Mr. Rogier Schellaars
Professor B. van Zelst
Mr. B. Dijkmans van Gunst
Mr. D. van Besouw
Mr. B. Keizers
Mr. M. Doornbos
Ms F.M.A. Potter
Van Doorne N.V.
1081 KM Amsterdam
Mr. E. Gaillard t - former counsel
Mr. Y.M.J. Lennartz - former counsel (firstname.lastname@example.org) Mr. K.B.G. Durlinger - former counsel (email@example.com)
22 Rue de Londres
"1. On 11 March 2020, counsel to Exem and Sonangol and the Tribunal convened for the Case Management Conference announced in my1 emails of 26 February and 9 March.
2. The Case Management Conference was preceded by a letter of counsel to Sonangol of 28 February. In this letter Sonangol, in the first place, submits an Amended Short Answer to replace Sonangol's previous Short Answer dated 21 November 2018, alleging 'that Sonangol is entitled to refer issues arising from the SPA and Deed of Pledge to this Tribunal as of right until its Statement of Defence and has a prima facie right to amend the relief it seeks'.
3. The letter continues by requesting that the Tribunal confirm that Sonangol's Amended Short Answer has been received into the record and that it shall replace Sonangol's previous Short Answer dated 21 November 2018. This request was - after Exem's objection in its letter of 6 March - reiterated in Sonangol's letter of 9 March.
4. In the second place Sonangol's letter of 28 February informs the Tribunal of the fact that Exem on 20 February submitted a request for summary arbitral proceedings2 requesting the following relief:
A. to order Sonangol to, per Clause 5 SHA, undertake to distribute Esperaza's profits in the amount of EUR 80 million as most recently proposed by Esperaza's board of directors, or to freeze these dividends pending the resolution of the NAI 4687 matter;
B. to order Sonangol to refrain from enforcing its alleged right of pledge; and
C. to order Sonangol to sign and execute the Settlement Agreement - or to proceed to execution by continuing negotiations.'
5. In the letter Sonangol contends that 'each category of relief constitutes an abusive attempt to circumvent this Tribunal's jurisdiction and undermine Sonangol's due process rights.'
6. The letter further states that 'Exem has failed to explain why its request could not have been brought before this Tribunal: (i) as Exem explained in its request for summary proceedings, the SPA and SHA contain compatible arbitration clauses; and, (ii) in any event, this Tribunal would have jurisdiction to preserve the status quo pending its final decision, including by making interim orders against Sonangol (or, as is more likely, Exem)'.
7. Sonangol concludes by requesting 'this Tribunal to order Exem, pursuant to Art. 35 of the NAI Arbitration Rules, to withdraw its request for summary arbitral proceedings and bring all requests for provisional relief relating to the matters to be determined in this arbitration, including matters arising from the SPA and/or the Deed of Pledge, before this Tribunal.'
8. The Case Management Conference was furthermore preceded by a letter of counsel to Sonangol of 11 March 2020 in which Sonangol, referring to its letter of 28 February, makes the following formal undertaking to this Tribunal:
(i) Pending this Tribunal's first award, Sonangol will not take steps to cause Esperaza to release funds in the form of dividends, except on 15 days' notice to this Tribunal; and,
(ii) Pending this Tribunal's first award, Sonangol will not exercise any rights under the Deed of Pledge, except on 15 days' notice to this Tribunal.'
To this, Sonangol has added that it reserves its right to vary the above undertakings on 15 days' notice to the Tribunal.
9. Having heard the parties and after deliberation, and taking into account the letters of counsel to Exem dated 17 March 2020 and counsel to Sonangol dated 18 March 2020, the Tribunal has taken the following decisions:
I. Ad §§ 2-3. Taking into account that Exem did not oppose Sonangol's wish 'to refer issues arising from the SPA and Deed of Pledge to this Tribunal as of right until its Statement of Defence and has a prima facie right to amend the relief it seeks' the Tribunal holds that Sonangol is so entitled. It is not necessary to decide whether the Short Answer dated 21 November 2018 may be replaced by the Amended Short Answer of 28 February 2020, as Sonangol is entitled to bring up the said issues in its Statement of Defence and Counterclaim and to amend its counterclaim(s) accordingly.
II. Ad §§ 4-7. Taking into account that the hearing in the Summary Arbitrary Proceedings will take place on 13 March 2020, the Tribunal by virtue of Article 35 NAI Arbitration Rules holds by way of provisional relief as follows:
A. Exem is enjoined from discussing the issues A and B mentioned in § 4 in the hearing of 13 March 2020 or in other procedural acts in NAI case 4807 pending this Tribunal's final decision in the present proceedings, because those issues are within the competence of this Tribunal (which can also decide on them by way of provisional relief) and because involving another Tribunal with the same issues may unnecessarily complicate these proceedings and may constitute an abuse of the right to institute separate arbitral proceedings;
B. This order is aimed at a sound administration of the present arbitration proceedings, may be amended if and when required or appropriate and is without prejudice to the determinations to be made in the Tribunal's final decision. No further directions at this stage are required further to address Sonangol's requests as mentioned in § 7 above.
10. The Tribunal notes that at the end of the hearing Sonangol, at the request of Exem, has reiterated its formal undertaking as mentioned in § 8."
"1.1. This Procedural Order no. 2 relates to the Document Requests of 19 August 2020 made by Exem Energy B.V. and by Sociedade Nacional de Combustíveis de Angola, E.P.
1.2. The decisions of The Arbitral Tribunal are contained in two Redfern Schedules attached to this Procedural Order.3
1.3. The decisions must be understood against the following background.
2.1. This case is, in essence, about allegations of corruption relating to several juridical acts concluded between Claimant and Respondent. If the allegations turn out to be correct, those juridical acts may be null and void as being contrary to the 'goede zeden of openbare orde' ('good morals or public order') as per Article 3:40 Dutch Civil Code.
2.2. Corruption is usually difficult to prove, as it more often than not resides in intentions rather than in documents.
2.3. When confronted with transactions which may be in breach of public order, arbitral tribunals have a duty - even ex officio - to fully investigate such violations and must require parties to put forward all relevant - direct or circumstantial -evidence available to them. According to settled Dutch case law [footnote omitted] procedural restrictions hampering this duty to investigate must be interpreted restrictively.
2.4. For these reasons, the Arbitral Tribunal has interpreted the applicable Articles of the Dutch Code of Civil Procedure (843a and 1040), the Arbitration Rules of the Nederlands Arbitrage Institute (27), the IBA Rules on the Taking of Evidence in International Arbitration (3 and 9) and the Procedural Order no. 1 (6.3), allowing a Tribunal to issue an order, at the request of a party, to the other party to produce documents, in a manner sufficiently broad as to warrant that all relevant evidence will be put before the Tribunal.
2.5. In pursuing this goal the Arbitral Tribunal has taken care not to transgress the literal texts of those Articles and to treat both Parties in a fair and equal manner.
3.1. Where Sonangol's requests are granted, the tribunal's decision must be understood in the sense that i) it relates to and binds - apart from Exem itself - all persons and/or companies mentioned in section 28 of Exem's 'General Response to Respondent's requests' of 19 August 2020 (viz. Mr. Dokolo, Exem Holding AG, Exem's directors and Mr. da Silva); and
(ii) that Exem is under a best efforts obligation to obtain the requested documents from all (other) persons and companies mentioned on p. 17-19 of Sonangol's Application for Document Production of 2 September 2020, viz. Exem Africa Ltd, Exem Energia E Investimentos, Ms Isabel dos Santos and Mr. Sarju Raikundalia.
3.2. In the absence of cogent reasons given by Exem the Tribunal assumes that Exem will be able to perform its best efforts obligation.
4. The Arbitral Tribunal reminds Parties of Article 6.4. of Procedural Order No.1: 'If a party fails without satisfactory explanation to produce any document ordered to be produced by the Arbitral Tribunal, the Arbitral Tribunal may, on its own initiative or on the application of any Party and subject always to providing the Parties an opportunity to comment on the specific proposed adverse inference under consideration, infer that such document would be adverse to the interests of that party'.
5. This Procedural Order may be referred to as Procedural Order No. 2 and is aimed at a sound administration of the arbitral proceedings and may be amended if and when required."
For completeness' sake the Tribunal mentions here in summary and following the information provided by the parties in their consolidated lists of exhibits of 3 May 2021 (with the exclusion of exhibits separately numbered as accompanying other exhibits):
Exem has submitted Factual Exhibits C-1 to C-207, Legal Exhibits CL-1 to CL-68, Witness Statements CW-1 to CW-4 and Expert Opinions CE-1 and CE-2.
Sonangol has submitted Factual Exhibits R-1 to R-532, Legal Exhibits RL-1 to RL-218 and Expert Opinions RWE-1 to RWE-3.
"1. The hearing will be held through virtual means. In the present Covid-19 situation travelling is cumbersome and the risk of virus infections may jeopardize the normal course of a physical hearing.
2. The Tribunal will conduct the hearing from a room in the The Hague Hearing Centre. Parties are invited to instruct the service provider(s) to install all necessary technical equipment in that room, including screens on which the transcripts of the court reporter(s) and documents presented during the hearing will be visible. (The arbitrators will bring their own laptop computers with them in order to consult, if necessary, the file of the proceedings.)
3. Order of opening statements: the Tribunal will first hear Exem's opening statement, followed by Sonangol's opening statement.
4. The parties are invited to finalize the hearing schedule, allowing time for the Tribunal to ask questions to the parties and the witnesses.
5. The parties are requested to finalize as soon as possible their discussions on the locations of the testimony of witnesses and on the matter of interpretation.
6. The parties are requested to decide as soon as possible on the issue of calling the expert witness prof. van Kampen.
7. The issue of post hearing briefs will be discussed and decided at the end of the hearing.
8. The matter of the additional documents to be submitted by Sonangol has been decided during the procedural conference. Exem will receive documents as soon as possible and at the latest on 17 May and will react on 19 May; the Tribunal will receive the documents on 17 May and will decide any controversy between the parties on 21 May.
9. Exem's exhibit CW-3(3) (second supplemental witness statement Mr. da Silva) is allowed onto the record.
10. Exem's exhibits C-185 and 186 are allowed onto the record. In reply to Sonangol's letter of 13 May the Tribunal rules that Sonangol is entitled to provide a short written submission on the (ir)relevance and (lack of) probative value of the concerned documents by Monday 17 May with a maximum limit of ten pages. Exem is allowed to file a short reaction.
11. The Tribunal has taken note of Sonangol's suggestion in its letter of 11 May (one but last alinea) and will consider this matter at a later stage.
12. The Tribunal has understood that the parties agree to allow Mr. van Andel to attend the hearing and has no objection."
"This morning at 10:05am CET we received a message from our coordinating counsel at Grosvenor law firm, which email we append (after having only removed Mr. Diz' emailaddress from the cc-field). We append this email, further to internally consulting on the receipt of this letter and contents within Van Doorne N.V., just now. Enclosed with the letter by Grosvenor law firm (Annex A), is a letter by Exem's director Mr. Diz, a copy of which we also append (Annex B). We refer to these annexed letters.
It follows from this correspondence that Mr. Diz - in light of recent developments concerning Mr. Dokolo's estate - is presently not in a position to provide Grosvenor law firm "(..) with information or instructions concerning Exem's position (..)". By extension, Grosvenor law firm takes the position that it is "(..) unable at this time to instruct [Van Doorne] to proceed with the arbitration as Mr Diz is not in a position to provide us with instructions." In light thereof, Grosvenor law firm has made it clear to us, that we must, and we cite again: "(..) seek a short adjournment of the hearing in the NAI 4867 arbitration commencing on 25 May 2021 (..)".
In view of the above, we must now request your Tribunal to adjourn the hearing. It is clear from this letter that we are not entitled to appear and make representations on behalf of Exem, at the hearing scheduled for next week.
We understand from Mr Diz' correspondence that, by September, it is likely that issues concerning succession and beneficial ownership of the Exem shares will have been clarified."
"As the hearing is to commence in less than two business days and various organizational matters are still to be finalized, the Tribunal considers that an urgent decision is needed. The Tribunal expresses its opinion that Exem's request is belated, insufficiently substantiated and/or is unfounded and - in the exercise of its powers to conduct the arbitral proceedings according to standards of good administration of justice - has decided that Exem's request for adjournment is dismissed. After further deliberation, the Tribunal will issue all its decisions regarding pending issues for the hearing on Friday 21 May."
"As the Tribunal has made clear in its letter of 28 October,4 the Tribunal is ill-disposed toward any extension of the deadline of Exem's Statement of Reply and Defence on counterclaims which is not supported by concrete substantiation of circumstances which would justify such extension, as this may lead to indeterminate further delays. Exem's letter does not provide such substantiation nor does it propose a specific new deadline. For these reasons the request is rejected. However, in view of Sonangol's reaction the Tribunal is willing to grant an extension of one week (from 1 December to 8 December 2020), with the further consequences as proposed in that letter.
Exem is invited to inform the Tribunal whether it would accept such an extension (its email of 10 November does not make this clear). If so, the Tribunal will send the parties an amended procedural timetable. If not, the Tribunal prefers to stick to the existing timetable."
"8. Reference is made to Exem's letter of 19 May (22.14). The objections against the submission of Exhibits C-507-522 (sub 1), the Bloomberg article (sub 2) and the documents i-iii is (sub 4) are rejected.
9. Reference is made to Sonangol's letter of 11 May, one but last alinea (relating to formally advising witnesses of a number of points) is not taken up by the Tribunal, as the witnesses if they so desire will be accompanied by counsel for criminal law aspects of the case.
10. Sonangol's request in its letter of 18 May (15.29) 'that the Tribunal order Exem to produce a copy of the share register of its owner, Exem Holding AG, showing the registered holder(s) of the registered shares as well as any further documents identifying the beneficial owner of the company as of 1 May 2021' is rejected, as this fact is of no relevance to the case.
11. Reference is made to Sonangol's letter of 18 May (22.01).
Sub 1 (Mr Brito Pereira's withdrawal from the arbitration): the Tribunal refers to the Procedural Order No. 1 (art. 9.7, last sentence) and grants request (i). At this moment no decision is required on the requests (ii) and (iii).
Sub 2: see § 4 above.
Sub 3: See § 2 above.
Sub 4: See § 9 above.
12. In order to finalize its preparation of the hearing (beginning next Tuesday at 9.30am) after a turbulent week, the Tribunal does not allow any further submissions by the parties, with the exception of information relating to the organization of the hearing and urgent questions in case of unclarity of this Order."
(a) On behalf of Exem:
Legal counsel: Rogier Schellaars, Amsterdam, Van Doorne N.V, Lead counsel to Exem; Bas van Zelst Amsterdam, Van Doorne N.V., Lead counsel to Exem; Diederik van Besouw, Amsterdam, Van Doorne N.V., Counsel to Exem; Bas Dijkmans van Gunst, Amsterdam, Van Doorne N.V., Counsel to Exem; Bas Keizers, Amsterdam, Van Doorne N.V., Counsel to Exem; Fabian van de Ven, Amsterdam, Van Doorne N.V., Counsel to Exem; José Antonio Barreiros, Lisbon, JAB Avogados, Counsel to Mr Da Silva; Ana Rita Relogio, Lisbon, CSA and Partners, Counsel to Mr Raikundalia; Manuel Vaz Loureiro, Lisbon, CSA and Partners, Counsel to Mr Raikundalia.
Witnesses: Mario Filipe Moreira Leite da Silva, Lisbon; José Carvalho Neto, Porto; Sarju Raikundalia, Lisbon.
Experts: Prof. Petra van Kampen, Amsterdam, Utrecht University / FKvG Advocaten; Prof. Sofia Vale, Luanda, University Agostinho Neto.
(b) On behalf of Sonangol:
Legal counsel: Yas Banifatemi, Paris, GBS Disputes; James Herbert, Paris, GBS Disputes; Anders Junker-Nilsson, Paris, GBS Disputes; André Marini, Paris, GBS Disputes; Ashish Mitter, Paris, GBS Disputes; Lodovico Amianto, Turin, GBS Disputes; Carolina Barros, Paris, GBS Disputes; Maarten Drop, Cleber Advocaten, Amsterdam, Experts: Prof. Alex Geert Castermans, Florence, Leiden University; Prof. Matthias Weller, Bonn, University of Bonn; Prof. Dario Moura Vicente, Lisbon, University of Lisbon; Mafalda Estacio, Lisbon, Assistant to Prof. Moura Vicente.
Others: Gentil Pimenta, Luanda, Sonangol, General Counsel; Claudia Garcia, Luanda, Sonangol, Head of Litigation. Cleber Advocaten; Camiel Boersma, Amsterdam, Cleber Advocaten; Merel Vermorken, Amsterdam, Cleber Advocaten; Robert Hein Broekhuijsen, Amsterdam, Ivy Advocaten.
The following persons have been heard as fact witnesses on the part of Exem: Mario Filipe Moreira Leite da Silva, José Carvalho Neto and Sarju Raikundalia.
On the part of Sonangol no fact witnesses were brought forward.
The following persons have been heard as expert witnesses on the part of Exem: prof. Petra van Kampen and prof. Sofia Vale.
The following persons have been heard as expert witnesses on the part of Sonangol: prof. Alex Geert Castermans, prof. Matthias Weller and prof. Dario Moura Vicente. The parties have held closing statements which have been submitted to the Tribunal. The Tribunal has engaged in discussions with the Parties and their fact witnesses and expert witnesses at all stages of the hearing.
The Parties have expressed that they have had a fair opportunity to present their respective cases.
1. to immediately order that Esperaza will not perform any actions in line with the Assessment or otherwise that would adversely affect the position of Exem until the Enterprise Chamber has rendered a decision on this request;
2. to release the Temporary Director from his position as temporary director of Esperaza with immediate effect;
3. and for the duration of the proceedings a. to suspend the A directors appointed by Sonangol (..) and b. to replace the Temporary Director.
«For the reasons set out above, Exem respectfully requests your Tribunal to:
without delay order:
i. Sonangol not to (a) transfer shares in Esperaza and/or (b) to encumber such shares and/or (c) take any action prejudicing Exem's rights to shares in Esperaza and/or (d) take any action aimed at enabling Esperaza to divest its interest in Amorim Energia B. V., all on pain of an immediately payable penalty (dwangsom) of EUR 50 Million; or, in the alternative
ii. Sonangol to give 15 days' notice to the NAI 4687 Tribunal and Exem, of any intention to (a) transfer shares in Esperaza and/or (b) encumber such shares and/or (c) take any action prejudicing Exem's rights to shares in Esperaza and/or (d) take any action aimed at enabling Esperaza to divest its interest in Amorim Energia B.V., pending your Tribunal's decision on the merits, all on pain of an immediately payable penalty (dwangsom) of EUR 5 Million;
or in case of (i) and (ii) such lesser relief and/or lower or amended penalty sum as your Tribunal deems appropriate."
« .., Sonangol respectfully requests the Tribunal to dismiss Exem's Application in its entirety and to order full indemnity costs against Exem at the appropriate juncture. «
a. The Arbitral Tribunal understands Claimant's requests sub (a), (b) and (c) under both (i) and (ii) to relate only to its 40% shareholding in Esperaza. The Arbitral Tribunal considers that Claimant has no sufficient actual interest in pursuing these requests as the shareholding referred to has been arrested by the Public Prosecutor and is further administered by an administrator appointed to that effect by the Enterprise Chamber which provides sufficient guarantees that such shareholding will not be transferred, encumbered or prejudiced by any action Respondent might consider pending the Arbitral Tribunal's award which might dispose of the issue as to the entity that has title to that shareholding ;
b. As to request (d) under both (i) and (ii), the Arbitral Tribunal considers that the requests lack merit as Respondent as a shareholder in Esperaza (1) cannot decide on any divesture of Esperaza's core holding of shares in Amorim Energia B.V. ; (2) cannot give binding instructions to its nominees on the Board of Directors of Esperaza as these nominees have an independent legal obligation to act in the interests of the company ; and (3) cannot give any instructions to the director appointed by the Enterprise Chamber who has an independent obligation to act in the interests of the company and its shareholders considering also the Arbitral Tribunal's pending award as to title of any alleged shareholders to the shares of Esperaza.
c. On the basis of a. and b. above, the Arbitral Tribunal does not consider that any lesser or other relief as sought by Claimant is appropriate.
- On 30 January 2006, Sonangol paid an Amorim affiliate EUR 81,052,300;
- On 14 August 2006, Sonangol paid an Amorim affiliate EUR 105,637,500;
- On 18 September 2006, Sonangol paid an Amorim affiliate EUR 2,310,175.
"shall bear non capitalized interest corresponding to the three months Euribor (without spread; p.a.) interest rate applicable in each period. Such price (principal and interest) shall be set-off through the amounts paid by Esperaza BV as ordinary or extraordinary dividends received by Exem (directly or through a company appointed by Exem) up until the moment when such dividends have been fully paid the outstanding price."
"In respect of Exem Energy BV's claims:
Declare the entirety of Exem Energy BV's claims to be inadmissible;
In the alternative to (i), dismiss the entirety of Exem Energy BV's claims on the merits;
In respect of Sonangol's counterclaims:
(i) Declare the SPA and the Deed of Transfer to be null and void ('nietig');
(II) Declare that Sonangol has remained at all times the rightful owner of 100% of Esperaza or, in the alternative, that Exem never acquired title to the shares in Esperaza numbered 10,921 to 18,200 inclusive;
(iii) In the alternative to (i) above, declare the Payment Agreement to be null and void ('nietig') and to rescind the SPA ('ontbinden');
(iv) In connection with (iii) above, determine that its decision shall take the place of a notarial deed for the transfer by Exem Energy BV of its shares in Esperaza Holding BV to Sonangol or, alternatively, order Exem Energy BV to take all steps necessary to effect such transfer on pain of a penalty of EUR 5,000,000 for each day during which Exem Energy BV should fail to comply with the Arbitral Tribunal's decision or such other penalty as the Arbitral Tribunal may direct;
(v) As a result of (i) or (iii) above, award Sonangol no less than EUR 52,600,000 (plus interest over such amount pursuant to Article 6:119 DCC from 17 November 2017 to the date on which the Tribunal renders its award, and in any event, from the date of the award until the date the award debt is fully satisfied) in respect of dividends paid from Esperaza Holding BV to Exem Energy BV;
(vi) Order Exem Energy BV to pay to Sonangol the full costs of this arbitration, including, without limitation, the fees and expenses of the Arbitral Tribunal, the NAI's administrative charges, as well as Sonangol's legal costs, expenses and experts' fees (plus interest); and,
(vii) Grant Sonangol such further relief as the Arbitral Tribunal deems fit and proper."
"Exem respectfully requests that the Arbitral Tribunal shall award the following relief to Exem by declaring or ordering, as the case may be, that:
A. Exem discharged its payment obligations under the SPA;
B. Sonangol is obliged to accept the retransfer of the Remainder and Interest in kwanzas (on the basis of the nominal amount of the payment made by Exem on 13 October 2017), subsequent to the conditions articulated in para 6.1.5, above;
C. the Deed of Pledge terminated pursuant to clause 13 of the Deed of Pledge, alternatively pursuant to article 3:82 DCC;
D. Sonangol instructs and/or requests its nominees on Esperaza's board of directors to strike the Deed of Pledge from Esperaza's shareholders register in accordance with Article 10.9 of Esperaza's articles of association, on pain of a penal sum (dwangsom) of EUR 100,000, payable at once, per day at which Sonangol fails to comply with the Tribunal's decisions and/or such penal sum as the Tribunal deems appropriate; and
E. Sonangol is liable and obliged to compensate Exem for all costs of these arbitral proceedings, to the fullest extent permitted under Section Six of the NAI Rules."
Ad (i). If anything, rather the contrary is true. The share price before the Galp IPO must have reflected Galp's uncertain financial position at that time, which was considerably improved by the success of the IPO. The effect of that success was an increase of the value of the shares bought by Exem in the amount of € 42,511,742 by 31 December 2006, the date of conclusion of the SPA (see para. 5.16 above). Exem and Sonangol must have been aware of this at that time and yet neither the MoU nor the SPA were amended to reflect such increase.
However, in the light of the whole transaction this cannot be considered as a serious risk on Exem's side. In the system of the MoU Exem had not incurred a risk because it did not need to pay the remainder in case no dividends would be distributed. In the system of the SPA Exem would have had to pay the remainder even in the absence of dividends. However, what if Exem would be unable or unwilling to pay? It did not have sufficient equity.48 Since there were no other securities in place, Sonangol could only have taken recourse against the shares using its right of pledge. In case the shares would not have sufficient market value or yield sufficient proceeds for Sonangol to cover its claim, the risk would be for Sonangol. If the shares would represent sufficient value or yield sufficient proceeds, Exem would have lost the shares and, in a worst case scenario, the down payment. But the down payment would in all probability be a smaller amount than the balance in case the sale proceeds would exceed the amount of the outstanding debt, which balance Sonangol would have to hand over to Exem.
In reality, Exem was hardly exposed and would in all probability even in case of breach of its payment obligations be left with a substantial gain.
In this connection it is also relevant that the Parties in Article 4.3 SPA had waived their right to rescind the SPA, meaning that in case of breach of Exem's payment obligations Sonangol would not be able to recover the property of the shares. An additional circumstance is that Exem, as well as Sonangol, knew at the date of the conclusion of the SPA (31 December 2006) that the IPO of Galp shares was highly successful and that the contracted price at that moment did not reflect the value of the Galp shares indirectly acquired by Exem through Esperaza.
(i) Was the proposal to pay in kwanzas instead of in euros made by Exem or by Sonangol? According to the correspondence exchanged at the time the proposal was made by Exem.54 The Tribunal is not in a position to determine whether in reality the idea came from Sonangol's CFO, as Exem has alleged.55 At any rate, the reason alleged by Exem (Sonangol needed kwanzas on short notice in order to acquit a number of urgent kwanza obligations56) is untenable. First, at the time (2017) there was a shortage in Angola of hard currency, not of kwanzas.57 Second, in spite of the professed urgency the payment term for the kwanza payment strangely enough was extended beyond 31 December 2017, i.e. beyond the due date according to the SPA (which was detrimental to Sonangol).58 Third, the kwanzas were not used for the professed purpose of acquitting urgent debts59 and they were after some months (4 January 2018) retransferred by Sonangol to Exem Investimentos, the Angolan Exem entity that had made the transfer.60
(ii) Another point concerned the question who took the decision to accept the proposal relating to the payment in kwanzas and signed the letter of 31 August 2017 (see para. 6.4 above): Ms Isabel dos Santos or Mr. Paulino Jeronimo (or the latter representing the former), and whether this acceptance was authorised by the Board of Directors. The Tribunal holds that, judging from the face of the document, it is highly probable that both persons were engaged in the decision and the only other relevant fact is that that decision was in fact carried out.
(iii) Did the payment in kwanzas reflect the contractual obligations of Exem? As was mentioned in para. 6.7 above, during the hearing it became clear that the amount of kwanzas paid to Sonangol through Exem Investimentos, an Angolan company owned by Ms Isabel dos Santos on behalf of Exem, which payment was accepted by Sonangol through Ms Isabel dos Santos as a member of the Board of Sonangol (see par.8.12), did not cover the contractual interest obligations of Exem towards Sonangol and that only the principal of the debt had been paid in kwanzas.
Ms Isabel dos Santos not only had direct access to the President of Angola, but also to Mr. Manuel Vicente, who was from 1999-2012 chairman of the Sonangol Board of Directors. Mr. Vicente was raised in the family of President Dos Santos' sister and is rumoured to be the godfather of Ms Isabel dos Santos. From 2012-2017 he was Vice-President of Angola. Mr. Vicente has been implied in a large corruption affair relating to a business project in the oil sector.62 Both the MoU and the SPA are signed by Mr. Vicente on behalf of Sonangol.
There are no indications in the file that Exem's participation in Esperaza was known to the general public. During the Hearing it became clear that the intended transaction between Sonangol and Exem was not disclosed in Galp's IPO prospectus.63
On a more general note, corruption (in particular embezzlement of State property) is endemic in Angola. For as long as Transparency International has included Angola in its Corruption Perceptions reports, Angola has ranked on average in the bottom 8% of all States reviewed.64
According to several news media Ms Isabel dos Santos is engaged in a number of corruption affairs and has acquired a huge wealth through companies in the energy, telecom, cement, diamonds and banking sectors.65
As mentioned in para. 5.5 above, she contacted Sonangol on Mr. Amorim's behalf in connection with the Galp investment. The down payment in the SPA transaction originated from a company (a British Virgin Islands entity) owned by her, Vidatel Ltd. and was paid through Exem Africa Ltd.66 She represented Esperaza (that is, both Exem and Sonangol) in a general meeting of Amorim Energia in 2008, discussing dividend distribution.67 She was active in all stages of the Payment Agreement, which unmistakably testifies to a conflict of interests on her side.68 The kwanzas paid originated from, again, Vidatel Ltd.69 and were paid through another of her companies, Exem Energia E Investimentos.70 Finally, Ms Isabel dos Santos herself has reported to the Portuguese Competition Authority that she has "financial shareholdings" in Esperaza; and she has been publicly reported as claiming ownership interests in Galp.71
(i) First, the Esperaza transaction was aimed at obtaining a 33,34% shareholding in Galp, a major energy company in Portugal which was then state-controlled, with the prospect of listing Galp through a IPO. As indicated above, Portuguese public entities sold their shareholdings in Galp to Amorim Energia with Amorim Energia becoming an anchor shareholder of Galp and preparations for a IPO being made. Sonangol's shareholding in Amorim Energia was disclosed to the market prior to the IPO. However, the IPO prospectus did not mention the MoU and the intentions of Sonangol and Exem to have Exem indirectly hold 18% of Amorim Energy's share capital and Sonangol through the SPA reduce its indirect shareholding from 45% to 27%. The Arbitral Tribunal considers that, from the perspective of market transparency and investor protection on the EU capital market, the MoU ought to have been brought to the attention of regulators and investors.
(ii) Second, the Tribunal's findings and conclusion are corroborated by the actions of Ms Isabel dos Santos as President of Sonangol at the time of the Payment Agreement: (1) with a clear conflict of interests, she was instrumental in Sonangol agreeing to payment in a weak rather than a strong currency enabling her and entities controlled by her or her husband to transfer Angolan currency assets to Sonangol rather than hard currency euro denominated assets with no obvious benefit to Sonangol; (2) she was instrumental in transferring only the principal amount of Exem's debt under the SPA to Sonangol without any interest payments while at the same time executing documents under which Sonangol discharged Exem from its payment obligations under the SPA and ended Sonangol's rights as a secured creditor under the deed of pledge.
It is also true for the Payment Agreement. Evidently, that Agreement would also be null and void as a consequence of the nullity of the SPA, which it was supposed to perform.
The same is true for the Deed of Pledge of 29 December 2006.78
As far as the claim mentioned in para. 7.4 E is concerned (relating to the costs of these arbitral proceedings), reference is made to Section 11 below.
(i) Declare the SPA and the Deed of Transfer to be null and void ('nietig') .
This claim will be awarded.
(ii) Declare that Sonangol has remained at all times the rightful owner of 100% of Esperaza or, in the alternative, that Exem never acquired title to the shares in Esperaza numbered 10,921 to 18,200 inclusive.
This claim will be awarded in its first branch.
(iii) In the alternative to (i) above, declare the Payment Agreement to be null and void ('nietig') and to rescind the SPA ('ontbinden').
This claim will be rejected for lack of interest in the light of (i);
(iv) In connection with (iii) above, determine that its decision shall take the place of a notarial deed for the transfer by Exem Energy BV of its shares in Esperaza Holding BV to Sonangol or, alternatively, order Exem Energy BV to take all steps necessary to effect such transfer on pain of a penalty of EUR 5,000,000 for each day during which Exem Energy BV should fail to comply with the Arbitral Tribunal's decision or such other penalty as the Arbitral Tribunal may direct.
This claim will be rejected for lack of interest in the light of (i);
(v) As a result of (i) or (iii) above, award Sonangol no less than EUR 52,600,000 (plus interest over such amount pursuant to Article 6:119 DCC from 17 November 2017 to the date on which the Tribunal renders its award, and in any event, from the date of the award until the date the award debt is fully satisfied) in respect of dividends paid from Esperaza Holding BV to Exem Energy BV.
This claim will be rejected. It is based on Article 6:277 DCC or, alternatively, on the doctrine of unjust enrichment (Article 6:212 DCC).87 However, Article 6:277 is not applicable as the SPA has not been rescinded on the basis of on-performance. The SPA has been declared null and void, but that has, in itself, not the effect that Sonangol is to be considered as the creditor of the dividends that have been distributed by Esperaza. For the same reason, the Tribunal is not in a position to apply Article 6:212 DCC. Sonangol has not alleged grounds to substantiate the application of that Article. The validity or invalidity of the acts of Esperaza and the possible consequences thereof are not within the remit of this arbitration.
(vi) Order Exem Energy BV to pay to Sonangol the full costs of this arbitration, including, without limitation, the fees and expenses of the Arbitral Tribunal, the NAI's administrative charges, as well as Sonangol's legal costs, expenses and experts' fees (plus interest);
This claim will be discussed in the next section of this Award.
(vii) Grant Sonangol such further relief as the Arbitral Tribunal deems fit and proper.
This claim will be dismissed as the Arbitral Tribunal does not consider that further relief is necessary or appropriate.
|Costs||Of which is VAT|
|NAI administration costs||€ 55,250.00||€ 5,250.00|
|Tribunal fees||€ 479,709.93||€ 83,255.44|
|Tribunal disbursements||€ 290.06||€ 50.34|
|Total||€ 535.249.99||€ 88,555.78|
and will be paid out of the payments with regard to the administration costs and the deposits made by Exem (€ 30,250.00 (inc. € 5,250.00 VAT)) for administration costs + € 171,250.00 for arbitrator fees and disbursements) and Sonangol (€ 25,000.00) for administration costs + € 308,750.00 for arbitrator fees and disbursements).
However, in its Cost Submission88 Exem has alleged that it has paid the costs for the venue of the hearing in The Hague (incl. services). Sonangol has not contested this in its response to Exem's Cost Submission. Therefore, the Tribunal will deduct the amount claimed by Sonangol for the cost of the venue (EUR 17,594.42).
(1) All relief requested by Exem is rejected;.
(2) The Tribunal declares the SPA and the Deed of Transfer to be null and void ('nietig') ;
(3) The Tribunal declares that Sonangol has remained at all times the rightful owner of 100% of the shares in Esperaza;
(4) The Tribunal
- determines that Exem shall bear the costs of this arbitration fixed (according to Article 57(1) NAI Rules) at EUR 535,249.99;
- rules that these costs shall be paid out of the deposits of EUR 171,250.00 made by Exem and EUR 308,750.00 made by Sonangol and the administration costs of EUR 30,250.00 paid by Exem and EUR 25,000.00 paid by Sonangol;
- and orders Exem to pay to Sonangol by virtue thereof the amount of EUR 333,750.00, to be increased with statutory interest on the basis of Article 6:119 DCC as of 23 July 2021 up to the date of full payment;
(5) The Tribunal orders Exem to pay to Sonangol EUR 2,596,286.9689, USD 247,787.50 and GBP 27,635.00 on account of Sonangol's legal and other costs, to be increased with statutory interest on the basis of Article 6:119 DCC as of 23 July 2021 up to the date of full payment; and
(6) The Tribunal rejects any and all other relief sought by the Parties.
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