CUSTOMS AND TAX CONSULTANCY LLC, Corporation Trust Center,
1209, Orange Street, Wilmington, Delaware, 19081, United States of America (CTC).
Hereafter referred to as "CUSTOMS", "CTC" or "the Claimant".
5, boulevard Malesherbes
Tel: + 33 1 42 68 48 00
Fax: + 33 1 42 68 15 45
This Company was incorporated in Delaware, in January 2008, for the purpose of this Agreement with the DEMOCRATIC REPUBLIC OF CONGO, by Mr. and Mrs. YAGHI (80%), Mr. 0UTHWAITE (13.5%), M. BIDWELL (6.5%).
THE DEMOCRATIC REPUBLIC OF CONGO, c/o the Minister of Finances,
boulevard du 30 juin, Gombe, Kinshasa, Democratic Republic of Congo (DEMOCRATIC REPUBLIC OF CONGO).
Hereafter referred to as the "DEMOCRATIC REPUBLIC OF CONGO" or the "Respondent".
Aimery de SCHOUTHEETE
LIEDEKERKE WOLTERS WAELBROECK KIRKPATRICK
Boulevard de I'Empereur, 3 Keizerslaan 1000 Brussels
Tel: +32 2 5511472
Fax: + 3225511454
The DEMOCRATIC REPUBLIC OF CONGO acts through its Minister of Finances
The Arbitral Tribunal thus comprises:
HANOTIAU 1 VAN DEN BREG
IT Tower (9th Floor)
480, avenue Louise B9
Tel: +322 290 39 00
Fax: +32 2 290 39 39
Arbitrator appointed by the Claimant.
19, villa Seurat
75014 - Paris
Tel:+ 33 143 20 0775
Fax: + 33 1 43 20 09 13
Arbitrator appointed by the Respondent.
61, rue la Boétie
75008 - Paris
Fax: + 33 1 40 76 02 50
Appointed and confirmed as declared in the arbitral award of July 22, 2015 (the arbitral award).
The Advisor at the ICC in charge of the file is:
Mrs. Marie-Camille PITTON
Mrs. Diamana Diawara
International Court of Arbitration of the ICC
33-43, avenue du President Wilson
Tel: +33 1 49 53 29 51 / +33 149 53 29 28
Fax: +33 14953 57 75
On July 22, 2015, the Arbitral Tribunal comprised:
- Mr. HANOTIAU, professor, arbitrator proposed by the CUSTOMS AND TAX CONSULTANCY LLC (United-States of America), Claimant;
- Mrs. KESSEDJAN, professor, arbitrator proposed by the DEMOCRATIC REPUBLIC OF CONGO, Respondent;
- Mr. FADLALLAH, professor, President, appointed by the International Court of Arbitration of the ICC;
issued a partial arbitral award in the procedure 19515/MCP under the auspices of the Court of Arbitration of the ICC. The partial arbitral award was notified to the Parties on July 22, 2015 and received by the latter on July 23, 2015.
By a letter dated August 21, 2015, the Claimant, CTC, sent to the General Secretariat of the International Arbitration Court of the ICC an "application related to the correction, interpretation and rectification of an omission to rule" concerning the partial arbitral award 19515/MCP notified on July 22, 20155.3
The Court noted that the difference between the basis for calculating CTC's variable remunerations, on the one hand, and the trigger threshold (the "commencement of payments") as stipulated in Articles 3 and 6 of the Financial Conditions concerned two different contractual notions.
The Court established in paragraphs 124, 199 and 203 of the arbitral award that the amount of USD 45,000,000 represents the monthly average revenue for the year 2007 and that it serves as the basis for calculating the variable remuneration.
However, the table on page 102 of the arbitral award shows a different calculation: instead of calculating the difference between the real customs revenues and the base of USD 45,000,000, the table takes into account the difference between the real customs revenues and a higher base of USD 56,443,000, based on the calculations that appear in the Respondent's table on page 100.
The Court was requested to rectify this calculation error and calculate CTC's variable remunerations compared to the "[monthly] average of customs revenues made by the OFIDA" in 2007, i.e. USD 45,000,000 as used by the Court in the aforementioned paragraphs.
CTC requests an additional amount of USD 58,302,371 as its variable remuneration.
In its statement of case, the Claimant made a capitalization request on a monthly basis, which the Claimant believed complied with the Agreement and an alternative capitalization request "in any event according to the terms that the Court shall deem applicable".
The Claimant requests the Court to interpret its arbitral award in that the request for a monthly capitalization of interest was rejected by the Court but however, that the capitalization of interest due to the Claimant by the Respondent for an entire year has not been considered and has therefore not been processed by the Court.
The Court was then requested to process the request for an annual capitalization of interest and to complete its arbitral award in this regard.
French law, which the Court must apply, does not impose that a reference to Article 1154 of the Civil Code be expressly made in the application or the convention. It merely requires that the conditions recalled above be met and that an application for capitalization be made. These conditions are indeed met in the case at hand.
If the Court had believed it had to apply Article 1154 of the Civil Code, the Claimant would have wished to be invited to make its observations on this ground which should thus be considered as a finding of the Court of its own motion.
For the Claimant's application for capitalization "in any event, according to the terms which the Court shall deem applicable" recalled above, the application for the annual capitalization on interest was part of the debate, even if implicitly.
If the Court believed in its power to interpret the arbitral award in this regard and/or had merely involuntarily omitted to consider the application for capitalization in any event "according to the terms which the Court shall deem applicable" including the annual capitalization under the terms of Article 1154 of the Civil Code, the Court may without difficulty complete its arbitral award by application of Article 1485 paragraph 2 of the French Civil Procedure Code applicable in international arbitration by reference to Article 1506 of the Civil Procedure Code.
In summary, the monthly capitalization of interest must be considered as definitively rejected by the Court under the terms of the operative paragraphs of the arbitral award.
The Claimant does however request that the Court interpret the arbitral award - and complete it - in that the same is not applicable for the capitalization of interest due for the entire year under the terms of Article 1154 of the Civil Code and consequently order the capitalization of interest due for an entire year in accordance with Article 1154 of the Civil Code.
In its reply, CTC reverts to the issue of the capitalization of interest by invoking once again Article 1485 paragraph 2 of the Civil Procedure Code except considering that the annual capitalization is not referred to the Court in which case, CTC could invoke it before the Court. CTC is also inquisitive about the Court's ruling on the annual capitalization.
Article 35 of the ICC's Arbitration Regulation, on which the DRC bases its application, only allows for the rectification of clerical errors or errors of similar nature or the interpretation of the arbitral award. Article 35 does not in any way open the way for reforming or revising the arbitral award.
CTC notes that the Arbitral Tribunal decided, in the arbitral award dated July 22, 2015, that the average monthly revenues for the year 2007 were USD 45,000,000 and that when calculating, in another section of the arbitral award, and more specifically in the table on page 102 of the arbitral award, the variable remuneration on the basis of the difference between the customs revenues and a base of USD 56,443,000, the Arbitral Tribunal made a calculation error.
Alternatively, CTC requests that the Arbitral Tribunal "confirm its interpretation of the Agreement as is appears in paragraphs 124, 199 and 203 of the arbitral award and that it draw conclusions from it concerning the Claimant's variable remuneration. The Court should then modify the table of page 102, using USD 45,000,000 - and not USD 56,443,000 - as the calculation base, and modify its provision in consequence" (application for rectification, page 5).
This table complies with the explanations given by the Court concerning this table on pages 97 to 102 of the arbitral award. It clearly appears from reading these explanations that the Court voluntarily, not erroneously, used the table of the DRC (adding various corrections) and it voluntarily applied a 25% increase to the USD 45,000,000.
It is in fact the Arbitral Tribunal's intellectual reasoning that is put into question by CTC.
Likewise, the application for interpretation made by CTC is in fact not an application for interpretation. CTC is not asking the Arbitral Tribunal to interpret its decision but to modify it.
It must also be noted that the arbitral award does not justify in any way an application for interpretation given that there are no doubts regarding the terms of its performance which is the only criteria that could justify an application for interpretation.
As such, CTC, when it bases its arguments on the paragraphs 124, 199 and 203 of the arbitral award (page 2 of the application for rectification) attempts to give to these extracts a significance they do not have. CTC interprets these paragraphs as demonstrating that the Arbitral Tribunal took a stance on the way to calculate the variable remunerations. That is not the case.
In paragraph 124 and more generally in this section of the arbitral judgement, the Arbitral Tribunal rules only on the issue of knowing if, as the DRC contended, the USD 45,000,000 average provided for by the Agreement should be replaced with another average corresponding, in the DRC's theory, to the reality of the revenues prior to the signature of the Agreement. This average is indeed a relevant element for the calculation of the CTC variable remunerations but at this stage of the arbitral award, the Arbitral Tribunal set the amount without yet ruling on the method of calculation of the variable remunerations.
Likewise, the paragraphs 199 and following mainly concern the issue of knowing if the increase in customs revenues compared to the USD 45,000,000 average should be calculated in USD or in Congolese Francs.
It is as from paragraph 204, which opens the section of the arbitral award rightly entitled "Calculation of the variable remuneration", that the Arbitral Tribunal undertakes to decide how the calculation of the variable remuneration should be calculated. In this section the Arbitral Tribunal provides its reasoning on the method of calculation of variable remunerations and, putting this reasoning into practice, calculates the remunerations in the table of page 102.
CTC therefore wrongly considers that there is a contradiction between, on the one hand, the paragraphs 124,199 and 203 of the arbitral award and, on the other hand, the table on page 102 and the section in which the table appears. These different parts of the arbitral award essentially refer to different issues and are not contradictory.
CTC maintains that the Arbitral Tribunal has nonetheless made two calculation errors in the table on page 102 of the arbitral award (application for rectification, page 6).
Indeed, CTC maintains that the table wrongly uses the amount of USD 56,443,000 as corresponding to USD 45,000,000 with a 25% increase when the amount should be USD 56,250,000.
This application also does not comply with the requirements of the ICC Regulation.
Indeed, it bases itself on a new exhibit, namely exhibit C-94, which contradicts Article 35(2) of the Regulation and seeks to obtain the modification of the grounds and operative part of the arbitral award by replacing the table of page 102 established by the Arbitral Tribunal on the basis of the table provided by the DRC.
In its application for rectification (page 7), CTC states that, in its statement of case, it made an application for the capitalization of interest "in two parts", the first part consists in an "application for the capitalization of interest on a monthly basis" and the second part consists in an "alternative application for the capitalization 'in any event, according to the terms that the Court shall deem applicable'".
CTC notes in its partial arbitral award of July 22, 2015, that the Arbitral Tribunal indicated that it "rejects the application for the capitalization of interest" (page 115 of the arbitral award).
CTC asks the Arbitral Tribunal to interpret the arbitral judgment as rejecting the application for the monthly capitalization of interest but as not having considered or processed CTC's application for the annual capitalization of interest and to complete its judgement on this issue.
"Additionally, any interest should be capitalized monthly, as provided for by the Agreement and in any event, according to the terms that the Court shall deem applicable" (statement of case, paragraph 111).
No mention of an annual capitalization of interest is made either in this extract of the statement of case or in any other procedural act or exhibit presented by CTC.
Claiming that the mention "in any event, according to the terms that the Court shall deem applicable" constitutes an alternative application for the annual capitalization of interest demonstrates CTC's distinctly bad faith.
Given that CTC's applications for interpretation and completion of the arbitral award are entirely based on the false pretense that CTC made these applications in arbitration, they must therefore be rejected.
If it was considered that CTC's application for rectification was made as a claim for the annual capitalization of interest, the latter would be new and subsequent to the closing of debates, and should therefore be rejected.
If, by an extraordinary turn of events we considered that CTC, through the aforementioned sentence in its statement of case, made an alternative application for the annual capitalization of interest, this request would once again have been rejected by the Arbitral Tribunal in the judgment of July 22, 2015.
Indeed, as CTC demonstrates, the Arbitral Tribunal declares in this judgment that it "rejects the application for the capitalization of interest".
Even if we were to admit that CTC made an application for an annual capitalization prior to the closing of debates, the fact remains that the Arbitral Tribunal did not in any way omit to rule on the head of this claim.
Furthermore, CTC's developments regarding Article 1154 of the Civil Code are pure speculation and reveal what CTC really reproached of the arbitral award, namely a lack of motivation regarding the issue of capitalization. The lack of motivation does not however justify an application for interpretation.
Lastly, it must also be noted that CTC's application for interpretation aims to obtain the modification of the order in the arbitral award of July 22, 2015, which is contrary to Article 35(2) of the Regulation which, as indicated above (paragraph 6), does not in any way open the way for a revision the arbitral award.
However, Article 1485 paragraph 2 of the French Civil Procedure Code initially applicable to domestic arbitration was extended to international arbitration (Article 1506-4 of the Civil Procedure Code) but only "unless the parties agreed otherwise". This is the case when the parties submitted their dispute to arbitral rules.
CTC's application based on Article 1485 paragraph 2 of the French Civil Procedure Code must therefore be rejected.
In the case at hand, all claims contained in CTC's application for rectification are contrary to Article 35(2) of the Regulation given they go far beyond its scope of application.
All expenses incurred for CTC's application for rectification, including the expenses incurred by the DRC for these observations must therefore be borne by CTC.
In its rejoinder of October 6, 2015, the DRC addresses the issue of the annual capitalization of interest to reject it under Article 35 of the Regulation, 1485 paragraph 2 of the Civil Procedure Code and the exhaustion of the Court's referral which rejected the application for capitalization.
The request on this issue shall be rejected.
Likewise, the alternative application for interpretation, which is groundless and would put in question the final judgment, is rejected as the Court clearly indicated it would add 25% prior to submitting the surplus to the variable remuneration.
Taking into account the fact that the revenues for the month of January 2009 were omitted from the calculations of the Court in the arbitral award, the rectified calculation entitles CTC to an additional remuneration of USD 853,751 which shall be allocated.
CTC did not specifically invoke Article 1154 of the Civil Code. This does not prevent it from claiming, in its application that is being assessed, both that said Article 1154 would implicitly be in the debate and that the Court may have applied it automatically. Responding to the application referred to it and after having recalled CTC's grounds, the Court used the power given to it by CTC. Having noted that the conventional interest was 1.5% per month, the Court decided not to add the capitalization of interest.
There is no reason to interpret or fill an omission to rule.
The Court, ruling upon CTC's application for correction, interpretation and rectification of an omission ruled as follows:
• Rules that the arbitral award rendered on July 22, 2017 has a calculation error that shall be corrected by allocating to CTC an additional amount of USD 853,751
• Rules that this decision corrects paragraph 204 on page 102 of the partial arbitral award
• Reserves the costs of the proceedings
• Rejects any other claim
• Rules that this addendum shall be considered as an addendum to the partial judgment of July 22, 2015.
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