Exhibit R-DISQ2-1, Communication from ICSID Secretariat to the Parties confirming the constitution of the Original Committee, dated February 3, 2020.
On 3 April 2020, the Original Committee issued an Order on Representation, allowing the continued participation of two parallel sets of counsel for Venezuela, i.e., namely the counsel appointed by Maduro (De Jesús) and counsel appointed by Guaidó (Curtis Mallet-Prevost, Colt & Mosle LLP).
"During the suspension of the proceedings, I was retained to act as co-counsel in a new matter (a commercial arbitration) alongside Three Crowns, which is acting as co-counsel with Freshfields Bruckhaus Deringer in this case. The background of this new matter has absolutely no bearing with the facts of the Conoco case, and I am convinced that my ability to exercise independent and impartial judgment would not be impaired. Nonetheless. I do not wish to disrupt the proceedings. If this engagement is to cause any issue, I am willing to recuse myself from the Conoco case."5
"Judge Hascher and Prof. Fernández Arroyo have taken note on 30 April 2022 of the letter dated 29 April 2022 from Mr. Reinaldo Muñoz Pedroza, Attorney General of the Bolivarian Republic of Venezuela (with its translation into English provided on 9 May 2022). The two Members of the Committee intend to continue serving in these annulment proceedings in fulfillment of their duties under the ICSID Convention with all independence and impartiality."7
(a) Mr. Kim’s disclosure of 14 March 2022, revealed an "absolute lack of a high moral character"9 in terms of Article 14 (1) of the ICSID Convention;
(b) the work of the Original Committee on the merits "had to be well advanced by mid-October 2021"10 and therefore
(c) Mr. Kim took with him in March 2022 "all the confidential and privileged information of over two years of proceedings";11
(d) including "information on the sensitivities of the Remaining Members on each and every issue";12
(e) although Mr. Kim is now "formally excluded from the case [he] remains present in the context of the case";13
(f) because "no reasonable third person knowing that the deliberations and considerations of the Original Committee are in the possession of the Conoco Parties’ Counsel [i.e. Three Crowns] could ever consider that the Original Committee, or any panel in which one of the members of the Original Committee participates, offer any appearance of independence and impartiality";14
(g) alternatively, even "the prospect of the Conoco Parties having access to the works and sensitivities of the Remaining Members of the Original Committee [will result in] constant and unnecessary prejudice and suspicion."15 (Emphasis added)
(a) they have been corrupted by Mr. Kim’s deplorable conduct16 which breached "[the trust of a reasonable third person in the appearance of independence and impartiality] forever and this permeates the Remaining Members of the Original Committee";17
(b) who are "unable to perform their duties";18
(c) because they "will [...] question each and every of their future considerations in light of their past considerations and the prospect that the latter are known by the Conoco Parties";19 (Emphasis added)
(d) disqualification is necessary because "in spite of their best and sincere intentions and beliefs there is simply nothing that the Remaining Members of the Original Committee can do to reverse or remedy this situation";20 because
(e) Mr. Kim’s conduct "irremediably placed the Parties on an unequal footing;21
(f) in addition, the "three-line response" of the Remaining Members to the serious concerns raised by Venezuela’s Attorney General was "laconic and frivolous" and "did not address the Republic’s concerns or the overall situation from which they arose"22 and "reveals an appearance of bias against the Republic."23
(a) the attacks on Mr, Kim are "pointless" as he has already resigned at Venezuela’s request";26
(b) in any event his association with Three Crowns would fall under the IBA’s "Orange List" not the "Red List" thus requiring disclosure but without any implication of the existence of a conflict of interest;27
(c) Mr. Kim made appropriate disclosure then resigned and there is no evidentiary basis for the "conjecture that Mr. Kim has revealed, or will reveal, the Committee’s deliberations thus far;"28 and
(d) Three Crowns’ counsel "represents that Mr. Kim has not done so;"29
(e) thus affirming that Mr. Kim has been true to his Declaration of Confidentiality dated 31 January 2020.30
Venezuela accepts the onus of establishing with respect to each of Judge Hascher and Professor Fernández Arroyo "any fact indicating a manifest lack of the qualities required by Article 14(1) of the ICSID Convention" including "recognized competence", "independent judgment" and "impartiality"31 as set out more particularly in Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela.32 Venezuela does not differentiate between the Remaining Members.
Proposal for Disqualification of Judge Hascher and Professor Fernández Arroyo, fn. 16, Exhibit RL-DISQ2-5, ICSID Case No. ARB/12/20, Decision on the Parties' Proposal to Disqualify a Majority of the Tribunal, 12 November 2013. Venezuela also relies on Exhibit RL-DISQ2-2, Caratube International Oil Company LLP & Mr. Devincci Sa/ah Hourani v. Republic of Kazakhstan, ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of Mr. Bruno Boesch, 20 March 2014, para. 53; Exhibit RL-DISQ2-3, Abaclat and Others v. Argentine Republic, ICSID Case No. ARB/07/5, Decision on the Proposal to Disqualify a Majority of the Tribunal, 4 February 2014, para. 75; Exhibit RL-DISQ2-4, Burlington Resources, Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on the Proposal for Disqualification of Professor Francisco Orrego Vicuna, 13 December 2013, para. 66; Exhibit RL-DISQ2-6, Saint-Gobain Performance Plastics Europe v. The Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/13, Decision on Claimant's Proposal to Disqualify Mr. Gabriel Bottini from the Tribunal under Article 57 of the ICSID Convention, 27 February 2013, para. 56.
Proposal for Disqualification of Judge Hascher and Professor Fernández Arroyo, para. 30; Claimants' Comments on Proposal, para.13. Exhibit RL-DISQ2-7, Suez, Sociedad General de Aguas de Barcelona S.A., and InterAguas Servicios Integrales del Agua S.A., ICSID Case No. ARB/03/17, and Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19, Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal, 22 October 2007, para. 39. See also, Exhibit RL-DISQ2-5, Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/20, Decision on the Parties' Proposal to Disqualify a Majority of the Tribunal, 12 November 2013, para. 60; Exhibit RL-DISQ2-2, Caratube International Oil Company LLP & Mr. Devincci Salah Hourani v. Republic of Kazakhstan, ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of Mr. Bruno Boesch, 20 March 2014, para. 57.
Claimants’ Comments on Proposal, para. 12. Exhibit RL-DISQ2-2, Caratube International Oil Company LLP v. Republic of Kazakhstan, ICSID Case No. ARB/13/13, Decision on the Proposal for Disqualification of Mr. Bruno Boesch, 20 March 2014, para. 55 (citation omitted); see also Exhibit RL-DISQ2-5, Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/20, Decision on the Parties’ Proposals to Disqualify a Majority of the Tribunal, 12 November 2013, para. 61; Annex D, EDF International S.A., SAUR International S.A., and León Participaciones Argentinas S.A. v. Argentine Republic, ICSID Case No. ARB/03/23, Challenge Decision Regarding Professor Gabrielle Kaufmann-Kohler, 25 June 2008, para. 68 (citation omitted).
In a supplementary argument, Venezuela’s relies on Rule 8(1) of the ICSID Arbitration Rules which provides that a member of the Annulment Committee under the ICSID Convention could be disqualified if he or she "becomes incapacitated or unable to perform the duties of his office."37 According to Venezuela, Rule 8(1) covers "any situation or circumstance that would amount to an obstacle in the performance by an adjudicator [...] [including] the duty to treat parties "on an equal procedural footing."38
ICSID Convention, Article 57(emphasis added). Article 14(1), in turn, requires that members of the Panel of Arbitrators shall be persons of high moral character and recognized competence in the fields of law. commerce, industry or finance, who may be relied upon to exercise independent judgment." Although the text of Article 57 refers to disqualification applications made against members of tribunals, it also governs applications to disqualify members of ad hoc committees. Under Arbitration Rule 53, the Rules apply mutatis mutandis to annulment proceedings; in turn, Rule 9(1) incorporates Article 57 in reference to disqualification applications against ad hoc committee members. See ICSID Arbitration Rule 9(1) (A party proposing the disqualification of an arbitrator [or ad hoc committee member] pursuant to Article 57 of the Convention shall promptly, and in any event before the proceeding is declared closed, file its proposal with the Secretary-General, stating its reasons therefor.").
As to the allegation of bias arising out of the Remaining Members "laconic"52 and "frivolous"53 written response to the complaint of Venezuela’s Attorney General, there is nothing in the ICSID Convention or Arbitration Rules (or the particular facts of this case) to require a detailed response to the demand for resignation. Even in Venezuela’s letter of 7 July 2022, it is conceded that the joint communication of 29 June 2022 of the Remaining Committee furnishing explanations on the Proposal for Disqualification:
"falls within the practice of challenged adjudicators to refrain from providing any explanation although Rule 9(3) of the ICSID Arbitration Rules is an invitation that they do so. However established, such a practice does not in any manner foster justice or the integrity of the ICSID system, it aims only at hindering the adversarial nature of the disqualification process and at transforming Rule 9(3) into a shield in order for the challenged adjudicators to protect themselves."54
Venezuela does not allege physical incapacity but argues that each of the Remaining Members are "unable to perform the duties of his office" because they "will question each and every of their future considerations in light of their past considerations and the prospect that the latter are known by the Conoco Parties."55 The Remaining Members are thus trapped by the past participation with Mr. Kim and "in spite of their best and sincere intentions and beliefs there is simply nothing that the Remaining Members of the Original Committee can do to reverse or remedy this situation."56 However, as discussed, the allegations of impropriety on the part of the Remaining Members or the existence of some "taint" by prior association with Mr. Kim lack any foundation in fact and viewing the same allegations under Rule 8(1) does not add anything to Venezuela’s main argument under Article 57.
In the circumstances, it is not necessary to stress the limiting word "manifest" in Article 14(1) as discussed in Blue Bank v. Venezuela because Venezuela has failed to show that the Remaining Members lack independence and impartiality much less "manifestly" lack independence and impartiality. Accordingly, the extra requirement that this lack be "manifest" is not a significant consideration in the analysis.
"the situation created by Mr. Kim and the Conoco Parties' Counsel has irremediably corrupted the integrity of these annulment proceedings as a whole, the works of the Annulment Committee as a collegial body and, by way of correspondence, the ability of the Remaining Members of the Original Committee to fulfill their duties in accordance with the ICSID Convention. Mr. Kim's departure from the case does not cure the irreparable damage that has been caused to the case."57
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