Additional Reply | Claimant’s Reply dated 17 June 2019 as filed by Claimant on 26 June 2019 (designated by Claimant "Claimant’s Statement of Claim") (the designation of submissions in the present Award on Costs follows the designation of submissions in the timetables issued by the Tribunal) |
Agreements | Frame Repair Service Agreement dated 5 August 2009 (CX001) and the Nokia Original Accessory Partner (NOAP) Agreement dated 26 January 2012 (CX002) |
Answer | Respondent’s Answer dated 22 May 2018 |
Claimant | Technoservice Limited, P.O. Box 5867-00200, Nairobi (Kenya) |
Frame Repair Service Agreement | Frame Repair Service Agreement dated 5 August 2009 (CX001) |
ICC Court | International Court of Arbitration of the ICC |
ICC Arbitration Rules | Rules of Arbitration of the International Chamber of Commerce in the version in force as of 1 March 2017 |
ICC General Counsel | General Counsel of the ICC |
ICC Secretariat | Secretariat of the International Court of Arbitration of the ICC |
ICC Secretary General | Secretary General of the ICC International Court of Arbitration (as opposed the Secretary General of the ICC) |
MMO | Microsoft Mobile Oy |
NOAP Agreement | Nokia Original Accessory Partner Agreement between the Parties dated 26 January 2012 (CX002) |
President of the Tribunal | President of the Arbitral Tribunal for the present case |
Chairman of the Court | Chairman of the ICC International Court of Arbitration |
Rebuttal | Respondent’s Rebuttal dated 29 July 2019 |
Request for Arbitration | Claimant’s Request for Arbitration dated 26 March 2018 |
Respondent | Nokia Corporation, Karaportti 3, 02610 Espoo (Finland) |
Reply | Claimant’s submission titled "Claimant’s Statement of Claim", dated 17 June 2019 (the designation of submissions in the present Award on Costs follows the designation of submissions in the timetables issued by the Tribunal) |
Statement of Claim | Claimant’s submission titled "Claimant’s Submission on the Request for Bifurcation", dated 14 January 2019 |
Statement of Defence | Respondent’s Statement of Defence dated 7 March 2019 |
Stock and Asset Purchase Agreement | Stock and Asset Purchase Agreement between Respondent and Microsoft International Holdings BV dated 2 September 2012 (CX030). |
Terms of Reference | Terms of Reference as signed by the Tribunal and the Parties on 2 November 2018 |
i. TEYNIER PIC
Att. of: Mr Pierre Pic
Ms Asha Rajan
Ms Oriane Marion
2 rue Lord Byron, 75008 Paris (France)
ii. KOTIRANTA & CO.
Att. of: Dr Kai Kotiranta
Aleksanterinkatu 19, 00100 Helsinki (Finland)
iii. VALENTINE ATAKA, Advocate
Upperhill Gardens, 3rd Ngong’ Avenue, Nairobi (Kenya)
20 Term and Termination
20.1 This Agreement is effective from 1st January 2009 until 31st December 2009. Thereafter this Agreement will automatically renew for additional one-year terms unless either Party give the other Party notice of non-renewal at least one (1) month prior to the expiration of the then-current term of this Agreement. Notwithstanding the foregoing, a Party may terminate at any time for convenience upon at least three (3) months written notice to the other Party. Neither Party is liable to the other Party as a result of any non-renewal or termination for convenience of this Agreement.
Frame Repair Service Agreement | NOAP Agreement |
22.2 Any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration by three arbitrators in accordance with the Rules of the International Chamber of Commerce. The language used in arbitration, including the language of the proceedings, the language of the decision, and the reasons supporting it, shall be English. The arbitration shall be conducted in Helsinki, Finland. | 25.2 All disputes arising out of or in connection with this Agreement with the exception of Article 19 shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the said Rules. The arbitration shall be held in the city of [add city] [add country]. The language used in arbitration, including the language of the proceedings, the language of the decision, and the reasons supporting it, shall be English. |
22.3 The Parties agree to recognize the decision of the arbitrators as final, binding and executable. The arbitration shall be the sole and exclusive remedy of the Parties to the dispute regarding claims or counterclaims presented to the arbitrators. | 25.3 The Parties agree to recognize the decision of the arbitrators as final, binding and executable. The arbitration shall be the sole and exclusive remedy of the Parties to the dispute regarding claims or counterclaims presented to the arbitrators. |
260. Claimant respectfully requests the Arbitral Tribunal, without prejudice to any other further right or claim to which Claimants might be entitled in this Arbitration, to:
(i) Declare that the Respondent has breached its obligations toward the Claimant under the Frame Repair Service Agreement, the Nokia Original Accessories Agreement and general principles of law.
(ii) Declare that the Respondent without the consent of the Claimant has transferred and assigned the FRSA and the NOAP to Microsoft;
(iii) Declare that the Respondent has breached its duty of loyalty towards the Claimant;
(iv) Declare that the Respondent has violated the Claimant’s legitimate expectation;
(v) Declare that the Respondent has breached the mandatory laws of Kenya ie Constitution of Kenya, Sale of Goods Act, Competition Act and Consumer Protection Act.
(vi) Declare that the Respondent has obtained an unjust enrichment by transferring and assigning the Agreements with the Claimant to Microsoft in breach of its obligations toward the Claimant under the Frame Repair Service Agreement, the Nokia Original Accessories Agreement and general principles of law
(vii) Declare that the Respondent deliberately terminated the Agreement(s) with the Claimant for cause.
(viii) Declare that the Claimant is entitled to receive compensation for all profits, gains and benefits, attributable to the territory of Kenya, obtained by the Respondent as a result of the breach of the Agreements, the breach of the principle of 'duty of loyalty', the breach of the Claimant’s legitimate expectation and breach of the laws of Kenya.
(ix) Order the Respondent to pay damages in the sum of $344,906.00 due to the Respondent denying manufacture warranty on mobile phones sold to end consumers through its authorized distributor in the territory of Kenya, together with applicable interest for late payment.
(x) Alternative to (ix) above an order the Respondent to pay damages in the sum of $270,752.19 due to the Respondent denying manufacture warranty on mobile phones sold to end consumers through its authorized distributor in the territory of Kenya, together with applicable interest for late payment
(xi) Order the Respondent to return to the Claimant, for transferring and assigning the Agreements to Microsoft the unjust enrichment of the amount of:
(a) $16,860,000 including compounded interest of 10% from April 2014, due to the Respondents unjust enrichment based on the 'Contracts’
(b) $61,347,921.00 including compounded interest of 10% from April 2014, due to the Respondents unjust enrichment based on the 'Goodwill'
(xii) An Order that the Respondent compensate the Claimant on full indemnity basis for all costs incurred in relation to the dispute with interest, including costs of the ICC and the Tribunal.
(xiii) An order for compensation for time lost and spent by the Representative of the Claimant.
(xiv) An order for interest on all monies payable from the date when such monies became due on a compounded rate of 10%.
(xv) Any other Order that the Tribunal may find just and proper.
Nokia disputes all of TechnoService’s claims and requests the Arbitral Tribunal:
a) dismiss TechnoService's claims in their entirety, both as to their bases and amounts; and,
b) order TechnoService to bear alone and to compensate Nokia in full for all fees and costs arising out of or relating to this dispute, including the fees and costs of the ICC Court, the Arbitral Tribunal and Nokia's legal advisors, plus interest at the rate specified in Sections 4 and 12 of the Finnish Interest Act beginning to accrue one month from the date of the Arbitral Award.
USD 344,906, in the alternative USD 270,752, for damages due to Respondent denying manufacture warranty coverage;
USD 16,860,000 plus interest "due to the Respondent’s unjust enrichment based on the 'Contracts'";
USD 61,347,000 plus interest "due to the Respondent’s unjust enrichment based on the 'Goodwill'".
76. Subject to the mandatory' provisions of the Finnish Arbitration Act (Arbitration Act of 23 October 1992/967 including the amendments of 12 June 2015 /754), the proceedings shall be governed by the ICC Rules. Where these rules are silent, the Tribunal shall follow any rules which the Parties will have agreed upon with the Tribunal’s consent or, in the absence of such an agreement, conduct the arbitration in such manner as it considers appropriate.
77. The Tribunal is allowed to apply statutory provisions, rules of law or court decisions that are applicable ex officio, whereby it is understood that it shall grant the Parties their right to be heard.
78. Upon deliberation with all members of the Tribunal, the President can sign Procedural Orders alone.
Frame Repair Agreement | Service | NOAP Agreement |
22.1 This Agreement shall be governed by Finnish law. | 25.1 This Agreement shall be governed by and construed in accordance with Finnish law. |
dismissed Claimant’s request for interim relief, finding inter alia that Claimant itself had chosen to discuss certain issues regarding the Frame Repair Service Agreement with Microsoft Mobile Oy;77 however, the Tribunal also instructed Respondent to "refrain from providing MMO or any other third party or entity with copies of written submissions or documents filed in the present arbitration, or with any minutes of meetings of hearings";78
rejected Respondent’s request for security for costs.79
Date | Claimant | Respondent |
26 March 2018 | Request for Arbitration | |
28 March 2018 | Specification of Request for Arb. | |
22 May 2018 | Answer | |
14 Sept. 2018 | Transmission of the File | |
1 October 2018 | Case Management Conference | |
2 November 2018 | Signing of the Terms of Reference | |
21 Nov. 2018 | Case Management Conference | |
23 Nov. 2018 | Case Management Conference | |
7 January 2019 | Statement of Claim | |
8 March 2019 | Statement of Defence | |
11 March 2019 | Decision on bifurcation ("no bifurcation") | |
20 March 2019 | Document production requests | |
29 March 2019 | Document production and/or objections | |
5 April 2019 | Comments on objections | |
10 April 2019 | Tribunal’s decision on open document production requests | |
19 April 2019 | Production of documents according to the Tribunal’s decision | |
5 June 2019 | Reply | |
24 July 2019 | Rebuttal | |
14 August 2019 | Comments | |
4 September 2019 | Pre-hearing Case Management Conference (date remains to be confirmed) | |
4 September 2019 | Comments | |
16-19 Sept. 2019 | Hearing |
rejected Claimant’s request of 17 April 2019 to remove Counsel for Respondent;81
allowed Claimant to submit its Reply on 12 June 2019 instead of 5 June 2019, but dismissed Claimant’s requests for a suspension of the proceedings;82
invited the Parties to specify in the upcoming round of written submissions (Reply and Rebuttal) any non-compliance with the Tribunal’s document production orders and the legal consequences thereof;83
rejected Claimant’s request of 14 May 2019 that the Tribunal reconsider certain decisions on document production;84
denied Claimant’s request to be allowed to enforce the Tribunal’s document production orders through the assistance of state courts.85
USD 344,906, in the alternative USD 270,752, for damages due to Respondent denying manufacture warranty coverage;
USD 16,860 million plus interest "due to the Respondent’s unjust enrichment based on the ’Contracts'";
USD 61,347 million plus interest "due to the Respondent’s unjust enrichment based on the 'Goodwill'".
(i) Mr Steve Ballmer, Microsoft CEO from 2000-2014
(ii) Mr Gerard Brandjes, Nokia General Manager East and South Africa 2007-2010 and Vice President Sub-Saharan Africa 2012-2014
(iii) Mr Matthew Channing, Nokia Head of Care for Sub-Saharan Africa from 2006-2010
(iv) Mr Sherwin Chetty, Nokia Head of Care for Sub-Saharan Africa from 2010-2014
(v) Mr Stephen Elop, Nokia CEO from 2010-2014
(vi) Mr Timo Ihamuotila, Nokia Executive Vice President from 2009-2016
(vii) Mr Nicholas Maina, Nokia Head of Care in Kenya from 2006-2009 (viii) Ms Koki Muia, Nokia Head of Care in Kenya from 2009-2010
(ix) Ms Brenda Okwiri, Nokia Head of Care in Kenya from 2010-2014
(x) Ms Louise Pentland, Nokia Chief Legal Officer from 1998-2014
(xi) Mr Anssi Ronnemaa, Nokia Head of Finance in Dubai from 2011-2014
(xii) Mr Risto Siilassmaa, Nokia Chairman of Board of Directors
(i) Mr Gerard Brandjes
(ii) Mr Matthew Channing
(iii) Mr Sherwin Chetty
(iv) Mr Nicholas Maina
(v) Ms Koki Muia
(vi) Ms Brenda Okwiri
(vii) Mr Anssi Ronnemaa
"might be helpful to establish the facts of the case", whereas the Tribunal found that witness examinations of
(viii) Mr Steve Ballmer
(ix) Mr Stephen Elop
(x) Mr Timo Ihamuotila
(xi) Ms Louise Pentland
(xii) Mr Risto Siilassmaa
would be unlikely to produce meaningful evidence, as these witnesses were "detached from the relevant agreements and the facts of the case".89
granted Claimant’s request for an extension of time dated 28 July 2019, deferring the time limit for the filing of Claimant’s expert report on quantum as well as Respondent’s possible comments and/or rebuttal report;94
denied Claimant’s repeated request of 31 July 2019 regarding the enforcement of the Tribunal’s document production orders through state courts;95
rejected Claimant’s request of 2 August 2019 to strike out the so-called "new claims" in the Rebuttal of 30 July 2019;96
proposed a new Timetable, giving the Parties an opportunity to comment.97
Date | Claimant | Respondent |
26 March 2018 | Request for Arbitration | |
28 March 2018 | Specification of Request for Arb. | |
22 May 2018 | Answer | |
14 Sept. 2018 | Transmission of the File | |
1 October 2018 | Case Management Conference | |
2 November 2018 | Signing of the Terms of Reference | |
21 Nov. 2018 | Case Management Conference | |
23 Nov. 2018 | Case Management Conference | |
7 January 2019 | Statement of Claim | |
8 March 2019 | Statement of Defence | |
11 March 2019 | Decision on bifurcation ("no bifurcation") | |
20 March 2019 | Document production requests | |
29 March 2019 | Document production and/or objections | |
5 April 2019 | Comments on objections | |
10 April 2019 | Tribunal’s decision on open document production requests | |
19 April 2019 | Production of documents according to the Tribunal’s decision | |
17 June 2019 | Reply | |
26 June 2019 | Additional Reply | |
30 July 2019 | Rebuttal | |
1 August 2019 | Case Management Conference | |
30 Sept. 2019 | Comments, including expert report on quantum | |
11 Nov. 2019 | Comments, including expert report on quantum | |
2 December 2019 | Pre-hearing Case Management Conference | |
3-7 Feb. 2020 | Hearing | |
9 March 2020 | Post-hearing Briefs |
dealt with Mr Bulent Gulbahar’s authority to represent Claimant, ordering Claimant to provide evidence of Mr Bulent Gulbahar’s power to represent Claimant alone;100
dealt with Claimant’s request of 5 July 2019, where Claimant had requested leave to seek assistance from state courts for the taking of witness evidence: The Tribunal observed in particular that it had done everything it considered appropriate in order to secure the appearance of the witnesses in Helsinki. If these efforts were not successful, the Tribunal added, this was only due to the unwillingness of the witnesses to appear and to Claimant’s unwillingness to cooperate.101 The Tribunal also observed that the hearing of witnesses was the prerogative of the Tribunal and that the involvement of state courts in the pending proceedings would trigger significant costs. On that basis, the Tribunal ruled that the involvement of state courts was only a remedy of last resort and maintained its decision not to permit Claimant to seek assistance from state courts for the taking of witness evidence102
rejected Claimant’s submission of 22 November 2019, finding that it was lateand Claimant had failed to ask for an extension of time103
provided the Parties with a draft timetable and instructions for the upcoming hearing104
continued to deal with Mr Bulent Gulbahar’s authority to represent Claimant;105
confirmed that the hearing would take place in Helsinki, thereby dismissing concerns which Claimant had expressed earlier, where Claimant had alleged that the safety and security of Claimant’s witnesses would not be guaranteed in Helsinki; 106
confirmed that it had already secured a neutral venue for the hearing.107
concluded in the light of an extract from the Business Registration Service Claimant had submitted on 30 December 2019 that Claimant was duly represented by Mr Bulent Gulbahar;108
dealt with a request for disclosure Claimant had filed on 30 December 2019, where Claimant had sought explanations whether or not the President was relying on the assistance of secretarial services, reiterating that the Tribunal had appointed no administrative secretary, but that the President was using secretarial services for clerical issues (e.g., typing, sending of emails, etc);109
dismissed Claimant’s request of 3 December 2019 that Respondent should be ordered to produce certain originals, finding that the request was, in part, time-barred and also too unspecific;110
dismissed a repeated request made by Claimant that it should be allowed to enforce the Tribunal’s document production orders through the assistance of state courts;111
dismissed Claimant’s request of 5 January 2020 that Respondent and/or the witness Anssi Rönnemaa should be compelled to produce written evidence to prove allegations made in Mr Rönnemaa’s witness statement, finding that the credibility of a witness should be tested through cross-examination.112
On 2 May 2019, the ICC Court extended the time limit until 30 December 2019.116
On 4 December 2019, the ICC Court extended the time limit until 29 May 2020. 117
On 7 May 2020, the ICC Court extended the time limit until 30 June 2020.118
Dear Sirs
TechnoService's submission attached hereto is without prejudice to its assertion that the irregularly and illegally constituted Arbitral Tribunal is now functus officio and its mandate in the Arbitration Case 23513 was terminated with effect from 27 February 2020.
TechnoService initially intended to submit the submission attached hereto, and titled 'Request for Sanctioning and Award of Cost', on 16 January 2020, however, due to the fact that irregularly and illegally constituted Tribunal suspended the arbitration proceedings on the eve of 15 January 2020, TechnoService, consequently, submitted the 'Request for Sanctioning and Award of Cost' to the ICC International Court of Arbitration, as part of its formal objection to the application of Article 37(7) of the ICC Rules, on 10 February 2020.
Since the irregularly and illegally constituted Tribunal purportedly resumed the work in the arbitration proceedings, which is strictly refuted and denied by TechnoService on the basis of the Tribunal being functus officio, TechnoService, hereby, without prejudice and for the sole purpose of protecting its rights submits its 'Request for Sanctioning and Award of Cost'.
If a challenge is filed, it is within the discretion of the tribunal to decide, upon a request made by the challenging party, whether the proceedings should be suspended pending the decision on the challenge.121 In the case at hand, Claimant merely stated in its application of 14 April 2020 that it had challenged the members of the Tribunal, without, however, adducing any reasons beyond this to establish that a suspension was necessary.
Moreover, Claimant’s request for an extension of time relied on circumstances of Claimant’s own making, such as the alleged preparation of Claimant’s challenge dated 13 April 2020.
Finally, the Tribunal considers that a deadline of 14 days is sufficient for the preparation of a cost submission.
However, TechnoService at this point in time is only able to hold the Respondent Nokia accountable and liable for the portion in the amount of EUR 798,955.60 (EUR 678,955.60 plus EUR 120,000.00) for the unnecessary work and cost incurred due to the Respondent’s acts of bad faith, fabricating documents, false and deceiving submission and improper conduct in document production as set out and substantiated by TechnoService in the two submissions titled 'Request for Sanctioning and Award of Cost', dated 20 [recte 10] February and 7 April 2020.
2. Nokia requests that the Arbitral Tribunal:
(i) order TechnoService Limited to compensate Nokia Corporation in full for party representation costs for the arbitration in the amount of EUR 714,318.64, added with delay interest at the rate specified in Sections 4(1) and 12 of the Finnish Interest Act, beginning to accrue one month from the date of the Arbitral Tribunal's order until payment is made; and
(ii) order TechnoService Limited, as between the Parties, to bear alone all the fees and costs of the Arbitral Tribunal and the ICC International Court of Arbitration, and to compensate Nokia Corporation for the same insofar as these are paid from Nokia Corporation's share of the advance on costs, added with delay interest at the rate specified in Sections 4(1) and 12 of the Finnish Interest Act, beginning to accrue one month from the date of the Arbitral Tribunal's order until payment is made.
In the event of the withdrawal of all claims or the termination of the arbitration before the rendering of a final award, the Court shall fix the fees and expenses of the arbitrators and the ICC administrative expenses. If the parties have not agreed upon the allocation of the costs of the arbitration or other relevant issues with respect to costs, such matters shall be decided by the arbitral tribunal. [...]
18. During the suspension period, and without prejudice to the pending challenges, the Tribunal will not attend to any communications unless and until the Secretary General invites the Tribunal to resume its work.
this information made only clear that the Tribunal would not deal with any communications during the suspension period unless invited by the ICC Secretary General. It does not say anything about the procedure, if any, that would be applied in regard of the costs of the arbitration or other relevant issues with regard to costs.
VIII. Filing of written communications and notifications
97. As the present Procedural Order shows, Claimant has repeatedly sent letters to the members or officers of the ICC, the International Court of Arbitration of the ICC and its secretariat even though they concern matters and contain requests falling within the exclusive jurisdiction of the Tribunal. The Tribunal was informed about these letters only because Claimant copied the members of the Tribunal on the email carrying these letters.
98. In Procedural Order No. 15, the Tribunal has already directed Claimant to 'submit to the Tribunal all matters that do not fall within the administrative attributions of the International Court of Arbitration of the ICC' in the future. The Tribunal reaffirms this order. In the future, the Tribunal will not consider letters and/or requests unless they have been properly submitted to the Tribunal and explicitly addressed on their face to the Tribunal.
99. Furthermore, any communication between the Parties in emails or correspondence is not part of the evidential record and has no impact on the present arbitration, regardless whether or not the Tribunal is copied on these correspondences.
In making decisions as to costs, the Tribunal will take into account such circumstances as it considers relevant, including the extent to which a Party has conducted the arbitration in an expeditious and cost-effective manner and complied with time limits as well as Procedural Orders and instructions given by the Tribunal.
repeatedly missed procedural deadlines;
made repetitive and ultimately unsuccessful procedural requests such as, in particular, Claimant’s repeated and unsuccessful requests to enforce the Tribunal’s document production orders through the assistance of state courts, to allow the examination of witnesses by state courts, or to reject Respondent’s Rebuttal dated 30 July 2019;
asked the Tribunal for permission to file an expert report on quantum outside the procedural timetable, requested an extension of time for the filing of the expert report on quantum, and ultimately never submitted any expert report on quantum at all;
repeatedly requested a stay of the proceedings for no valid reason;
failed to cooperate in order to organize the hearing of witnesses at the place of the arbitration;
"withdrew" its consent to hold the hearing in Helsinki even though this had been the place of arbitration agreed in the arbitration agreement and the Terms of Reference; and,
initiated a series of unfounded challenges.
(i) declares that the proceedings on Claimant’s claims are terminated;--
(ii) finds that it has jurisdiction over the Parties’ claims regarding the costs of the arbitration and other relevant issues with respect to costs (Art. 38(6) ICC Rules of Arbitration);---------------------
(iii) orders Claimant to compensate Respondent in full for party representation costs of the arbitration in the amount of EUR 714,318.64 (in words: seven hundred fourteen thousand three hundred eighteen Euro and sixty-four Eurocent), added with simple delay interest at the rate of currently 7% (in words: seven percent) as specified in Sections 4(1) and 12 of the Finnish Interest Act, beginning to accrue one month from the date of this Award until full payment is made;-------
(iv) orders Claimant to bear alone all the arbitration costs fixed by the ICC International Court of Arbitration on 20 May 2020, and to pay Respondent the costs of the arbitration in the amount of USD 492,500 (in words: four hundred ninety two thousand and five hundred US Dollar), added with simple delay interest at the rate of currently 7% (in words: seven percent) as specified in Sections 4(1) and 12 of the Finnish Interest Act, beginning to accrue one month from the date of this Award untii full payment is made; and,---————--------------------
(v) dismisses all other claims regarding costs made in the present arbitration.
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