(1) Is the Respondent under an obligation to indemnify the Claimant pursuant to the terms of the Guarantee?
(2) Were the terms of a settlement agreed and concluded between the Claimant and the Respondent, such as to discharge the Respondent's obligations under the Guarantee, as alleged by the Respondent?
(3) Did the Claimant accept by performance the terms of a settlement discharging the Respondent's obligations under the Guarantee, as alleged by the Respondent?
(4) Did the Respondent by performance accept the terms of a settlement discharging the Respondent's obligations under the Guarantee, as alleged by the Respondent?
(5) Is there otherwise a valid and binding settlement agreement such as to discharge the Respondent's obligations under the Guarantee?
(6) If the Tribunal finds there to be no valid or binding settlement agreement, is the Respondent liable to the Claimant for interest? If yes, what is the rate of interest and what is the date such interest started to accrue?
(7) What are the costs of the arbitration and how are they to be allocated?
"Parties have agreed [that] this Memorandum of Understanding becomes binding upon signing by all parties and long form contracts reflecting the terms of this agreement will be executed at a later time..."
(a) In so far as the relevant steps are said to constitute or evidence acceptance of an offer, thereby creating a valid and binding contract where one did not otherwise exist, the Tribunal rejects that contention. The wording of the Draft MOU, as noted above, was clearly intended to encompass the essential terms of any such agreement, but was never finalised or agreed. Importantly, the parties did not sign such document despite the express contemplation in the Draft MOU that they would have to do so in order to give legal force and effect to such agreement. Whilst some of the steps taken may appear to be consistent with agreed terms of settlement, they are likewise consistent with the parties working towards such agreement and showing good faith as part of that negotiating process. Put another way, there is no clear and sufficient 'offer' that such conduct could 'accept'. Further, it is telling in this context that the proposed personal guarantee from SB, contemplated as a key component of any settlement package, was never finalised or executed (We note also that SB has not proffered any personal guarantee in performance of what is, on his own case, his express and strict legal obligation.)
(b) In so far as the relevant steps are said to constitute performance by the parties of the terms of an actual or anticipated settlement agreement, thereby corroborating its existence, the Tribunal rejects that contention. The reasons set out in (a) above are broadly applicable to this alternative analysis of the same evidence. Put simply, and so far as necessary by reference to the Condition Precedent point, the Respondent has failed to demonstrate that the relevant steps taken by the parties clearly and unequivocally show that the parties had reached a valid and binding settlement agreement on (or including) such terms. The conduct in question is equivocal: it is consistent with the parties cooperating and working towards a contemplated settlement agreement, rather than being explicable only on the basis that the parties had reached such agreement. In any event, the relevant steps, viewed objectively in conjunction with the evidence of negotiations, do not support the existence of a legally binding and enforceable settlement agreement.
(c) In so far as the relevant steps are said to create an estoppel preventing the Claimant from denying the enforceability of the alleged settlement agreement, the Tribunal rejects that further contention for essentially the same reasons. The Respondent has failed to establish the essential ingredients to raise an estoppel, including the need for a clear and unequivocal representation made by or on behalf of the Claimant to the Respondent. This requirement is all the more difficult for a party alleging an estoppel with the effect of holding another party to a contract which, according to the principles of contract formation, has (by definition) not come into existence. Put simply, there is no basis for finding in the present case an estoppel to 'create' a contract that would not otherwise exist.
(d) Finally, and for good measure, in so far as the relevant steps are said to constitute or evidence a waiver or variation of the signature requirement in the wording of the Draft MOU, the Tribunal rejects that contention. The conduct in question does not come close to establishing an agreed departure from the express language of the sixth bullet point in the Draft MOU. The Tribunal covers this point out of fairness to the Respondent, no such allegation of waiver or variation having been advanced.
89.1. Pre-Accrued Interest (6 November 2013 to 5 November 2014): US$180,000.
89.2. Post-Accrued Interest (6 November 2014 to 5 November 2015): US$180,000.
89.3. Further Post-Accrued Interest. (6 November 2015 to 21 October 2016): US$172,622.95, being 351 days at a daily rate if US$491.80.
92.1. Interest from 6 November 2013 through to and including the date of this Award (16 December 2016), amounting to a total of US$560,163.80 That figure comprises (i) three full years of interest at US$180,000 per year, ending on 5 November 2016, plus (ii) 41 days of interest from 6 November to 16 December 2016 at the daily rate of US$418.104.22.168. Simple interest on the sum of $1,500,000 from 17 December 2016 until the date of payment at 12% per annum.
"Unless the parties otherwise agree, the tribunal shall award costs on the general principle that costs shall follow the event except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs."
"Unless the parties otherwise agree in writing, the Arbitral Tribunal shall make its orders on both arbitration and legal costs on the general principle that costs should reflect the parties' relative success and failure in the award or arbitration, except where it appears to the Arbitral Tribunal that in the particular circumstances this general approach is inappropriate"
"The Arbitral Tribunal shall also have the power to decide by an award that all or part of the legal or other expenses incurred by a party (the "Legal Costs") be paid by another party. The Arbitral Tribunal shall decide the amount of such Legal Costs on such reasonable basis as it thinks appropriate." (emphasis added)
104.1. Filing fee of £ 1,750.00
104.2 LClA's administrative costs of £ 7,406.64
104.3.Tribunal's fees and disbursements of £40,641 39
104.4.Total costs of the Arbitration £49,798.03
Towards these costs the Claimant has paid £49,798.03 which includes the Registration fee, deposits and interest accrued. The Respondent did not lodge any funds.
We therefore DECLARE and AWARD as follows:
1. The Respondent shall pay to the Claimant the following sums:
(2) Interest accrued as at the date of this Award, namely US$560,163.80
(3) Post-Award simple interest on the sum of $1,500,000 from 17 December 2016 until the date of payment at 12% per annum.
2. It is declared that no legally binding or enforceable settlement or discharge or release of the Respondent's accrued liability to the Claimant under the Guarantee was concluded as alleged or otherwise.
3. The Respondent shall pay the sum of £100,000 to the Claimant in respect of its legal costs and associated disbursements incurred in respect of this arbitration.
4. The Respondent shall pay the sum of £49,798.03 to the Claimant in respect of the LCIA's administrative costs as well as the Tribunal's fees and disbursements
5. All other claims and requests are denied.
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