Decree was issued as an "act with rank, effect, and force of law", making it a "true legislative act", as opposed to an administrative act.359 As a consequence, pursuant to, inter alia, Prof. Brewer-Carías's writings outside this arbitration, the 2007 Nationalization Decree shares the "same fundamental normat[ive] status as the laws" enacted by the legislator.360 The Claimant's attempt to distinguish between administrative acts of general and particular applicability for the purposes of Clause 28.1 of the Corocoro AA361 is therefore similarly "irrelevant in this case", given that the 2007 Nationalization Decree is not an administrative act.362
224.
Nevertheless, to the extent that the classification of administrative acts is at all deemed relevant, in the Respondents' view the 2007 Nationalization Decree would still qualify as an act of "general effect" and as a "general act", as opposed to an act of particular effect. Referring once more to the writings of the Claimant's expert, Prof. Brewer-Carías,363 the Respondents contend that "the classification of administrative acts as acts of general effects or acts of particular effects depends on their normative or non-normative content and the classification of general or individual administrative acts depends on the recipients of the acts".364 Thus, given that the 2007 Nationalization Decree "creat[ed] rules of conduct that are part of the [Venezuelan] legal system", and was aimed at "a plurality of individuals" (i.e. all the existing associations remaining outside of the legal framework of the 2001 Hydrocarbons Law), its characterization as an act of "general effect" and as a "general act" is unquestionable.365 Simply put, the 2007 Nationalization Decree could not have been more generally applicable, as its scope covered all possible entities and associations (without any distinction between them) operating outside the empresas mixtas regime established through the 2001 Hydrocarbons Law.
225.
In this last respect, the Respondents reject the Claimant's assertion that it is "common ground" between the Parties that the 2007 Nationalization Decree is not of general applicability.366 First, relying on references to the ICC P&H Arbitration, the Respondents note that "PDVSA and its subsidiaries have always made clear their position that [the 2007 Nationalization Decree] is an act of general applicability".367 Second, PDVSA's concession in the ICC P&H Arbitration that the 2007 Nationalization Decree constituted a "Discriminatory Action" under terms of the compensation provisions in the P&H Contracts is irrelevant: "the contractually agreed upon definitions of 'Discriminatory Actions' under the Petrozuata and Hamaca Association Agreements have nothing to do with the concept of a law of general applicability under Venezuelan law".368

2.4 No causation

226.
The Respondents further submit that in any event none of the Claimant's contractual claims "can be sustained because the indispensable element of causation is lacking".369 Thus, absent causation, there can be no liability under Venezuelan law.370 The Respondents' argument is three-fold:

i. First, since the ICC P&H Arbitration, there has been no disagreement between the Parties and their experts that causation (i.e. the cause-and-effect relation between an alleged breach, as the cause, and the resulting damage, as the effect) is one of the constituent elements of civil liability under Venezuelan law.371

ii. Second, the Tribunal in the ICC P&H Arbitration established that the standard of causation under Venezuelan law is that of "adequate causation".372 It subsequently held that the adequate, direct or immediate cause of the ICC P&H Claimants' loss was not the purported actions by the ICC P&H Respondents, but rather the nationalization of ICC P&H Claimants' interests in the P&H Contracts by the Venezuelan Government.373

iii. Third, despite the disagreement between ICC P&H Parties as to the applicable standard to the element of causation, in light of the ICC P&H Award, the Claimant now recognizes that the "test under Venezuelan law is that of 'adequate causation'".374 However, the Claimant incorrectly assumes that the Respondents' actions are the adequate cause of the Claimant's damage in the present case.375 The foregoing ignores that, as "in the [ICC P&H Arbitration], the adequate cause of Claimant's loss here is the nationalization" by Venezuela of its interests in the Corocoro Project.376

3. Analysis

227.
At the outset, the Tribunal notes that the Claimant's Non-Performance Claim, Surviving Obligations Claim, Particular Breaches Claim, and Overall Breach Claim (the "Contractual Claims"), are largely determined by the characterization and effects of the 2007 Nationalization Decree and its subsequent implementation.
228.
Indeed, the Parties' dispute regarding the Non-Performance Claim deals with the issue of whether the Respondents may excuse any failure to perform the Corocoro Contracts on the basis that the 2007 Nationalization Decree itself required such conduct. In turn, although the Claimant submits that each of the Contractual Claims constitutes an individual breach of the Corocoro Contracts,377 the Surviving Obligations Claim is hardly distinguishable from the Non-Performance Claim. As stated by the Claimant itself, the primary basis of the Surviving Obligations Claim is precisely the Respondents' alleged non-performance of the Corocoro Contracts.378 By that measure, whether or not the Respondents may invoke the 2007 Nationalization Decree to excuse any breach of their obligations that arguably survived the termination of the Corocoro Contracts, is equally determinant. The same goes for the Particular Breaches Claim. This is of relevance given that the Parties disagree on whether the actions under such head of claim were required by, or were the natural result of, the 2007 Nationalization Decree.
229.
In this context, the Tribunal notes that the Claimant now takes "full account" and even invites the Tribunal to "stay faithful" to its determination in the ICC P&H Arbitration that, as a matter of Venezuelan law, the 2007 Nationalization Decree is an external and non-attributable act to the Respondents.379 Considering that Venezuelan law is also applicable here,380 it follows that, in principle, the Respondents may rely on the 2007 Nationalization Decree to preclude their liability for any breach of the Corocoro Contracts incurred pursuant to said Decree. However, the Claimant submits that Clause 28.1 of the Corocoro AA prevents the Respondents from invoking the 2007 Nationalization Decree in that manner. Therefore, according to the Claimant, the Respondents must be deemed liable for all of their breaches of the Corocoro Contracts, irrespective of the above characterization of the 2007 Nationalization Decree as an external and non-attributable act.
230.
It is thus apparent to the Tribunal that the success of the Contractual Claims hinges on the Tribunal ultimately making either of the following alternative findings:

i. First, that the 2007 Nationalization Decree is an act "not of general applicability" in accordance with Clause 28.1 of the Corocoro AA and that, therefore, the Respondents may not avoid liability in the present case for any non-performance or positive breach of the Corocoro Contracts on the basis that they were acting (or not) in compliance with such Decree (and its subsequent implementation).

ii. Second, that the claimed breaches of the Corocoro Contracts are not the result of the 2007 Nationalization Decree, but instead attributable directly to the actions of CVP or PDVSA.

231.
The above two alternative findings are indispensable to the Claimant's case even if the Tribunal were to reject the Respondents' argument that no contractual breach has occurred because, following the expropriation and extinguishment by the 2007 Nationalization Decree of the Corocoro Contracts (and the contractual rights and obligations therein), there were no substantive obligations to be breached and, by consequence, no rights to be claimed or enforced by the Claimant.381 Indeed, even if the Tribunal were to disagree with the Respondents and conclude that the Claimant may claim compensatory damages for the Respondents' breaches of the Corocoro Contracts (notwithstanding the extinguishment of the same), the Claimant must still establish that the Respondents' alleged contractual liability is not precluded by an external and non-attributable cause or force majeure, such as the 2007 Nationalization Decree (and its implementation). The foregoing appears to be clear to the Claimant, particularly with respect to the Particular Breaches Claim.382
232.
In this context, the Tribunal will first consider the Contractual Claims assuming, arguendo, that the Claimant retained the right to seek compensatory damages for the alleged breach of the Corocoro Contracts, despite the extinguishment and expropriation of the latter. If the contractual requirements for the Claimant's Contractual claims are met, the Tribunal will then consider the question of whether the Claimant can at all claim for contractual breach of the Corocoro Contracts after the implementation of the 2007 Nationalization Decree. Such approach is, in the Tribunal's view, both logical and procedurally efficient, particularly considering that the Respondents' expropriation argument (as a defense against the Contractual Claims) in any event requires an analysis interpreting Clause 28.1 of the Corocoro AA.
233.
Indeed, referring to Clause 28.1 of the Corocoro AA, the Respondents acknowledge that "the one exception" which may (but does not on the facts of the present case) "alter the conclusion that claims for breach of a contract extinguished by an expropriation are not sustainable against the State company party to the contract[,] is the case where the contracting parties have expressly agreed to allocate to the State company the burden of providing compensation for the expropriation".383 According to the Respondents, "it is evident that Claimant fully understands this point, as it places heavy reliance on Section 28.1 of the Profit Sharing Agreement, the force majeure clause".384 The Respondents submit, however, that "Section 28.1 does not operate as an indemnity for governmental action" and that, without such an "express indemnity", there can be "no breach of contract arising out of post-nationalization conduct because the debtorcreditor relationship between the parties no longer existed".385
234.
The analysis of Clause 28.1 of the Corocoro AA therefore not only appears essential to the Claimant's contractual claims, but also to the Respondents' expropriation defense. Such an analysis, however, necessitates assuming as a first step that the contractual provisions of the Corocoro AA, including Clause 28.1, remain in place (notwithstanding the 2007 Nationalization Decree) and at all allow for a potential cause of action for breach of contract. Otherwise, the assessment of Clause 28.1 of the Corocoro AA as – to use the Respondents' language – the possible "one exception" to the Respondents' defense, would be hindered.
235.
Accordingly, the Tribunal will divide its analysis of the Contractual Claims into three parts. The first part (3.1) focuses on the Non-Performance Claim and, in particular, on whether, as a matter of contract, the Claimant may invoke Clause 28.1 of the Corocoro AA in order to hold the Respondents liable for any non-performance or breach prompted by the 2007 Nationalization Decree. The second part (3.2) considers the Surviving Obligations and Particular Breaches claims, and whether such alleged breaches and the resulting harm are directly attributable to the Respondents (as opposed to their implementation of the 2007 Nationalization Decree). If either of the previous two queries is answered affirmatively, the third part (3.3) will then deal with the issue of whether the Claimant may claim compensatory damages for any breach of the Corocoro Contracts, despite the expropriation of the Corocoro Project and the alleged extinguishment of the Corocoro Contracts.

3.1 Non-Performance Claim

236.
The Claimant argues that, from 1 May 2007 onwards (i.e. when PDVSA assumed full operation control over Corocoro Project and thus replaced the Claimant as Operator of the Project),386 the Respondents "completely ceased to perform the Corocoro AA".387 According to the Claimant, this "total non-performance" constitutes a "prima facie breach" of the Corocoro Contracts.388 In support of its contention, the Claimant refers to the ICC P&H Arbitration, where the Tribunal determined that an outright nonperformance occurred with respect to the P&H Contracts (which was deemed a breach of the same). According to the Claimant, such finding is equally apposite in the present case.389
237.
The Tribunal accepts that, pursuant to Article 1271 of the VCC, Venezuelan law imposes an obligation (of result) on parties to perform their contractual undertakings.390 However, the Tribunal also considers that the Claimant's reliance on the ICC P&H Award to argue the non-performance by the Respondents of the Corocoro Contracts is problematic. First, the ICC P&H Arbitration concerned two extra heavy crude oil projects in the Orinoco Belt that, unlike the Corocoro Project: (i) involved no previous exploration activities; and (ii) at the time of issuance of the 2007 Nationalization Decree, were already in commercial production.391
238.
Second, the Claimant has not explained or provided sufficient evidence as to what exactly comprises the Respondents' alleged full non-performance of the Corocoro Project in circumstances where the Corocoro Discovery had not yet reached production. In sum, the Tribunal is of the view that the circumstances that led to the conclusion that the P&H Contracts were not performed from 1 May 2007 onwards, do not necessarily inform or determine the existence of the same or a similar nonperformance in the instant case.
239.
That said, as pointed out by the Claimant,392 the Respondents have not contested the Non-Performance Claim on such grounds (i.e. the fact of non-performance in itself). While the Respondents submit that non-performance cannot be at issue in the context of extinguished and thus non-existent contracts,393 it seems that they have not offered any alternative argument, nor rebutted the Claimant's factual allegation that CVP and PDVSA ceased to perform the Corocoro Contracts since May 2007. As pointed out by the Claimant, the "Respondents' contestation of the [Contractual Claims] arises at a later stage of the analysis, not at the stage of breach. They do not contest their alleged non-performance from the 1st of May 2007".394
240.
In short, while the Claimant's Non-Performance Claim remains factually uncontested, it nevertheless needs to be determined by the Tribunal. In the ICC P&H Arbitration, the Tribunal recognized that, "when parties enter into a contract, the least that is expected in terms of the result sought to be achieved, is that the contract will be performed per se; and failure to perform or obstructing performance would hinder the achievement of this result".395 The same is applicable here. The Tribunal thus determines that, to the extent that the Respondents have not performed the Corocoro Contracts from 1 May 2007, they have committed a prima facie breach of the same as of that date.
241.
In this context, the issue turns to whether the Respondents' non-performance was caused by or attributable to the 2007 Nationalization Decree. If so, save for any contractual arrangement to the contrary (which the Claimant argues was precisely the function of Clause 28.1 of the Corocoro AA),396 the implementation of the 2007 Nationalization Decree in principle precludes the Respondents' liability for their prima facie breach of the Corocoro Contracts.
242.
In this regard, as repeatedly explained by Prof. García Montoya at the Hearing, the Corocoro Contracts became impossible to perform as from 26 June 2007.397 Prof. Brewer-Carías agreed.398 For the Tribunal it is thus clear that such permanent impossibility to perform is attributable to and caused by the 2007 Nationalization Decree and the direct assumption by PDVSA of all of the Associations' primary activities.399 Therefore, recalling that the 2007 Nationalization Decree is extraneous and non-attributable to the Respondents, any failure to perform the Corocoro Contracts by the Respondents from 26 June 2007 onwards is henceforth excused pursuant to the figure of causa extraña under Venezuelan contract law.400
243.
The question that arises is whether the above conclusion equally applies to the period between 1 May 2007 (i.e. the date from which the Respondents' non-performance commenced)401 and 26 June 2007—a query that must be answered in the affirmative. Indeed, the Tribunal notes that the Claimant rightly at no point has argued that the Respondents' non-performance is directly attributable to them (as opposed to the 2007 Nationalization Decree). The Claimant does make this argument in relation to its Particular Breaches Claim,402 but not with respect to its Non-Performance Claim. Accordingly, and considering that the Claimant has not provided any details as to what exactly comprises the Respondents' non-performance (beyond alleging a complete lack of any performance without distinguishing the cause), the Tribunal concludes that any obligation not performed by the Respondents between 1 May 2007 and 26 June 2007 was also rendered impossible to perform by the 2007 Nationalization Decree. This is more so recalling that, pursuant to Article 3 of the Nationalization Decree, PDVSA assumed full operational control of the Corocoro Project from 1 May 2007 onwards.403
244.
The Claimant's Non-Performance Claim thus boils down to the interpretation and application of Clause 28.1 of the Corocoro AA ("Clause 28.1"). In particular, the said claim is contingent on the Tribunal determining that Clause 28.1 is a contractual mechanism preventing the Respondents from invoking the 2007 Nationalization Decree in order to escape liability for their non-performance of the Corocoro Contracts.
245.
Clause 28.1 reads as follows:

Failure of Party to fulfill any obligation incurred under this Agreement shall be excused and shall not be considered default hereunder during the time and to the extent that such non-compliance is caused by an Event of Force Majeure, except that if the Event of Force Majeure is an act of the Venezuelan State that is not of general applicability, such Event of Force Majeure shall not preclude an action for damages against CVP for the nonperformance of the relevant obligation.404

246.
In light of the Parties' position with respect to Clause 28.1, the Tribunal considers the following issues to be essential for its decision on the Claimant's Non-Performance Claim:

i. Is Clause 28.1 a risk-allocation clause?

ii. If so, was Clause 28.1 designed and intended to apply to a risk (i.e. an uncertain future event) that renders performance of the obligations in the Corocoro Contracts impossible or otherwise precludes the continuation of the Corocoro Project, such as the 2007 Nationalization Decree?

iii. If so, is the 2007 Nationalization Decree an act "not of general applicability" falling under the purview of Clause 28.1?

247.
In addressing each of the foregoing essential issues regarding Clause 28.1, the Tribunal need not and will not determine: (i) whether and when the Claimant's rights and interests in the Corocoro Contracts and/or the Project itself were expropriated; or (ii) the effects of such expropriation.
248.
As stated above, the Tribunal's current analysis makes the assumption that the provisions of the Corocoro Contracts have effect notwithstanding the expropriation.405 For this reason, the analysis will focus on whether the Claimant's Contractual Claims and, in the present instance, the Non-Performance Claim, amount to a breach of the Corocoro Contracts attributable to the Respondents. At this stage of the analysis, the qualification of the 2007 Nationalization Decree (or of any subsequent acts adopted by Venezuela thereafter) as expropriatory or not, is irrelevant. In other words, what matters at this juncture is not so much whether the 2007 Nationalization Decree amounts to an expropriation, or which of the Claimant's rights were taken by the Decree. Rather it is whether the Decree's application (i) made it impossible to perform the obligations under the Corocoro Contracts; (ii) brought about the termination or extinguishment of the same; and/or (iii) precluded the continuation of Corocoro Project as a whole. That said, for ease of reference and following the Parties' example as per their submissions, in the following sections the Tribunal occasionally employs the term "expropriation" (without ascribing any specific legal significance to such term) when alluding to an act of government that renders the contractual obligations impossible to perform.

a. The characterization of Clause 28.1 as a risk-allocation clause

249.
The Claimant argues that, whereas other association agreements entered into during the Apertura Petrolera, such as the P&H Contracts, protected investors from state measures through the "discriminatory action" partial indemnification provisions ("DA"), the Corocoro AA offers "investor protection" in the form of the "contractual allocation of risk" found in Clause 28.1.406 In particular, the Claimant submits that Clause 28.1 was inserted into the Corocoro AA "in lieu" of the "partial indemnity" available under the DA provisions, in order to "make clear" that CVP would be liable for breach of contract even if its failure to perform could be "attributable" to a "governmental act".407 Thus, according to the Claimant, the assumption of risk in Clause 28.1 offers an even "greater" protection from governmental action than the DA provisions, as the compensation in the latter was limited by a specific formula or cap.408
250.
The Respondents in turn argue that no "equivalence" exists between the "express indemnities" in the P&H Contracts and Clause 28.1.409 For the Respondents, the fact that an eventual compensation under Clause 28.1 is not limited by a particular formula "does not transform that provision into an indemnity for expropriation".410 They submit that the Claimant's attempt to utilize Clause 28.1 as some sort of "super-indemnity" against expropriation "flies in the face" of both its text and the drafting history of the Corocoro AA (which expressly rejected the inclusion of such an indemnity for governmental action).411
251.
The Tribunal considers that the dispute between the Parties with respect to the nature of Clause 28.1 is ultimately immaterial. For the reasons set out below, the characterization of Clause 28.1 as a risk-allocation clause should not be controversial.
252.
To begin with, the Claimant does not argue, and rightly so, that Clause 28.1 provides for an indemnity.412 Unlike the DA provisions in the P&H Contracts, Clause 28.1 does not contain an established or determinable compensation in case a particularly defined event takes place. Contrary to the general purpose of indemnity clauses (such as the DA provisions), Clause 28.1 does not in itself create liability (in the form of a duty to compensate) due to the occurrence of a pre-determined circumstance. Rather, it excludes liability should either Party fail to "fulfill" its obligations if the "non-compliance is caused" by an "Event of Force Majeure" (as this term is defined in Article 28.2 of the Corocoro AA and thus applicable in the context of the Corocoro Contracts only). Clause 28.1 then lifts such possible exclusion of liability by CVP if the event of force majeure is "an act of the Venezuelan State that is not of general applicability".413
253.
This being said, a clause need not necessarily provide for an indemnity for it to be considered a risk-allocation clause. In the Tribunal's view, all that is required is a risk (i.e. an uncertainty of a future event and ensuing damage), an allocation between the contractual parties as to how to deal with such risk, and the identification of who will bear its consequences. For the reasons stated below, these elements are present in Clause 28 of the Corocoro AA.
254.
First, Clause 28.1 recognizes that an Event of Force Majeure may cause a party's failure to fulfill its obligations. At first glance, this seems like a mere restatement of the law. However, Clause 28.2 Corocoro AA provides certain examples that will qualify as a Force Majeure Event even if "foreseeable".414 Thus the clause creates a "risk", as it covers circumstances that might not otherwise be considered an extraneous cause (causa extraña) for which liability is precluded under general Venezuelan contract law.415
255.
Second, Clause 28.1 allocates the assumption of the aforementioned risk to the compliant party. That party may not claim compensation for the other party's failure to perform an obligation (as the failure cannot "be considered a default"), if such "noncompliance" is "caused" by an "Event of Force Majeure" as defined in clause 28.2 of the Corocoro AA, unless: (i) the non-compliant party is CVP; and (ii) the Event of Force Majeure causing CVP's failure to fulfill its obligations under the Corocoro AA is an act "not of general applicability".416
256.
In other words, Clause 28.1 allocates the risk of a contractually defined force majeure to the compliant party, except if such an Event of Force Majeure is an act "not of general applicability" and the non-compliant party is CVP, in which case the risk is allocated to CVP (in the form of a possible damage claim). It is thus clear to the Tribunal that Clause 28.1 constitutes a risk-allocation clause; its effect is to disregard, in certain instances, the requirement of causation to find liability or the contractual obligation to cover a certain risk. This conclusion was also affirmed by Prof. García Montoya, the Respondents' expert, at the Hearing.417
257.
The Tribunal further acknowledges the Respondents' submission that nothing in Clause 28.1 can be construed as an indemnity against the expropriation of the Corocoro Project.418 However, just as risk-allocation clauses need not provide for an indemnity,419 their existence is not predicated on the allocation of a specific risk, such as the possible expropriation of the contract or its termination. Contractual parties are free to select the risk to assume and to establish the terms of how to allocate the said risk. The exception to this general rule would be mandatory rules of law requiring a particular formulation for a clause to be considered a risk-allocation provision, or limiting party autonomy with respect to a particular risk.420 That said, neither Party has alluded to any such overriding rule of Venezuelan law that might be applicable to this case.
258.
The Respondents' complaint that Clause 28.1 does not provide for an indemnity against expropriation is thus inapposite to assess whether Clause 28.1 is a riskallocation provision or not. The same goes for the Claimant's contention that, inter alia, Clause 28.1 was introduced into the Corocoro AA as some sort of unrestricted equivalent to the DA provisions.421 These types of arguments address not the existence of a risk-allocation clause, but possibly its characterization and definitely its scope and purpose; an issue to which the Tribunal turns next.

b. The scope and purpose of Clause 28.1 as a risk-allocation clause

259.
The Respondents have provided numerous authorities stating that risk-allocation clauses must be "strictly construed".422 The Tribunal agrees and notes that, as stressed by the Respondents, the Claimant has made no assertion or provided any authority to the contrary.423 Therefore, should "doubts arise in relation to [the] scope" of Clause 28.1, the Tribunal shall "restrict [its] interpretation in every way possible".424 The text of Clause 28 of the Corocoro AA reads in full as follows:425

XXVIII
FORCE MAJEURE

28.1 Failure of Party to fulfill any obligation incurred under this Agreement shall be excused and shall not be considered default hereunder during the time and to the extent that such non-compliance is caused by an Event of ForceMajeure, except that if the Event of Force Majeure is an act of the Venezuelan State that is not of general applicability, such Event of Force Majeure shall not preclude an action for damages against CVP for the nonperformance of the relevant obligation.

28.2 For the purposes of this Agreement, an "Event of Force Majeure" shall mean any event or circumstance, other than lack of finances, beyond the reasonable control of and unforeseeable by the Party obligated to perform the relevant obligation, or which, if foreseeable, could not be avoided in whole or in part by the exercise of due diligence, including but not limited to strikes, boycotts, stoppages, lockouts and other labor or employment difficulties, fires, earthquakes, tremor, landslides, avalanches, floods, hurricanes, tornadoes, storms, other natural phenomena or calamities, explosions, epidemics, wars (declared or undeclared), hostilities, guerrilla activities, terrorist acts, riots, insurrections, civil disturbance, acts of sabotage, blockades, embargoes, or acts of state or any governmental body.

28.3 If any Party cannot comply with any obligation stipulated herein because of an Event of Force Majeure, such Party shall notify the other Parties in writing as promptly as possible giving the reason for non-compliance, particulars of the Event of Force Majeure and the obligation or condition affected. Except as provided in Clause 28.1, any obligation of a Party shall be temporarily suspended during the period in which such Party is unable to perform by reason of an Event of Force Majeure, but only to the extent of such inability to perform. The obligations of the Parties to perform as provided by this Agreement through facilities not affected by the Event of Force Majeure shall continue. The Party affected by the Event of Force Majeure shall promptly notify the other Parties as soon as such event has been removed and no longer prevents it from complying with its obligation, and shall thereafter resume compliance with the Agreement.

28.4 The Party which has given notice of an Event of Force Majeure shall endeavour to mitigate the effects of such Event of Force Majeure on the performance of its obligations. Where an Event of Force Majeure continues for more than sixty (60) days, the Parties shall meet to review the situation and its implications for operations and to discuss the appropriate course of action in the circumstances.

28.5 Subject to the thirty-nine year limit on the term of the Agreement specified in Clause 21.1, if an Event of Force Majeure occurs that substantially impedes exploration, evaluation, development or exploitation activities, the relevant Exploration Period, the Evaluation Period or the Operation Period will be extended by an amount of time equal to the period during which such event is in effect. In each case, such extension will be only with respect to any affected Blocks or Development Areas. If either Phase of the Exploration Period is extended pursuant to this Clause 28.5, CVP shall not be entitled to draw on any letter of credit, guarantee or financial undertaking delivered by an Investor pursuant to Clause 6.9 until the end of such Phase as extended hereby, but only if such Investor provides a replacement of or amendment to such letter of credit, guarantee or financial undertaking, in form and substance satisfactory to CVP, ensuring that CVP's rights at the end of the extended Phase will be the same as the rights it would have enjoyed at the end of the original Phase had no such extension occurred.

28.6 The Investors, or the relevant Participating Investors, may at their option, by notice to CVP, suspend either Phase of the Exploration Period, any Evaluation Period or any Operation Period if:

(a) operations in all or any portion of the Area (or the relevant Evaluation Area or Development Area) are substantially impeded for a period of at least sixty (60) days due to the absence of a permit required under Venezuelan law for such operations; and

(b) the Investors, or such Participating Investors, have taken and are continuing to take reasonable measures to obtain such permit in accordance with relevant laws and regulations (including without limitation submitting all documents and information to relevant governmental authorities that are reasonably capable of submission at the relevant time).

During the suspension, all operations in the (in the case of an Exploration Period), the relevant Evaluation (in the case of an Evaluation Period) or the relevant Development Area (in the case of an Operation Period) must be discontinued, except that activities necessary or useful to obtain the relevant permit may continue. Any such suspension will be lifted either (i) at the option of the Investors, or the relevant Participating Investors, or (ii) if the Investors fail to continue to take reasonable measures to obtain the relevant permit, at CVP' s request. The relevant time period will recommence upon the lifting of the suspension . Time lapsed during the suspension will not count against the relevant time-period. The suspension will not under any circumstances extend the overall 39-year limit on the duration of the Agreement.

260.
From the above it is evident that the Parties' agreement on contractually defined Force Majeure Events (possibly affecting the Corocoro Project) extends considerably beyond Clause 28.1. It is Clause 28 of the Corocoro AA in toto, as opposed to Clause 28.1 in isolation, which deals with the notion of force majeure. In this context, the Tribunal observes that while the Parties have exchanged detailed submissions on Clause 28.1 and the phrase act "not of general applicability" therein,426 comparatively little attention has been paid to how Clauses 28.3 to 28.6 of the Corocoro AA might inform the interpretation of the scope of Clause 28.1.
261.
Having reviewed the Parties' submissions on the interaction between Clause 28.1 and the remaining provisions of Clause 28 of the Corocoro AA (together the "Force Majeure Clause"), the Tribunal notes that, according to the Respondents, the Force Majeure Clause "assumes the continuation of the contract".427 In particular, the Respondents refer to some clauses of the AA that evidence that the Parties did not contemplate events of permanent effects and stress how: (i) Section 28.3 deals with a "temporary suspension" of the contract's obligations during the period of the Event of Force Majeure; (ii) Section 28.4 deals with the "mitigation" of the effects of the Force Majeure Event and the need to discuss the "implications for operations" and the "appropriate course of action" in case the Event of Force Majeure continues for more than 60 days; (iii) Section 28.5 deals with the possible extension of periods under the contract equal to the period of the Force Majeure Event; and (iv) Section 28.6 addresses possible suspension by the "private parties" if a required permit for petroleum operations is missing, to allow time for such "private parties" to request and diligently pursue such permit.428
262.
In view of the terms of Clauses 28.3 to 28.6, the Respondents submit that, "on its face", the Force Majeure Clause "only concerns" the issue of whether a Party may invoke an Event of Force Majeure to "excuse" non-performance of an "existing contract".429 For the Respondents, it follows that the Force Majeure Clause, including Section 28.1, cannot survive the termination of the Corocoro Agreement, as it "makes no sense to talk about the concept of force majeure with respect to performance after termination of the agreement, just as it makes no sense to talk about continuing performance after such termination".430 Likewise, Section 28.1 cannot be deemed a risk-allocation provision somehow protecting the Claimant against expropriatory acts, as "[n]othing in Section 28 contemplates the extinction of the agreement by operation of a law of public policy".431
263.
The Claimant acknowledges that Clauses 28.3 to 28.6 of the Corocoro AA concern a "temporary suspension" of activities and/or the steps to be taken by a Party whose performance has been inhibited by a contractually defined Event of Force Majeure.432 Nonetheless, the Claimant submits that these "specific provisions" do not limit the definition of an Event of Force Majeure in Clause 28.2 of the Corocoro AA, which "plainly encompasses an expropriation" by referring to "acts of state or any governmental body", as acknowledged by the Respondents and their expert.433 Thus, considering that the applicability of Clause 28.1 is contingent on the definition of Clause 28.2, and that, "as here", the expropriation was "effectuated" by an act "not of general applicability",434 the Force Majeure Clause overall contemplates and as such allocates the risk of the expropriation of the Corocoro Contracts to the Respondents.435A contrario, the Claimant contends that the Force Majeure Clause "plainly does not exclude" a scenario in which the Corocoro Project has been "expropriated".436
264.
For the reasons set out below, the Tribunal finds the Respondents' position on the present issue more convincing.
265.
First, the Claimant misrepresents the Respondents' position when stating that the Respondents and their expert concede that an expropriation is an event covered by the Force Majeure Clause. The Respondents do "agree that a governmental act of general applicability is a force majeure" under Clause 28.1, but only "to the extent that" Clause 28.1 "applies".437 However, they submit that, "after the expropriation of Claimant's interests in the Corocoro Agreement", the "Claimant no longer had any rights to enforce against CVP under that Agreement", rendering the Clause 28.1 issue "moot".438 In other words, according to the Respondents, Clause 28.1 "deals with the effects of force majeure during the life of the contract, not thereafter ".439 In this last respect (i.e. the applicability of Clause 28.1 during the "life of the contract"), the Respondents stated the following at the Hearing:

As I was trying to make clear, we firmly believe that [Clause] 28.1 is irrelevant, that this Contract was expropriated, the Contract rights were expropriated and transferred. The Investor has no further rights in the Contract, and 28.1 is irrelevant. [Clause 28.1] might be relevant during the course of performance of the Contract if the Government were to say, for example, Conoco, this month you should reduce your production by 50 percent because I want to comply with an OPEC cut or something, and I would rather take it from you rather than from this company or pro rata across all. I target you. That, in my view, is what this clause was really about. It has nothing to do with a nationalization.440

266.
The Respondents' primary submission is therefore that Clause 28.1 "is irrelevant to this case, since Claimant is alleging breaches of obligations that were extinguished by the nationalization and since Claimant had no interest in the Project to protect or enforce once its interests were taken by act of the State".441 In the alternative (i.e. "If the Tribunal were to consider this a case of breach"), the Respondents argue being "excused" by the Force Majeure Clause, as the 2007 Nationalization Decree would then be an act of "general applicability" pursuant to Clause 28.1. It is only in this second and alternative context that professor García Montoya stated at the Hearing that the 2007 Nationalization Decree would be "contemplated" by Clause 28.1.442 Thus, contrary to what the Claimant attempts to portray, Prof. García Montoya did not make a blanket statement suggesting that the Force Majeure Clause "plainly encompasses an [event of] expropriation".443
267.
Second, the Claimant's argument that the "temporary suspension" of the Parties' obligations under the Corocoro AA pursuant to Clauses 28.3 to 28.6 of the Corocoro AA in no way limits the definition of a "Force Majeure Event" set out in Clause 28.2 of the same,444 is unpersuasive. The Claimant is right that, so long as an "act of state or any governmental body" is "beyond" the non-compliant party's "reasonable control" and "unforeseeable" to it (or if foreseeable then unavoidable), then such an act is deemed an "Event of Force Majeure" under Clause 28.2 of the Corocoro AA.445 Formally speaking, an expropriation would meet the foregoing criteria. The fact remains, however, that Clause 28.2 of the Corocoro AA is merely descriptive. It only defines the circumstances that, on their face, are considered an "Event of Force Majeure" for "the purposes of [the Corocoro AA]".446 It has no bearing on the effects of the defined "Event of Force Majeure", on how, for how long, and to what extent its occurrence may impact the Corocoro Project or the compliance with the Corocoro Contracts, or on how the parties to the Corocoro AA allocate that risk. Alone, Clause 28.2 of the Corocoro AA has no effect. Rather, by defining what an "Event of Force Majeure" is, its function is to serve as a reference-point to the Force Majeure Clause in full. Indeed, Clauses 28.1 and 28.3 to 28.6 all develop the notion of "Event of Force Majeure".
268.
Accordingly, just as any other provision of the Force Majeure Clause, Clause 28.2 of the Corocoro AA cannot be interpreted in isolation. A harmonious interpretation of the Force Majeure Clause as a whole indicates that its text is incompatible with and thus cannot cover an "act of state" (such as an expropriation) that frustrates the performance of the entirety of the Corocoro Contracts and precludes the continuation of the Corocoro Project.
269.
As already established, Clause 28.1 states that, generally, the failure to perform an obligation under the Corocoro AA "shall not be considered a default" if "caused by an Event of Force Majeure". Therefore, save for when the "Event of Force Majeure" is an "act of the Venezuelan State that is not of general applicability", the main rule is that damages may not be claimed from the non-compliant party. However, that is only the case "during the time and to the extent" that the "Event of Force Majeure" precludes compliance. Notably, Clause 28.1 itself does not give content to either the terms "time" and "extent" therein, whereas the remaining provisions of the Force Majeure Clause do (notwithstanding the fact that, in principle, these terms would become moot in case of a full expropriation of the Corocoro Project).
270.
Thus, with respect to the "time" factor, Clause 28.3 states that the "obligations" of the non-compliant party shall be "temporarily suspended".447 This is now common ground between the Parties.448 Regarding the "extent" factor, Clause 28.3 goes on to clarify that "the obligations of the Parties to perform […] through facilities not affected by the Event of Force Majeure shall continue". Again, both of these provisions become superfluous or, at least, without effect, should the "Event of Force Majeure" be one of the full expropriation of the Corocoro Project.
271.
Similarly, as noted by the Respondents,449 Clause 28.4 imposes a duty on the non-compliant party to mitigate the effects of an "Event of Force Majeure". In addition, going to the issue of "time", Clause 28.4 requires the parties to confer, review the situation and "implications for operations", and discuss the "appropriate course of action", in case the "Event of Force Majeure" lasts for over 60 days. Importantly, both the mitigation and conferring obligations are required irrespective of whether the "Event of Force Majeure" is an act of "general applicability" or not. Regardless, both of these obligations become irrelevant when faced with an expropriation. Indeed, there is nothing to mitigate or operate and no course of action left once the performance of all aspects of the Corocoro AA has been rendered impossible.
272.
On both the issues of "time" and "extent", Clauses 28.5 and 28.6 state that, subject to the 39-year term of the Corocoro AA,450 an "Exploration, "Evaluation" or "Operation Period" shall be "extended" or might be "suspended", in case an "Event of Force Majeure" occurs that "substantially impedes" exploration, evaluation, development or exploitation respectively, "by an amount of time equal to the period during which such event is in effect", and "only with respect to" the "affected" Block or Area "or any portion of" the same. This is significant for two related reasons:

i. On the one hand, Clauses 28.5 and 28.6 indicate that, while the parties envisaged a mechanism to account for "Events of Force Majeure" that could "substantially impede" the Project's exploration, evaluation or production activities, they remained silent on events that could entirely preclude such activities altogether, in all present and conceivable future Blocks or Areas of any kind.

ii. On the other hand, by providing for an extension of time or a suspension of the relevant exploration, evaluation or production "Period", Clauses 28.5 and 28.6 suggest that the Force Majeure Clause is "confined in its application to events which are capable of resolution within that particular time-frame".451 Accordingly, "an event which renders further performance 'unthinkable'", as would be the case of an outright expropriation, "may therefore not fall within its scope".452

273.
In short, strictly construed, none of the provisions of the Force Majeure Clause can be given effect when faced with an event, such as the 2007 Nationalization Decree, rendering the performance of all obligations in the Corocoro Contracts impossible and barring the continuation of the Corocoro Project. The Tribunal thus finds that the text of the Force Majeure Clause (including Clauses 28.1 and 28.2 therein) is inapposite in the event of an expropriation. As stated by the Respondents, the Force Majeure Clause "has nothing to do with a nationalization".453
274.
The Claimant's argument that the Force Majeure Clause "plainly does not exclude" the expropriation of the Corocoro Project changes nothing,454 particularly considering that this provision warrants strict construction. For events as drastic as an impossibility to perform an entire contract, the lack of an exclusion is insufficient. Certainly, "[t]he more catastrophic the event, the less likely [it] is that a clause will be held to cover the event which has occurred, unless particularly clear words are used".455 As seen above, however, the Force Majeure Clause contains no such clear language and, to the contrary, its provisions appear at odds with the notion of expropriation.
275.
In addition, although not determinative, the Tribunal also notes that the Force Majeure Clause stands in stark contrast with the DA provisions in the P&H Contracts. Indeed, unlike the Corocoro AA, the Hamaca AA expressly protected against the "expropriation" of a party's "interest" or "assets".456 Similarly, the Petrozuata AA was designed to "specifically address precisely how the assets and interest of Conoco [would] be valued and reimbursed in the event of nationalization".457 Accordingly, the DA provisions of the Petrozuata AA were carefully drafted to that effect.
276.
That the text of the Force Majeure Clause appears inoperative vis-à-vis the expropriation of the Corocoro Project is also underscored by the fact that this Clause is not among the provisions that, according to Clause 21.5 of the Corocoro AA, would survive the termination of the Corocoro AA in normal circumstances. For ease of reference, Clause 21.5, where relevant, reads as follows:

Upon the termination of this Agreement all rights and obligations of the Parties hereunder shall terminate except for the following rights and obligations which shall survive such termination :

(a) Claims of Party against another Party for damages arising out of acts or omissions of the other Party relating to such other Party's obligations under this Agreement; […]

(c) The provisions of Clauses 7.9, 8.6, 8. 7, XIX, XX (excluding Clause 20.9), XXI, XXII, XXIII, XXIV, XXV, XXVI and ".458

277.
The Claimant concedes that the Force Majeure Clause is not "specifically listed" among the contractual provisions that survive the termination of the Corocoro AA pursuant to Clause 21.5 of the same.459 However, it argues that the survival of the Force Majeure Clause, and of Clause 28.1 in particular, "necessarily stems from Clause 21.5(a), which provides that claims for damages arising out of a Party's acts or omissions would survive the termination of the Corocoro AA".460
278.
According to the Claimant, "if a claim for non-performance of the Corocoro AA can be sustained after its termination, then Clause 28.1—which addresses whether a defense to a claim can be asserted—must necessarily survive as well".461 Otherwise, the outcome would be "bizarre" and "perverse" in that the "risk" that the Force Majeure Clause was "designed to prevent would itself defeat the protection".462 The Claimant therefore submits that, "in preserving the [surviving] claim", the Tribunal "must evaluate that claim by reference to [Clause] 28.1".463 For the Claimant, its reading is in "both Parties' interest" as, if Clause 28.1 "does not exist" after termination, the Respondents "would themselves have no right to claim force majeure in respect of" a surviving damages claim.464
279.
The Tribunal cannot accept the Claimant's arguments for the following three main reasons. First, Clause 25.1 of the Corocoro AA is precise and clear. It both carefully includes and excludes the exact provisions that the parties to the Corocoro AA expressly intended to survive its termination in normal circumstances, especially at the time the Corocoro AA would reach its agreed term. In this regard, the absence of Clause 28.1 and, for that matter, of Clause 28 in totality, from Clause 25.1 is significant. Indeed, as noted by the Tribunal at the Hearing, such absence may simply indicate that Clause 25.1 only sought to cover some damages claims other than those possibly attributable to or stemming from an "Event of Force Majeure".465 Put simply, Clause 25.1 of the Corocoro AA provides for an exhaustive list of continuing obligations and the Claimant has not provided specific reasons to extend such list, which would be necessary in the present circumstances where a strict contractual interpretation is required.
280.
Second, that the Force Majeure Clause does not survive the termination of the Corocoro AA by no means precludes a party from raising a force majeure defense pursuant to Venezuelan law (as opposed to pursuant to the definition of an Event of Force Majeure in the Corocoro AA) against a surviving claim. A breaching party may be prevented from invoking the way in which a force majeure event has been regulated in a specific contractual provision (here, the Force Majeure Clause and the definition of an Event of Force Majeure therein) but, as confirmed by Prof. Brewer-Carías at the Hearing,466 not from relying on force majeure in general under Venezuelan law. Indeed, that a particular event is not covered by the Force Majeure Clause (e.g., because the event at issue is incompatible with the text of the Force Majeure Clause and the contractual definition of an Event of Force Majeure) does not prevent a party from invoking general Venezuelan contract law and arguing that a particular event constitutes force majeure.
281.
Third, most importantly, the Claimant's argument about the potentially "bizarre" and "perverse" outcome (i.e. that Clause 28.1 must survive the termination of the Corocoro AA because otherwise it would mean that the Parties agreed to a "risk-allocation mechanism that doesn't work when the risk [it was designed for] occurs")467 is circular. The allegedly questionable outcome only arises if one first assumes that Clause 28.1 was designed to account for an Event of Force Majeure, such as the 2007 Nationalization Decree, that could bring about the impossibility to perform all obligations in the Corocoro AA, its termination and/or prevent the continuation of the Corocoro Project as a whole. However, as seen above, the text of the Force Majeure Clause does not support that conclusion and, as expanded below, neither does the drafting history of the Corocoro AA.468