• The Claimants were invited to submit a reply to the Proposal for Disqualification by 25 October, 2011;
• Mr. Fortier was invited to furnish any explanations that he wished to provide by 8 November, 2011; and
• Within two weeks of the date of any submission by Mr. Fortier, each Party was permitted to submit any further observations that it might wish to make.
[W]e believe it is important to have a full explanation of (i) the extent of Macleod Dixon’s advice and relationship with ConocoPhillips companies, whether in Venezuela or outside of Venezuela, (ii) the working relationship between Macleod Dixon and Freshfields generally and specifically in the arbitrations brought by ConocoPhillips subsidiaries against Petróleos de Venezuela, S.A. under both the Petrozuata and Hamaca Association Agreements, including whether any discussions have taken place concerning this ICSID Arbitration or concerning the relationship between those cases and this Arbitration, (iii) Macleod Dixon’s representation of companies in connection with the 2007 migration process, including the identity of those companies and the nature of the assignments, (iv) the approximate percentage of annual revenues of Macleod Dixon’s Caracas office over the last five years derived from matters in which they were adverse to Respondent or to Petróleos de Venezuela, S.A. or its subsidiaries, (v) a list of all litigation or arbitration matters of Macleod Dixon against the Respondent or Petróleos de Venezuela, S.A. or its subsidiaries, and all assignments preparatory to possible litigation or arbitration, and (vi) the contacts between Mr. Fortier and members of his arbitration team and Macleod Dixon, including any files on which they are or were working together, plans for the coordination of the international arbitration group and the business plan for promoting the combined firm’s expertise in this area.1
In this case, there is no question that Respondent’s disqualification proposal is based on "actual, objective facts’ which are essentially undisputed. Those facts include: (i) the targeting by Norton Rose of Macleod Dixon as a merger partner and the importance of Macleod Dixon’s Caracas office in that regard; (ii) the fact that Macleod Dixon saw the arbitration expertise of the Norton Rose arbitration group in Montreal, the most prominent member of which is Mr. Fortier, as a significant advantage of the merger from its standpoint; (iii) the breadth and significance of Macleod Dixon’s Caracas practice adverse to Respondent and PDVSA and its affiliates, including a major case together with Claimants’ counsel in this case against PDVSA on behalf of ConocoPhillips’s companies arising out of the same association agreements at issue in this case; (iv) the nondisclosure of such circumstances during the course of serious merger negotiations, which obviously took place over a period of months and while the Tribunal has been deliberating; (v) the initial announcement by Mr. Fortier that he thought the merger posed no problem to his remaining a member of the Tribunal; and (vi) the fact that we still have not received answers to the specific questions raised in our prior letters. Collectively, these undisputed facts constitute a "circumstance that might cause [an arbitrator's] reliability for independent judgment to be questioned by a party.' The failure to make disclosure warrants disqualification in this extremely important case.30
An arbitrator is under a duty to make reasonable enquiries to investigate any potential conflict of interest, as well as any facts or circumstances that may cause his or her impartiality or independence to be questioned. Failure to disclose a potential conflict is not excused by lack of knowledge if the arbitrator makes no reasonable attempt to investigate.
I have no knowledge of the issues raised in any of the above matters [about the legal services provided by the Caracas office or Macleod Dixon] and have had no communication regarding these matters other than as strictly required for the purposes of this disclosure.65
He also stated that he had not been involved in any way in the negotiation, that he had not taken part in or been privy to the plans for the international arbitration group in the combined firm, that he had no knowledge of any file, if any exists, on which lawyers from the two firms had been working together and he "categorically" stated that he had no involvement in any such file, nor had he been made privy to any information about any such file. Finally on this matter, he said that he had no knowledge of "the breadth and significance of the matters adverse to the Respondent and PDVSA and its affiliates" (the Respondent’s phrase) almost a year earlier and that he was "only apprised of the professional relationship between Macleod Dixon and ConocoPhillips later in the week of September 26" (see paragraphs 41 and 44-46 above). We note that Mr. Fortier was not asked when he became aware of the "breadth and significance" of Macleod Dixon’s practice adverse to the Respondent and PDVSA and its affiliates, or of any such adverse relationship.
1. The Respondent’s Proposal for Disqualification of Mr. L. Yves Fortier as a member of this Tribunal is dismissed;
2. Issues of costs relating to this Decision will be resolved at a later stage in this proceeding; and
3. As from the date of this Decision, the suspension of the proceeding under ICSID Arbitration Rule 9(6) is terminated.
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