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Final Award

The following award (the "Final Award"1) is rendered pursuant to the Rules of Arbitration of the International Chamber of Commerce (the "ICC") in force as of 1 March 2017 (the "Rules").

1. PARTIES

1.
Claimants and Respondent are herein referred to separately as a "Party" and collectively as the "Parties."

1.1 Claimants

2.

Claimants in these proceedings are:

[Claimant 1], a Swedish national residing in Sweden, with domicile for the purpose of notices at:

[Redacted]
[Redacted]
Spain

("Claimant 1" or "Mr [Claimant 1]")

[Claimant 2], a Swedish national residing in Switzerland, with domicile for the purpose of notices at:

[Redacted]
[Redacted]
Spain

("Claimant 2" or "Mr [Claimant 2]")

[Claimant 3], S.A., a company incorporated under the laws of Spain and having its registered office at:

[Redacted]
[Redacted]
Spain

("Claimant 3" or "[Claimant 3]")

[Claimant 4] S.L., a company incorporated under the laws of Spain and having its registered office at:

[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]
Spain

("Claimant 4" or "[Claimant 4]")

3.
Claimant 1, Claimant 2, Claimant 3 and Claimant 4 are herein referred to collectively as "Claimants."
4.

Claimants have been represented in these proceedings by:

[Person 1]
[Person 2]
HOGAN LOVELLS INTERNATIONAL LLP
Paseo de la Castellana, 36-38, 1a planta
28046 Madrid
Spain

Telephone: [Redacted]
Emails: [Redacted]
[Redacted]

1.2 Respondent

5.

Respondent in these proceedings is:

[Respondent], B.V., a company incorporated under the laws of the Netherlands and having its registered office at:

[Redacted]
[Redacted]
The Netherlands

("Respondent" or "[Respondent]")

6.

Respondent has been represented in these proceedings by:

[Person 3]
[Person 4]
[Person 5]
GARRIGUES
Calle Hermosilla 3
28001 Madrid
Spain

Telephone: [Redacted]
Emails: [Redacted]
[Redacted]
[Redacted]

2. SUMMARY OF THE FACTS

7.
The Sole Arbitrator provides below a summary of the main relevant facts as established on the basis of the Parties' submissions and evidence produced in these proceedings. Additional facts may be set out, where relevant, in connection with the legal analysis of the Parties' claims.

2.1 History of the Dispute

8.

On 2 April 1994, the [Redacted], Spain, approved a specific amendment to the General Development Plan of the Community of [Redacted] regarding an area known as [Redacted] ("[Redacted]"). [Redacted] is located at [Redacted], in [Redacted], a municipality in the [Redacted]2

9.

The [Redacted] aimed at developing several land plots in [Redacted] covering approximately 100 hectares as residential areas as well as an industrial, retail and tertiary services complex.3

10.

On 21 July 1994, a consortium made up of various public administrations, including the City of [Redacted] and the [Redacted] (the "[Redacted] Consortium"), was constituted. The tasks of the [Redacted] Consortium included the management of all relevant aspects of the development of [Redacted], including awarding contracts to developers, land valuation and expropriation.4

11.
On 21 February 1995, the [Redacted] Consortium approved the bidding terms of a public tender for the development of [Redacted].5
12.
On 4 August 1995, the [Redacted] Consortium awarded the tender to [Redacted] Sociedad Anónima ("[Redacted]").6
13.

On 27 March 1996, the urban planning commission of the [Redacted] published its approval of the plan presented by [Redacted] for the development of [Redacted].7

14.

At the beginning of 1997, the expropriation project necessary to implement the development of [Redacted] (the "Expropriation Project") commenced.8 The Expropriation Project entailed an appraisal in which the [Redacted] Consortium, as expropriation authority, issued a proposed valuation of the plots to be expropriated.9 Pursuant to Spanish law no. 6/1998 of 13 April 1998, the Expropriation Project was made public, giving the owners of the relevant plots the possibility to present their comments.10 If the relevant owners rejected the proposed valuation, the latter was to be set by an expropriation jury, made up of various civil servants (the "Expropriation Jury").11 If no opposition was filed within 20 days of the publication of the appraisal, the latter was deemed to have been accepted and the proposed prices to have become final.12

15.

The [Redacted] Consortium established a common expropriation price of 2,272 pesetas per square metre (equivalent to € 13.65) that had to be paid by [Redacted] to the expropriated owners.13 Approximately 70% of the owners challenged the proposed expropriation price.14

16.

On 28 April 1998, the Expropriation Jury decided that the expropriation price should be 12,210 pesetas per square metre (equivalent to € 73.38).15

17.
[Redacted] and the local authorities challenged before state courts the Expropriation Jury's valuation.
18.

On 5 November 1999, [Redacted] entered into an agreement with [Claimant 3] to which it delegated some development services in connection with urban planning. These services concerned, in particular, the commercial area named ‘[Redacted]' (which was made up of the land to be acquired or expropriated for [Redacted]'s benefit) and included the management of all expropriation proceedings.16

19.

In order to focus on its retail business, [Redacted], which held 100% of [Redacted]'s share capital, engaged in negotiations for the sale to Claimants of its stake in [Redacted].

20.

On 11 July 2001, [Claimant 3] agreed to purchase from [Redacted] 45% of [Redacted]'s shares through a share purchase agreement (which has not given rise to a dispute to be decided in these proceedings).17 [Claimant 3] was controlled by Mr [Claimant 1] and [Claimant 4] and all of Claimants (including [Claimant 3]) agreed to purchase the remaining 55% of the shares in [Redacted]. Accordingly, the following agreements that form the basis for Claimants' claims in these proceedings were entered into between Claimants and [Redacted]:

- Escritura de venta de acciones, dated 16 October 2001, signed by [Redacted] and [Claimant 3], pursuant to which the latter paid € 48,750 for 1,950 shares;

- Escritura de venta de acciones, dated 16 October 2001, signed by [Redacted] and [Claimant 4],18 pursuant to which the latter paid € 200,500 for 8,020 shares;

- Escritura pública de compraventa de acciones, dated 25 October 2001, signed by [Redacted] and [Claimant 1], pursuant to which the latter paid € 199,500 for 7,980 shares; and

- Escritura pública de compraventa de acciones, dated 25 October 2001, signed by [Redacted] and [Claimant 2],19 pursuant to which the latter paid € 101,250 for 4,050 shares.

(the "Agreements" or "SPAs").20

21.

Pursuant to an extraordinary meeting of its shareholders held on 16 October 2001, [Redacted] S.A. changed its corporate name to [Redacted] S.A. ("[Redacted]") and the make-up of its board of directors.21

22.
At the time the Agreements were entered into, [Redacted] was still discussing the prices to be paid to the owners of the expropriated plots. In Clause V of the Agreements, the Parties agreed to a mechanism for the adjustment of the price of the shares (the "Share Price Adjustment"), depending on the final costs incurred for the acquisition of the relevant plots, be it through expropriation or other means (the "Acquisition Cost" for one plot or the "Acquisition Costs" when more than one plot is considered).
23.

By 31 October 2001, [Claimant 3] had invoiced [Redacted] € 3,117,214.59 for its development services22 and the owners of more than 90% of the surface area reached out-of-court settlements with [Redacted], leading to the transfer to [Redacted] of the corresponding plots without further disputes.23 At the same time, [Redacted] had completed the urbanisation of the Expropriation Project, sold 82% of the newly shaped and fitted plots and [Respondent's store] had opened in [Redacted].24

24.

Following the execution of the SPAs, between 2001 and 2003, [Redacted] lost before the Superior Court of Justice of [Redacted] on its appeals against the decisions of the Expropriation Jury and petitioned the Spanish Supreme Court to try to obtain that the expropriation prices for all of the relevant plots be lowered (except for the three smallest ones - plots no. 94, 100 and 101 - for which no appeal was filed).25

25.

On 13 August 2003, Claimants wrote to [Redacted], seeking a provisional liquidation of the Share Price Adjustment.26

26.

On 14 October 2003, [Redacted] rejected Claimants’ request for provisional liquidation, indicating, inter alia, that only final expropriation prices could trigger any payment obligations for [Redacted].27

27.

In February 2004, [Redacted] and Claimants exchanged additional correspondence as to whether a provisional liquidation of the Share Price Adjustment was warranted.28

28.

In various decisions rendered between 2005 and 2007, the Spanish Supreme Court confirmed all of the expropriation prices set by the Expropriation Jury.29

29.

On 10 June 2013, the [Redacted] demanded that [Redacted] pay it € 1,742,935.10 for plot no. 44. While [Redacted] disputed this amount, the [Redacted] collected the full price it demanded by calling the guarantees that had been issued by [Redacted].30

30.

Upon the dissolution and liquidation of [Redacted], Respondent, [Respondent], as its sole shareholder, assumed any rights and obligations held by [Redacted].31

31.

On 3 February 2014, arguing that all Acquisition Costs had been definitely settled, Claimants requested that [Respondent] pay the Share Price Adjustment as follows:

(i) Claimant 1 requested [Respondent] to pay the amount of € 1,166,054.22;

(ii) Claimant 2 requested [Respondent] to pay the amount of € 591,795.43;

(iii) Claimant 3 requested [Respondent] to pay the amount of € 284,938.06; and

(iv) Claimant 4 requested [Respondent] to pay the amount of € 1,198,201.08.32

32.

In March and June 2014, the Parties held meetings to discuss whether the conditions for the Share Price Adjustment to be triggered were met and [Respondent] demanded a series of documents to so assess. This led the Parties to exchanging in writing on the subject on various occasions until February 2017.33

33.

On 30 June 2017, in light of the Parties' persistent disagreement, Claimants formally ended the negotiations with [Respondent] and indicated that they would commence arbitration proceedings against [Respondent].34

2.2 Relevant Provisions of the Agreements

34.
The Parties have relied on various provisions of the Agreements in support of their positions and claims.

2.2.1 Provisions Relied upon by Claimants

35.

Claimants rely on Clause V of the Agreements to demonstrate that (i) the price of the shares in [Redacted] was fixed taking into account the Acquisition Costs that had not yet been determined when the SPAs were entered into35 and (ii) the Share Price Adjustment would come into play if the Acquisition Costs were higher or lower than the amount assessed in the SPAs.36

36.

The first paragraph of Clause V reads as follows:

"QUINTA. -
Declaran expresamente las partes que el precio de la presente transmisión de acciones ha sido fijado teniendo en expresa y esencial consideración los costes de adquisición o justiprecio expropiatorio y cantidades concurrentes, pendientes de pago por la Compañía [Redacted] S. A., (hasta hoy [Redacted], S.A.), de las fincas números. 15, 29, 44, 54, 58, 68, 78, 94, 100, 101, y dos más, del Expediente de Delimitación y Expropiación de la Unidad de Actuación [Redacted] de [Redacted], ([Redacted]), con aproximadamente un total de 90.960,96.- m2 de superficie, costes pendientes que se ha previsto que asciendan a la cifra de 8.133.-Ptas./metro cuadrado de superficie física.

Y para resolver las consecuencias derivadas de la mayor o menor cuantía final de dichos costes totales de adquisición pendientes, el Vendedor y el Comprador convienen : [...]."37

37.

Claimants also rely on sections A and B of Clause V of the SPAs to show that (i) they were entitled to claim from [Respondent] any unforeseen excess of the land cost estimated by the Parties to be of 8,133 pesetas (equivalent to € 48,88) per square metre and that (ii) conversely, [Respondent] could have claimed from Claimants any unforeseen difference below the estimated land cost.38

38.

Sections A and B of Clause V read as follows:

"A. Mayor coste final de adquisición de suelos:

En el supuesto de que finalmente el coste medio pendiente por metro cuadrado de suelo a pagar en su día por la Compañía [Redacted] S.A., (hasta hoy [Redacted], S.A.), supere la cifra prevista de 8.133-Ptas./m2 terreno, minorando por ello el valor líquido actual de la Compañía [Redacted] S. A., (hasta hoy [Redacted], S.A.) y de sus acciones, el precio total de las acciones objeto de la presente transmisión, pactado en la precedente estipulación, se minorará en la cuantía resultante de aplicar el coeficiente de [different for each Claimant] %, al total exceso sobre la indicada cifra de referencia de 8.133- Ptas. por metro cuadrado de terreno, de los costes del suelo pendiente de pago por Compañía [Redacted] S. A., (hasta hoy [Redacted], S.A.), obligándose desde ahora el VENDEDOR ante el COMPRADOR a reintegrar a éste la cantidad resultante de dicha minoración.

Para formar el total de costes pendientes que han de compararse con la citada previsión establecida en 731.970.000.-Ptas. se sumarán tanto los respectivos justiprecios o precios de adquisición de la plena propiedad de todas las fincas reseñadas en el primer párrafo de esta estipulación, como todas cuantas otras cantidades concurrentes no incluidas ya en el justiprecio, esto es, costes e indemnizaciones por suelos y vuelos, Premio de Afección, intereses desde la ocupación de cada finca, gastos procesales de fijación de justiprecios costes de peritos, procuradores, abogados y costas, en la actual instancia del Tribunal Superior de Justicia de [Redacted], que deba gastar Compañía [Redacted] S. A., (hasta hay [Redacted], S.A.), a consecuencia o como presupuesto de la determinación judicial de dicho justiprecio o coste de adquisición de todas las fincas.

B. Menor coste final de adquisición de suelos:

En el supuesto de que finalmente el coste medio hoy pendiente por metro cuadrado de suelo de la [Redacted] a pagar por la Compañía [Redacted], S.A. no supere la cifra prevista antedicha de 8.133-Ptas./m2 suelo, toda vez que ello supondrá un menor pasivo y, por tanto, un mayor valor de dicha Compañía y de las acciones de la misma, el COMPRADOR se obliga a satisfacer al VENDEDOR como mayor precio de la totalidad de las acciones de Compañía [Redacted] S.A., (hasta hoy [Redacted], S.A.), adquiridas, enumeradas en el expositivo I, una suma equivalente a las ([different for each Claimant] %) del ahorro total obtenido respecto de los costes establecidos como referentes, a saber, 8.133.- Ptas/m2 terreno."39

39.

Last, Claimants refer to the possibility under section C of Clause V of the SPAs to proceed with provisional liquidations of the Share Price Adjustment if certain thresholds in terms of expropriated surface area were reached.40

40.

Section C of Clause V reads as follows:

"C.- Disposiciones comunes a los dos pactos precedentes:

C.1. Una vez concluidos todos los procedimientos de valoración de suelos pendientes, se determinará entonces definitivamente el mayor o menor coste de adquisición de suelos.

Sin perjuicio de ello, al alcanzarse los volúmenes de 30.000 m2 y 60.000 m2 evaluados definitivamente, a petición de cualquiera de las partes, que habrá de comunicarse a la otra dentro de los 30 días naturales siguientes a la fecha de notificación de la resolución o acuerdo evaluatorio de terrenos que alcance alguna de dichas cotas, podrán realizarse liquidaciones provisionales, efectuándose por el VENDEDOR o por el COMPRADOR, según procediere, las devoluciones o los pagos que correspondan según el mayor gasto o el ahorro resultante, así como regularizándose según proceda las aportaciones o pagos provisionales precedentemente efectuadas.

C.2. Lo convenido en los Pactos precedentes será exigible cualquiera que fuere el tiempo necesario para concluir definitivamente todos y cada uno de los procedimientos evaluatorios pendientes, estipulándose expresamente, con exclusión de cualquier otro plazo que pudiere pretenderse, que no comenzará a correr plazo prescriptivo alguno hasta que no hayan sido efectiva y definitivamente concluídos todos y cada uno de los procedimientos y operaciones evaluatorias pendientes."41

2.2.2 Provisions Relied Upon by Respondent

41.
Respondent also refers to the above clauses of the SPAs, arguing that the conditions for the Share Price Adjustment to be paid under sections A and C of Clause V of the Agreements were not met.
42.

Moreover, [Respondent] relies on Clause III of the Agreements to show that Claimants cannot claim any monies from Respondent.42

43.

Clause III reads as follows:

"TERCERA.- El Comprador ha participado activamente y principalmente en la Administración de la Compañía desde su creación, teniendo un profundo conocimiento tanto de la Compañía como de su negocio. Por ello, el Vendedor y el Comprador convienen que las garantías establecidas en esta estipulación son las únicas garantías prestadas por el Vendedor con respecto a la compra-venta de las Acciones y que la indemnización prevista es la única acción que compete al Comprador en caso de incumplimiento de tal garantía.

El Vendedor declara y garantiza en favor del Comprador que, en esta fecha:

(a) El Vendedor es el propietario legítimo y de pleno domino de las Acciones.

(b) Las Acciones no están afectas a opción, prenda ni otra forma de garantía, gravamen o restricción y se venden por el Vendedor al Comprador sin ninguna reserva.

(c) Ninguna persona tiene derecho (ya sea ejercitable en la actualidad o en el futuro y sea contingente o no) a exigir la emisión, transmisión o conversión de acciones de la Compañía.

(d) No hay pendientes por parte del Vendedor o en su contra litigios, procedimientos o reclamaciones en relación con las Acciones.

En el supuesto de que el Comprador exija indemnización a tenor de este Contrato, deberá comunicarlo por escrito al Vendedor dentro del mes siguiente a que el incumplimiento en cuestión haya llegado a su conocimiento. La responsabilidad asumida por el Vendedor en la presente Estipulación permanecerá en vigor durante los doce (12) meses siguientes a esta fecha. No podrá entablarse reclamación contra el Vendedor a menos que se haya notificado por escrito dentro del referido período de 12 meses."43

3. SUMMARY OF THE PROCEEDINGS

3.1 Main Procedural Steps

44.
The summary of the procedural history below sets out the main relevant steps of the procedure so far. It does not seek to present in an exhaustive manner each and every procedural activity carried out in these proceedings.
45.
On 19 February 2018, the secretariat (the "Secretariat") of the ICC International Court of Arbitration (the "Court") informed Claimants that, on the same day, it had (i) received a "Request for Arbitration" dated 16 February 2018 (which included exhibits C-1 to C-13) (the "Request"), filed by Claimants against Respondent and (ii) registered the case initiated by the Request under reference 23434/JPA.
46.
In the Request, Claimants requested that a sole arbitrator be appointed by the Court or be nominated jointly by the Parties.
47.
On 21 February 2018, the Secretariat sent Respondent the Request.
48.
On 28 March 2018, the Secretariat informed the Parties that, on 26 March 2018, it had received Respondent's answer dated 23 March 2018 to the Request (which included exhibits R-1 to R-4) (the "Answer").
49.
In the Answer, Respondent argued that a three-member arbitral tribunal should be appointed.
50.
On 3 April 2018, Claimants submitted further arguments in favour of their position that the case should be heard by a sole arbitrator and not by a three-member arbitral tribunal as contended by Respondent.
51.
On 5 April 2018, the Secretariat indicated that the Parties' comments on the constitution of the arbitral tribunal would be transmitted to the Court in due course, also granting Respondent the possibility to file any additional comments on this issue by 11 April 2018.
52.
On 11 April 2018, Respondent submitted further arguments in favour of its position that the case should be heard by a three-member arbitral tribunal due to the characteristics of the case.
53.
On 12 April 2018, the Secretariat took note of Respondent's further comments on the number of arbitrators and stated again that the Parties' comments on the constitution of the arbitral tribunal would be transmitted to the Court in due course.
54.

On 26 April 2018, the Secretariat informed the Parties that, on the same day, the Court:

(i) Decided to submit the arbitration to one arbitrator in accordance with Article 12(2) of the Rules;

(ii) Decided to take the necessary steps for the appointment of the sole arbitrator in accordance with Article 13(3) of the Rules; and

(iii) Fixed the advance on costs at US$ 120,000, subject to later readjustments, in accordance with Article 37(2) of the Rules.

55.

On 11 May 2018, the Secretariat informed the Parties and the Sole Arbitrator that:

(i) On the same day, in accordance with Article 13(3) of the Rules, upon the proposal of the French National Committee of the ICC, the Court had appointed as sole arbitrator Eliseo Castineira whose contact details are as follows:

Eliseo Castineira
CASTINEIRA
20, rue des Pyramides
75001 Paris
France

Telephone: [Redacted]
Email: [Redacted]; and

(ii) In accordance with Article 16 of the Rules, it was transmitting the file of the case to the Sole Arbitrator.

56.
On 14 May 2018, the Sole Arbitrator received the file of the case.
57.
On 15 May 2018, the Sole Arbitrator sent the Parties drafts of the Terms of Reference and of Procedural Order No. 1, incorporating proposed specific procedural rules for the case.
58.
On 4 June 2018, in accordance with Article 24(1) of the Rules, a case management conference was held by telephone (the "CMC") between the Parties' counsel and the Sole Arbitrator to establish:

(i) The applicable procedural measures designed "to ensure effective case management" in accordance with Article 22(2) of the Rules; and

(ii) The procedural timetable required by Article 24(2) of the Rules.

59.
On 5 June 2018, after taking into account of the comments discussed at the CMC, the Sole Arbitrator communicated the specific procedural rules under Procedural Order No 1, to which the procedural timetable was attached. On the same day, the Sole Arbitrator established the Terms of Reference, prepared in accordance with Article 23(1) of the Rules and which had been already executed on behalf of the Parties.
60.
On 15 June 2018, the Secretariat informed the Parties and the Sole Arbitrator that the Terms of Reference and the procedural timetable had been transmitted to the Court at its session of 14 June 2018, in accordance respectively with Article 23(2) and 24(2) of the Rules.
61.

On 23 August 2018, Claimants submitted their Statement of Claim ("SoC" in the footnotes of this Final Award), together with (i) factual exhibits C-1 to C-65 - including two witness statements by [Person 6], [Claimant 4]'s [Redacted] (C-32), and [Person 7], a partner in the real estate department of Hogan Lovells International, LLP (C-57), as well as an expert report by Forest Partners (C-50) (the "Forest Report") - and (ii) legal exhibits CL-1 to CL-12.

62.
On 3 September 2018, in accordance with the procedural timetable, the Sole Arbitrator communicated the Statement of Claim and its exhibits to Respondent.
63.
On 12 November 2018, Respondent submitted its Statement of Defence ("SoD" in the footnotes of this Final Award), together with three annexes as well as factual exhibits R-1 to R-30 and legal exhibits RL-1 to RL-12. At § 223 of its Statement of Defence, Respondent invited Claimants to remove Mr [Person 7]'s witness statement (C-57) from the record on the grounds that such witness statement had been made in violation of the applicable rules of privilege.
64.
On 19 November 2018, Claimants indicated that "it would be in the interest of the arbitration that both Mr. [Person 6] and Mr. [Person 7], and Forest Partners' expert are called to the hearing pursuant to paragraph 36 of PO 1."
65.
On 21 November 2018, Claimants provided their written arguments in support of the admissibility of Mr [Person 7]’s witness statement (C-57).
66.
On 23 November 2018, the Parties’ counsel and the Sole Arbitrator held a pre-hearing telephone conference at which the schedule and practical details of the hearing were discussed. Respondent’s request for inadmissibility of Mr [Person 7]’s witness statement was also discussed. The Parties agreed that certain paragraphs be removed from Mr [Person 7]’s witness statement and that a new version of corresponding exhibit C-57 be filed by Claimants accordingly. Furthermore, the Sole Arbitrator decided not to call to the hearing Messrs [Person 6] and [Person 7], who had not been called for cross-examination by Respondent. The Sole Arbitrator indicated that he did not believe that questioning them would actually help him with respect to the establishment of the facts of the case in light of the evidence and arguments on record. The Sole Arbitrator further noted that (i) in their oral pleadings, Claimants would be free to refer to the witness statements that they had produced and (ii) in accordance with § 39 of Procedural Order No. 1, the Sole Arbitrator "shall decide what weight shall be given to the witness statement of any witness who has not been called to the hearing." Still on 23 November 2018, the Sole Arbitrator issued Procedural Order No. 2, which incorporated the discussions and decisions made at the pre-hearing telephone conference.
67.
On 25 November 2018, Claimants provided the agreed-upon revised version of Mr [Person 7]’s witness statement (which replaced original exhibit C-57).
68.

On 19 and 20 December 2018, the hearing was held in [Redacted] (Spain) in presence of the Parties’ counsel and representatives. Furthermore, a representative of Claimants’ forensic expert, Forest Partners, was examined at the hearing.

69.

On 20 December 2018, the Sole Arbitrator issued Procedural Order No. 3, including (i) the agreed-upon time limits for the Parties to file their Closing Statements and Statements of Costs and (ii) the possibility for Respondent to comment by 18 January 2019 on Claimants’ calculation of their interest claim as revised at the hearing.44

70.
On 21 December 2018, the Parties filed their Closing Statements.
71.
On 9 January 2019, the Sole Arbitrator received the hearing transcripts.
72.
On 31 January 2019, the Parties filed their Statements of Costs.
73.
On 1 February 2019, the Sole Arbitrator invited Claimants to provide answers to certain queries on their Statements of Costs by 15 February 2019.
74.
On 8 February 2019, Claimants answered the Sole Arbitrator’s queries on their Statements of Costs.
75.

On 18 February 2019, after the expiry of the time limit for the Parties to file any potential comments on the other side's Statement of Costs,45 the Sole Arbitrator issued Procedural Order No. 4 in which he:

(i) Declared the proceedings closed, in accordance with Article 27(a) of the Rules; and

(ii) Informed the Parties and the Secretariat that, in accordance with Article 27(b) of the Rules, he expected to submit the draft of the Final Award to the Court for scrutiny under Article 34 of the Rules by 15 March 2019.

76.
On 15 March 2019, the Sole Arbitrator informed the Parties that, due to unexpected circumstances, he would send the draft of the Final Award to the Court by 22 March 2019.
77.
On 22 March 2019, the Sole Arbitrator sent the draft of this Final Award to the Court.
78.
On 19 April 2019, the Secretariat informed the Parties and the Sole Arbitrator that, on 18 April 2019, the Court had approved the draft Final Award pursuant to Article 34 of the Rules.

3.2 Time Limit to Render the Final Award

79.
In accordance with Article 31(1) of the Rules, the time limit of six months within which the Sole Arbitrator must render the Final Award started running on the date of signature of the Terms of Reference, i.e., 5 June 2018. Therefore, the original time limit for rendering the Final Award was 5 December 2018.
80.
On 22 November 2018, the Court extended the time limit for rendering the Final Award until 28 February 2019, in accordance with Article 31(2) of the Rules.
81.
On 27 February 2019, the Secretariat informed the Sole Arbitrator and the Parties that the Court had extended the time limit for rendering the Final Award until 29 March 2019, in accordance with Article 31(2) of the Rules.
82.
On 29 March 2019, the Secretariat informed the Sole Arbitrator and the Parties that the Court on 21 March 2019 had extended the time limit for rendering the Final Award until 30 April 2019, in accordance with Article 31(2) of the Rules.

4. APPLICABLE RULES ANS LAWS

4.1 Arbitration Agreement

83.

Clause 9 of each of the Agreements on which Claimants have based their claims provides:

"Todo conflicto, discrepancia o reclamación que traiga causa de este documento o de su incumplimiento, resolución o invalidez se resolverá mediante arbitraje con arreglo al Reglamento de Conciliación y Arbitraje de la Cámara de Comercio Internacional vigente en la fecha de sumisión a arbitraje. El procedimiento arbitral se celebrará en París y el idioma en que se desarrollará será el inglés.

El contenido del presente documento estará regulado y se interpretará en todos sus aspectos con arreglo a la legislación holandesa, sin atender a sus disposiciones de derecho internacional privado."

(English translation: "Any conflict, discrepancy or claim arising out of this document or out of its breach, termination or lack of validity shall be resolved by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce in force on the date of submission to arbitration. The arbitral proceedings shall take place in Paris and shall be held in English.

The contents of this document shall be regulated and interpreted in all respects in accordance with Dutch law, excluding its provisions on private international law."46).

4.2 Place of the Arbitration

84.
Pursuant to Clause 9 of each of the Agreements, the place of the arbitration is Paris (France).

4.3 Procedural Rules

85.
Specific procedural rules for these proceedings were agreed upon at the CMC and incorporated in Procedural Order No. 1.

4.4 Language of the Arbitration

86.

Section 7.4 of the Terms of Reference provides as follows:

"40. Pursuant to 9 of each of the Agreements, the language of the arbitration is English.

41. If factual exhibits or legal authorities are submitted in a language other than English, the relevant passages on which the Party (or Parties) submitting the documents relies (or rely) should be translated into English. Each translation shall be deemed to be correct unless a Party disputes its correctness. If a translation is disputed by one Party, the Parties shall seek to reach agreement on the accuracy of the translation. If the translation remains disputed despite the Parties' efforts to reach agreement, the Sole Arbitrator may require that the translation be made by a sworn translator or by a translator appointed by the Sole Arbitrator himself.

42. As an exception to the above rules, all documents, including factual exhibits and legal authorities, originally drafted in Spanish need not be translated.

43. The costs of any translation shall be advanced by the Party or Parties producing it until the Sole Arbitrator decides on the costs."

87.

Furthermore, at the pre-hearing telephone conference, as noted in section 3.1 of Procedural Order No. 2, it was agreed as follows:

"23. By derogation to the arbitration agreement on the basis of which Claimants have commenced these proceedings, the Parties have specifically agreed that:

(i) All of the hearing may be held in Spanish; and

(ii) In his award(s) the Sole Arbitrator may quote directly from the Spanish transcription of the hearing without having to translate the relevant quotes into English."

4.5 Applicable Substantive Law

88.
Pursuant to Clause 9 of each of the Agreements, the applicable substantive law is the law of the Netherlands excluding its provisions on private international law.

5. THE PARTIES’ PRAYERS FOR RELIEF

89.
Subject to minor drafting points, the Parties' prayers for relief have remained identical throughout the proceedings.

5.1 Claimants’ Prayers for Relief

90.

Claimants' final prayers for relief are as follows:

"The Claimants reiterates its request for relief, and in particular, seeks and Award which:

(a) Declares that the Respondent is obligated to pay the Claimants the adjusted price as per clause V of the SPAs;

(b) Orders the Respondents to pay:

(i) Mr [Claimant 1] the amount of 1,166,054.22 €;

(ii) Mr [Claimant 2] the amount of 591,794 €;

(iii) [Claimant 3] the amount of 284,938.06 €; and

(iv) [Claimant 4] the amount of 1,198,201.08 €.

(c) Orders the Respondent to pay the Claimants the corresponding interests which currently amount to 1,361,549€, of which 119,706€ correspond to [Claimant 3], 503,379€ correspond to [Claimant 4], 489,874€ correspond to Mr. [Claimant 1] and 248,620€ correspond to Mr.[Claimant 2]; and

(d) Orders the Respondent to pay the Claimants all costs and expenses incurred arising out of and/or in connection with these proceedings."47

5.2 Respondent’s Prayers for Relief

91.

Respondent's final prayers for relief are as follows:

"[Respondent] requests the Sole Arbitrator to, contrary to Claimant's position, render an award that, according to the aforementioned statements, rejects all the claims asserted against [Respondent] by Claimants in the present arbitration and orders Claimants to pay the total costs and expenses derived from the arbitration proceeding."48

6. ISSUES TO BE DETERMINED

92.

In light of the Parties' respective prayers for relief and arguments in this case, the Sole Arbitrator must determine the following issues:

(i) Whether Claimants have met the conditions under Clause V of the SPAs so as to be entitled to an adjustment of the price of the shares of [Redacted] (section 7);

(ii) If so, what is the amount payable to Claimants and, in particular, is such amount limited to the purchase price of the shares (section 8);

(iii) Whether Claimants are entitled to interest on their claims (section 9); and

(iv) The allocation of the costs of the arbitration (section 10).

7. ARE CLAIMANTS ENTITLED TO AN ADJUSTED PRICE UNDER CLAUSE V OF THE AGREEMENTS?

7.1 The Parties’ Positions

7.1.1 Claimants’ Position

93.

In essence, Claimants make the following submissions.49

94.

Claimants argue that all of the conditions for the Share Price Adjustment to be triggered pursuant to Clause V of the SPAs have been met.50

95.

In particular, according to Claimants, the triggering event for the Share Price Adjustment was that the Acquisition Costs exceed the estimated cost of acquiring the relevant plots, which was the case.51

96.

Claimants also reject [Respondent]'s contention that the expropriation prices were not definitely set regarding two plots, arguing that Clause V of the SPAs only referred to ten specifically identified plots and that its reference to two other unidentified plots "was to allow for the possibility to include in the Share Price Adjustment mechanism any other liability related to small sections of land that did not seem to belong to any of the identified plots and that could potentially give rise to new disputes."52 However, Claimants submit that no other claims from unidentified owners arose so that all that was required under Clause V was that the Acquisition Costs be set for the ten specifically identified plots.53

97.

At the hearing, Claimants argued that they had identified plot no. 58 and established its Acquisition Cost, notwithstanding Respondent's allegations to the contrary in its Statement of Defence.54

7.1.2 Respondent’s Position

98.
In essence, Respondent makes the following submissions.
99.

[Respondent] submits that the conditions that would have allowed Claimants to collect any amount corresponding to the Share Price Adjustment under Clause V of the SPAs have not been met.

100.

According to Respondent, Claimants have not provided any information regarding two of the twelve plots referred to in Clause V so that 6,881.32 square meters remain unaccounted for and the valuation of the Acquisition Costs is not yet final.55

101.

Moreover, Respondent contends that Claimants have not even shown that the procedure for the valuation of the ten identified plots has come to an end. In particular, Respondent argues that Claimants have not identified plot no. 58 so that an additional surface area of approximately 20,000 square metres remains unaccounted for.56

7.2 The Sole Arbitrator’s Analysis and Decision

102.
Pursuant to Clause V.A of the SPAs, Claimants are entitled to a downward Share Price Adjustment if the Acquisition Costs for plots no. "15, 29, 44, 54, 58, 68, 78, 94, 100, 101, y dos más" ultimately exceed the sum of 8,133 pesetas per square metre. Conversely, pursuant to Clause V.B, if the Acquisition Costs for these plots are ultimately below 8,133 pesetas per square metre, then Claimants must pay Respondent an upward Share Price Adjustment.
103.
In this case, given Claimants’ position that they are entitled to a share purchase price reduction under Clause V.A and Respondent’s objections, the Sole Arbitrator must determine whether Claimants have met the conditions that trigger the right to a share purchase price reduction, namely whether Claimants have (i) provided the requisite information on all relevant plots and the required surface area (section 7.2.1) and (ii) identified plot no. 58 and established its final valuation (section 7.2.2).

7.2.1 Was it Sufficient for Claimants to Prove the Acquisition Costs for Ten Plots and for Less Than 90,960.96 Square Metres?

104.

The Sole Arbitrator must determine (subject indeed to the Sole Arbitrator’s decision in section 7.2.2 below as to whether Claimants actually identified plot no. 58) whether the Share Price Adjustment in Clause V.A of the Agreements may be triggered although Claimants have provided information only on the Acquisition Costs of:

(i) The ten specifically identified plots in Clause V of the Agreements, which refers not only to these ten specifically identified plots, but also to two unidentified plots (plots no. "15, 29, 44, 54, 58, 68, 78, 94, 100, 101, y dos más"); and

(ii) 84,079.64 square metres out of 90,960.96 square metres referred to in Clause V, meaning that 6,881.32 square metres are unaccounted for.

105.

At the hearing, Respondent clarified that the surface area of 6,881.32 square metres missing from the 90,960.96 square metres in Clause V of the Agreements corresponds to the two above-mentioned allegedly missing, unidentified plots.57

106.

Respondent contends that it was impossible, as a matter of Spanish administrative law, that:

(i) Two additional plots not specified in the list of expropriated plots established by the relevant expropriation authority appear subsequently; and

(ii) Indemnification claims of unidentified plot owners arose after the applicable time limit of two months from the notification of the decision of the Expropriation Jury in 1999 (about two years before the Agreements were entered into).58

107.
The Sole Arbitrator does not consider Respondent’s above arguments, even if they were proven to be true, to be dispositive of his decision as to whether Claimants met the requirements of Clause V of the Agreements. Indeed, the issue to be decided is not directly what was possible or not under Spanish administrative law, but rather what the Parties have actually agreed.
108.
Respondent’s argument that Claimants failed to determine the Acquisition Costs for a surface area of 90,960.96 square metres does not square with the qualification of the adverb "approximately" that precedes this very specific surface area ("con aproximadamente un total de 90.960,96.- m2 de superficie") in Clause V. Moreover, the SPAs themselves show that the surface area of 90,960.96 square metres is approximative even if it includes two decimals. Based on the Acquisition Cost of 8,133 pesetas per square metre foreseen in Clause V, the total remaining Acquisition Costs should have amounted to 739,785,488 pesetas (90,960.96 x 8,133) rather than 731,970,000 pesetas as stated in Clause V.A. Likewise, the remaining Acquisition Costs of 731,970,000 pesetas in Clause V.A actually correspond to a surface area of 90,000 square metres (731,970,000 / 8,133) rather than 90.960,96 square metres.
109.

Furthermore, [Person 6], [Claimant 4]’s [Redacted], indicated in his witness statement that part of the expropriated land included farmland in which adjoining plots were not formally separated with a physically visible separation.59 Mr [Person 6] indicated that for such farmland the division appeared from the direction of plowing concerning the different crops.60 In addition, according to Mr [Person 6]’s witness statement, the legal land description in the 1990s was less sophisticated and precise than nowadays.61 Moreover, Mr [Person 6]’s witness statement also indicates that, even before the execution of the SPAs, [Redacted] had to deal with various cases in which several individuals had claimed for the same plots and argued on the actual borders between owners. Thus, for Mr [Person 6], it was possible that small swaths of land that did not belong to any of the identified plots appear subsequently and be subject to claims by former owners.62

110.
The Sole Arbitrator finds the allegations in Mr [Person 6]’s witness statement to be convincing for the following reasons.
111.

First, Respondent itself acknowledged that, since 1996, when the publication in the [Redacted]’s Official Gazette of the public consultation of the Expropriation Project was made,63 the land registry system has somewhat evolved, even if such evolution was quite limited it in its opinion.64

112.

Secondly, there exits three types of references to land plots, including two different official land registry references, namely fincas catastrales and fincas registrales, and a third series of references in the list of plots affected by the Expropriation Project (numbered from no. 1 to no. 115),65 prepared by [Redacted] and approved by resolution of the General Technical Secretariat of the City of [Redacted], published on 6 March 1997 (the "Expropriation List").66 In some instances, a particular reference in one system may correspond to more than one reference in another system. In this respect, the plot references in the Expropriation List were used by the authorities in charge of the Expropriation Project, the Expropriation Jury, and in the decisions of the [Redacted] Superior Court of Justice and the Spanish Supreme Court on the expropriation costs disputed by the former owners.67 For each plot number, the Expropriation List mentions the corresponding reference in the registry of the fincas catastrales (numbered from no. [Redacted] to no. [Redacted]).68 The other official property references, those to fincas registrales, partly overlap with the fincas catastrales. This is the case for property no. [Redacted] (finca registral). This parcel is mentioned in an "agreement of expropriation, settlement and materialisation of compulsory assignment" ("convenio expropiatorio y transaccional y de materialización de cesión obligatoria de aprovechamiento") entered into by [Redacted], the City of [Redacted] and the [Redacted] Consortium on 24 June 2002 (the "24 June 2002 Agreement").69 Finca registral no. [Redacted] covers all offinca catastral reference no. [Redacted] and part offinca catastral reference no. [Redacted].70

113.
In the Sole Arbitrator's view, the complexity of the land registration system explains that the Parties wished to cover the risk of higher Acquisition Costs that could result from the revelation of previously unidentified plots or owners. Hence, as pointed out by Mr [Person 6] in his witness statement, the reference in Clause V to two additional unidentified plots ("la mención a "y otras dos" en los acuerdos de compraventa de acciones buscaba cubrir la eventualidad de que pudieran identificarse nuevas fincas o nuevos propietarios que formulasen reclamaciones frente a [Redacted]. Este riesgo no se materializó"71). Hence also the reference to a precise, yet at the same time approximate, surface area in Clause V ("con aproximadamente un total de 90.960,96.- m2 de superficie").
114.

In light of the above, the Sole Arbitrator considers that Claimants and Respondent's predecessor, [Redacted], did not intend to make the Share Price Adjustment of Clause V depend on the subsequent identification of two additional plots or on the determination of Acquisition Costs for exactly 90,960.96 square metres. Rather, the Parties intended to cover the risk that:

(i) The ten identified plots in Clause V for which the Acquisition Costs were not yet determined did not cover all of the expropriated surface area still under discussion; or

(ii) The surface area may vary slightly, regardless of whether such variation would result from an error in the land registries or in the decisions of the Expropriation Jury or of the state courts ultimately deciding on the expropriation prices.

115.
The envisaged risk did not materialise. Claimants may thus rely on Clause V, even though (i) they did not identify two additional plots and (ii) the remaining Acquisition Costs (subject to the Sole Arbitrator's decision as to whether Claimants actually identified plot no. 58) were determined for 84,079.64 square metres instead of 90,960.96 square metres.

7.2.2 Did Claimants Identify Plot No. 58?

116.
In light of the findings in section 7.2.1 above, in order to rely on the downward Share Price Adjustment of Clause V.A, Claimants only need to establish that the Acquisition Costs of the ten plots identified in Clause V, i.e., plots no. 15, 29, 44, 54, 58, 68, 78, 94, 100 and 101, exceed the amount of 8,133 pesetas per square metre.
117.
While the Parties agree that the Acquisition Costs exceed 8,133 pesetas per square metre for plots no. 15, 29, 44, 54, 68, 78, 94, 100 and 101, Respondent contends that Claimants have not identified plot no. 58 so that no determination of the Acquisition Cost of plot no. 58 was provided. If Respondent is correct, then Claimants cannot invoke any Share Price Adjustment given that Clause V requires that the Acquisition Costs of all ten identified plots be established for any adjustment to be triggered. Conversely, if Claimants identified plot no. 58, then the information on the Acquisition Costs must be examined in order to determine whether Claimants are entitled to monies under the Share Price Adjustment. The Sole Arbitrator must thus decide whether Claimants have identified plot no. 58.
118.

In essence, Respondent submits that plot no. 58 corresponds to finca catastral no. [Redacted] and not, as argued by Claimants, to a part offinca registral no. [Redacted], for various reasons, namely (i) the different ownership offinca catastral no. [Redacted] and offinca registral no. [Redacted], (ii) the different surface areas of these two land references and (iii) the fact that finca catastral no. [Redacted] includes a restaurant, the [Redacted], owned by [Person 10] and [Person 8] (the "[Person 10 and Person 8] Siblings") and equipped with a patio and gardens, while finca registral no. [Redacted] does not include any restaurant.72 This, according to Respondent, entails that the surface area of 19,785 square metres for which Claimants are claiming a downward Share Price Adjustment in relation to plot no. 58 was removed from the Expropriation Project ("lo que se está ocultando en esta sede, que se sacaron 19 000 metros cuadrados del proceso de expropiación"73). At the hearing, the Parties have dealt with these issues that are relevant to determine whether Claimants have actually identified plot no. 58.

119.

In order to determine whether plot no. 58 corresponds to a part offinca registral no. [Redacted], the Sole Arbitrator will first establish a chronology of the events relating to plot no. 58, finca catastral no. [Redacted] and finca registral no. [Redacted] (section 7.2.2.1). Then, the Sole Arbitrator will examine whether plot no. 58 was expropriated (section 7.2.2.2), before determining whether plot no. 58 corresponds to the land registry references on which Claimants rely or those invoked by Respondent (section 7.2.2.3).

7.2.2.1 Chronology of Events Relating to Plot No. 58, Finca Catastral No. [Redacted] and Finca Registral No. [Redacted]

120.
Clause V of the SPAs refers to plot no. 58 as one of the plots for which the determination of the Acquisition Costs was still pending when they were entered into in October 2001.
121.

The announcement of expropriation published in the [Redacted]'s Official Gazette on 4 November 1996 indicates that plot no. 58 belonged to the [Person 10 and Person 8] Siblings.74

122.

According to the Expropriation List, plot no. 58 corresponds to finca catastral no. [Redacted].75

123.

The decision of the Expropriation Jury of 15 July 1998 indicates that the surface area of plot no. 58 is 22,381.63 square metres.76 This decision mentions that the area expropriated for the benefit of [Redacted] still belonged to the [Person 10 and Person 8] Siblings in 1998.

124.
The record does not contain any document which mentions the phrase ‘plot no. 58' after the decision of the Expropriation Jury of 15 July 1998.
125.

According to Claimants, about 11 months before the SPAs were executed, on 28 November 2000, "the [Redacted] Consortium and [Redacted] reached an agreement by which [Redacted] assumed the obligation to transfer certain plots of the expropriated land, in exchange for Plot no. 58 with a surface of 19,785 sq.m., and owned by the City of [Redacted]. The transfer would take place once the urbanization program was completed, as payment for the expropriation of this surface"77 (the "28 November 2000 Agreement"). The Sole Arbitrator notes that the 28 November 2000 Agreement provides for the transfer of certain land parcels from [Redacted] to the [Redacted] Consortium. As already noted, the 28 November 2000 Agreement does not expressly refer to plot no. 58. Neither does it mention finca catastral no. [Redacted] or finca registral no. [Redacted],78 a part of which corresponds to plot no. 58 according to Claimants. The only land references in the 28 November 2000 Agreement are to fincas registrales [Redacted], [Redacted], [Redacted], [Redacted] and [Redacted].79

126.

Claimants indicated that "[i]n June 2002, the [Redacted] Consortium and [Redacted] designed a specific transfer regime for plot 58. The plot was then valuated in 245,000,000Ptas (1,472,479.66€). As it had been agreed, instead of a monetary payment, [Redacted] would hand over two plots with a total value of 1,472,479.66€. These plots were identified as IE1a and IE-2:the [Redacted] Consortium and [Redacted] reached an agreement by which [Redacted] assumed the obligation to transfer certain plots of the expropriated land, in exchange for Plot no. 58 with a surface of 19,785 sq.m., and owned by the City of [Redacted]. The transfer would take place once the urbanization program was completed, as payment for the expropriation of this surface."80 The Sole Arbitrator notes that the 24 June 2002 Agreement does not mention the 28 November 2000 Agreement or plot no. 58, but does refer to the segregated part offinca registral no. [Redacted] ("parcela segregada de la finca registral [Redacted]") for an approximate surface area of 19,785 square metres ("cuya extension aproximada es de 19.785 m2"). The 24 June 2002 Agreement also provides that [Redacted] acquired the segregated part offinca registral no. [Redacted] from the City of [Redacted] (which itself acquired all of the relevant plots in finca registral no. [Redacted] on 19 July 200181) for a price of € 1,472,479.66 by way of transferring its ownership in two other plots of land identified as IE1a and IE-2 to the City of [Redacted].82

127.

On 30 December 2003, the property of plots IE1a and IE-2 was transferred by [Redacted] to the City of [Redacted] pursuant to an escritura de transmisión y pago of even date for € 1,472,479.66.83 While this document does not contain any reference to finca catastral no. [Redacted], plot no. 58 or finca registral no. [Redacted], it does refer to the 24 June 2002 Agreement and its performance. The reference to the 24 June 2002 Agreement in the escritura de transmisión y pago of 30 December 2003 confirms that [Redacted] (i) purchased the segregated part offinca registral no. [Redacted] from the City of [Redacted] for a price of € 1,472,479.66 and (ii) settled the whole purchase price by transferring to the City of [Redacted] two other plots identified as plots IE1a and IE-2.

128.

The fact that Claimants acquired the segregated part offinca registral no. [Redacted] from the City of [Redacted] indeed does not entail per se that such segregated part offinca registral no. [Redacted] corresponds to plot no. 58 as referred to in Clause V of the SPAs. In order to determine whether this is the case, the Sole Arbitrator must examine in detail the Parties’ evidence and arguments.

7.2.2.2 Plot no. 58 Was Expropriated

129.

One of Respondent’s main arguments in support of its position that Claimants have not identified plot no. 58 is that finca catastral no. [Redacted], which, according to the Expropriation List,84 corresponds to plot no. 58, was ultimately not expropriated.

130.

Respondent argues that finca catastral no. [Redacted] was subject to the regime of land compensation (meaning that private owners had to obey the new planning rules under the control of the local planning authorities), but was not expropriated. Respondent adds that, given that finca catastral no. [Redacted] or plot no. 58 was not expropriated, this explains that the [Redacted] restaurant still exists and is still owned by the [Person 10 and Person 8] Siblings in that particular parcel.85 Respondent concludes that Claimants have erred in arguing that plot no. 58 and finca registral no. [Redacted] are one and the same and that, therefore, Claimants have not identified plot no. 58.86

131.

It is accurate that the official maps of industrial park no. 10 show that finca catastral no. [Redacted] was subject to the regime of land compensation87 and thus was not expropriated. This explains that the [Redacted] restaurant owned by the [Person 10 and Person 8] Siblings is still open in finca catastral no. [Redacted].

132.

However, plot no. 58 cannot correspond to finca catastral no. [Redacted] because plot no. 58 was expropriated from the [Person 10 and Person 8] Siblings, as indicated by the Expropriation Jury in its decision of 15 July 1998.88

133.

Furthermore, as argued by Claimants,89 the Expropriation List is not fully accurate or complete. For instance, the segregated part offinca registral no. [Redacted] ("parcela segregada de la finca registral [Redacted]"), which is adjacent to finca catastral no. [Redacted] is included with the latter in [Redacted], as indicated in the 24 June 2002 Agreement.90 However, the Expropriation List refers to fincas catastrales, but not to fincas registrales. Thus, no part of finca registral no. [Redacted] is mentioned on the Expropriation List, although it was expropriated. Furthermore, finca registral no. [Redacted] as described in the 24 June 2002 Agreement covers all offinca catastral no. [Redacted] and part offinca catastral no. [Redacted].91 However, these two catastral references are not mentioned in the Expropriation List, which uses catastral references to identify the plots within the expropriation zone of [Redacted].

134.

Respondent’s argument that Claimants have not identified plot no. 58 because finca catastral no. [Redacted] was ultimately not expropriated rests upon the equivalence in the Expropriation List of plot no. 58 and finca catastral no. [Redacted]. For the reasons mentioned above, these two references are not equivalent. Thus, Respondent’s argument that plot no. 58 was not expropriated must fail.

7.2.2.3 Plot No. 58 Corresponds to the Segregated Part of Finca registral No. [Redacted], Which Was Expropriated

(a) The Segregated Part of Finca registral No. [Redacted] Was Expropriated

135.

As already noted, Claimants’ position is that plot no. 58 is a segregated part of Finca registral no. [Redacted], which corresponds to a surface area of 19,785 square metres.92

136.

At the hearing, Respondent argued that the surface area of 19,785 square metres for which Claimants are claiming a downward Share Price Adjustment in relation to plot no. 58 was removed from the Expropriation Project.93

137.
Respondent referred to the 24 June 2002 Agreement to prove its assertion.
138.

As pointed out by Respondent,94 the 24 June 2002 Agreement specifies in the second paragraph of section II of its preamble that [Redacted] had requested that the segregated part of Finca registral no. [Redacted] be removed from the Expropriation Project. However, the 24 June 2002 Agreement (which in its title includes a reference to both expropriation and settlement95) adds in section IV of its preamble that the dispute between [Redacted] and the [Redacted] Consortium is settled by this very agreement pursuant to which [Redacted] (which by then had changed its corporate name to [Redacted]) agreed to transfer to the City of [Redacted] two plots (identified as IE1a and IE-2) valued at € 1,472,479.66 in return for the segregated part offinca registral no. [Redacted ("parcela segregada de la finca registral [Redacted]"). As already noted, the 24 June 2002 Agreement was fully performed on 30 December 2003.96

139.

The official maps of industrial park no. 10 also confirm that the surface area of the segregated part offinca registral no. [Redacted] was expropriated.97

140.

The Sole Arbitrator thus concludes that Claimants paid for the segregated and expropriated part offinca registral no. [Redacted] for which they claim a downward Share Price Adjustment in relation to plot no. 58.

141.

In light of the above, the Sole Arbitrator can now turn to the issue of whether the segregated part of Finca registral no. [Redacted] on the basis of which Claimants demand a downward Share Price Adjustment actually corresponds to plot no. 58.

(b) The Segregated Part of Finca registral No. [Redacted] Corresponds to Plot No. 58

142.

As shown by the comparison of the maps on record, finca registral no. [Redacted] covers all offinca catastral no. [Redacted] and part offinca catastral no. [Redacted].98 In particular, the part of finca registral no. [Redacted] that corresponds to finca catastral no. [Redacted] is adjacent to finca catastral no. [Redacted]. As already determined,99 plot no. 58 and finca catastral no. [Redacted] are not one and the same. This, however, does not necessarily imply that plot no. 58 corresponds to finca registral no. [Redacted], as alleged by Claimants and as disputed by Respondent. In order to determine whether this is the case, one must examine the decision of the Expropriation Jury of 15 July 1998, which provides a description of plot no. 58, although it does not refer to land registry references (be they registrales or catastrales).

143.

The decision of the Expropriation Jury of 15 July 1998 indicates that the visual inspection of plot no. 58 expropriated from the [Person 10 and Person 8] Siblings showed that "in the plot affected by the expropriation there exists a restaurant with a patio and garden. The line delineating the expropriation partially crosses the garden and recreation area of the restaurant" ("en el terreno afectado por la expropiación existe un restaurante dotado de terraza y jardines. La línea limite de la expropiación atraviesa parcialmente la zona ajardinada y de esparcimiento del restaurante").100 Then, follows a description of the various enclosures and types of trees "[i]n the plot affected by the expropriation", including dry land for a surface area of 20,981.63 square metres and the garden area for a surface area of 1,400 square metres, "directly linked to the restaurant" ("vinculada directamente al restaurante")101

144.

Respondent contends that, pursuant to the decision of the Expropriation Jury, plot no. 58 includes the [Redacted] restaurant owned by the [Person 10 and Person 8] Siblings and that, accordingly, plot no. 58 cannot correspond to any part offinca registral no. [Redacted], as the latter does not include any restaurant and is also smaller than plot no. 58.102

145.
On the one hand, in the decision of the Expropriation Jury of 15 July 1998, the phrase "in the plot affected by the expropriation there exists a restaurant with a patio and garden" seems to mean that the [Redacted] restaurant is part of plot no. 58. Furthermore, the parcel description also refers to the valuation of commercial buildings ("Valor de construcción en edificaciones comerciales exclusivas a 91.260 pts/m2"103), which could include a restaurant, even if no restaurant is expressly identified in the decision.
146.
On the other hand, the phrase "[t]he line delineating the expropriation partially crosses the garden and recreation area of the restaurant" seems to indicate that the restaurant itself is not part of plot no. 58. Moreover, as already noted, no specific reference is made to a restaurant in the description of the commercial buildings on the expropriated land.
147.

Like Claimants, the Sole Arbitrator considers that the [Redacted] restaurant is not part of plot no. 58 because this plot was expropriated from the [Person 10 and Person 8] Siblings, as indicated in decision of the Expropriation Jury, whereas the restaurant remains to date the property of the [Person 10 and Person 8] Siblings, as is common course between the Parties.104 This necessarily means that the expropriation line runs through what was formerly a larger garden and recreation area of the [Redacted] restaurant and that (i) on the left-hand side of that line, finca catastral no. [Redacted], which was not expropriated (as it was only subject to the regime of land compensation, as appears from the maps on record105),106 includes the [Redacted] restaurant, which is still open, whereas (ii) on the right-hand side of that line, part of the formerly larger garden and recreation area of the restaurant in finca registral no. [Redacted] was expropriated along with a land area that includes various types of trees and buildings described in the decision of the Expropriation Jury of 15 July 1998. This is consistent with the maps on record, in particular, the Google aerial views,107 for which Respondent provided coordinates in its Statement of Defence.108 Accordingly, the description of plot no. 58 in the decision of the Expropriation Jury of 15 July 1998 does not correspond to finca catastral no. [Redacted], but to a part of finca registral no. [Redacted].

148.

Respondent's last objection regarding the identity of plot no. 58 and of the segregated part of finca registral no. [Redacted] is that, pursuant to the decision of the Expropriation Jury of 15 July 1998, plot no. 58 has a surface area of 22,381.63 square metres109 whereas the segregated part of finca registral no. [Redacted] only has a surface area of 19,785 square metres.110

149.
This argument must fail for the following reasons.
150.

First, the Expropriation List does not identify the surface areas of the relevant expropriated plots and the difference of 2,596.63 square metres (22,381.63 - 19,785) is fairly small. In that respect, Clause V of the SPAs only requires that the surface area for the total number of plots for which the Acquisition Costs were pending when the SPAs were entered into be "approximately" of 90.960,96 square metres ("con aproximadamente un total de 90.960,96.-m2 de superficie"). Therefore, as already mentioned,111 at the time the SPAs were entered into, the Parties did not exclude that the surface area of one or various plots subject to expropriation may have been slightly different from what they expected.

151.

Secondly, and more to the point, Claimants are not basing their Share Price Adjustment claim on the entire surface area offinca registral no. [Redacted], but only on a division of that parcel, namely the segregated part ("parte segregada"112) offinca registral no. [Redacted]. The original finca registral no. [Redacted] or "finca matriz" (literally, "the motherland") included the Northwestern part offinca catastral no. [Redacted], as appears from the maps provided by Respondent.113 The segregated part offinca registral no. [Redacted] in relation to which Claimants are claiming no longer includes the Northwestern part offinca catastral no. [Redacted].114 The surface area of the expropriated segregated part of finca registral no. [Redacted] being of 19,785 square metres, as indicated in the 24 June 2002 Agreement ("cuya extension aproximada es de 19.785 m2"),115 after finca registral no. [Redacted] was divided, there is no reason, or even possibility for Claimants to claim more.

7.2.2.4 The Sole Arbitrator's Conclusion on Plot No. 58

152.

In light of the above, Claimants have established (i) the Acquisition Cost (in the amount of € 1,472,479.66) for the segregated part of finca registral no. [Redacted] and (ii) that this parcel corresponds to plot no. 58.

7.2.3 The Sole Arbitrator’s Decision

153.
Claimants have proven the Acquisition Costs for the requisite surface area and all relevant plots under Clause V of the SPAs.
154.
Accordingly, Claimants' prayer for relief at § 167(a) of their Statement of Claim (request that the Sole Arbitrator "[d]eclares that the Respondent is obligated to pay the Claimants the adjusted price as per clause V of the SPAs") is granted.
155.
Given that all the conditions for the Share Price Adjustment under Clause V of the SPAs to be triggered have been met, the Sole Arbitrator must now turn to the determination of the amounts owed by Respondent to Claimants pursuant to Clause V.

8. AMOUNTS OWED BY RESPONDENT TO CLAIMANTS UNDER THE SHARE PRICE ADJUSTMENT

8.1 The Parties’ Positions

8.1.1 Claimants’ Positions

156.

Claimants first contend that the Share Price Adjustment complies with Dutch law.116 Claimants also allege that [Respondent] cannot refuse to perform its obligations until the final expropriation prices are paid to all of the expropriated owners, as this is not required by Dutch law or the SPAs.117 In any event, Claimants indicate that [Redacted] has already paid almost all of the Acquisition Costs.118

157.

Claimants reject Respondent’s argument that any liability of [Respondent] should be limited to the price of € 550,000 that Claimants paid for the shares in [Redacted].119 In particular, according to Claimants, such a limitation cannot be found as a result of the use of the word "reintegrar" in Clause V of the SPAs.120

158.

Furthermore, for Claimants, the existence of a limitation of liability in this case would contradict the requirements of reasonableness and fairness under Dutch law, in particular, under the Haviltex doctrine.121

159.

Moreover, Claimants submit that (i) the Parties never discussed any liability limitation when they negotiated the terms of the SPAs,122 (ii) such a liability limitation would be in contradiction with the Agreements’ other relevant clauses,123 (iii) finding a liability limitation would actually imply that Claimants would have accepted a significant imbalance in the Parties’ respective obligations,124 and (iv) [Respondent]’s behaviour is contrary to the prohibition of venire contra factum proprium (rechtsverwerking).125

160.

Claimants conclude that [Respondent] under Dutch law must be ordered to pay the Share Price Adjustment for the full amounts that they claim.126

8.1.2 Respondent’s Position

161.

According to [Respondent], a reasonable reading of Clause V of the SPAs can only lead to the conclusion that the limit of the Share Price Adjustment is the price paid for the shares.127

162.

[Respondent] further submits that this interpretation is confirmed by the structure and contents of the SPAs as a whole, as the Parties agreed to adjust the price of the shares (which cannot result in a negative price) and not on any representations and warranties, any damages being expressly excluded from the SPAs.128

163.

Respondent adds that only its interpretation can make sense if one takes into account not only the literal interpretation of the Agreements, but also the context in which they were entered into and, in particular, [Redacted]’s prior sale on 11 July 2001 to [Claimant 3] of 45% of [Redacted]’s share capital.129

164.

Respondent also argues that Claimants’ interpretation of the SPAs is contradicted by the Dutch law concept of a sale and purchase agreement and at complete odds with the economic logic of such a transaction.130

165.

Moreover, Respondent submits that Dutch case law leads to consider that Clause V of the Agreements provides for a limitation of any downward Share Price Adjustment to the purchase price. In that respect, Respondent argues Claimants may not avoid the application of the clear language of Clause V on the basis of the Haviltex doctrine because such a doctrine is not applicable in this case.131 Respondent adds that subsequent Dutch case law confirm [Respondent]’s position.132

166.

What is more, [Respondent] denies Claimants’ allegations that its behaviour was contrary to the prohibition of venire contra factum proprium (rechtsverwerking). Rather, according to Respondent, it has always acted consistently, reserving its legal right to object on several occasions at the Parties’ meetings, including once in writing.133

167.

Last, [Respondent] considers that Claimants’ calculation of their damages is flawed. In particular, Respondent claims that such calculation (i) unduly includes notably an unjustified amount of € 1.1 million,134 (ii) fails to account for an Acquisition Cost of plot no. 94 that was lower than assessed in the Forest Report,135 (iii) misstates the Acquisition Cost of plot no. 44 by unduly including the construction cost of a station for the transfer of urban solid waste,136 (iv) unduly includes plot no. 58, which ultimately was not expropriated according to Respondent,137 (v) unduly includes the prices of plots no. 44, 68 and 94 which have not yet been paid to the owners,138 and (vi) misstates [Claimant 4]'s specific claim, as it is based on a coefficient different from the one provided for in the SPA entered into by [Claimant 4] and [Respondent]'s predecessor, [Redacted].139

8.2 The Sole Arbitrator’s Analysis and Decision

168.

Respondent has pleaded that in the event that the Sole Arbitrator were to determine that (i) Claimants are entitled to a downward Share Price Adjustment pursuant to Clause V of the SPAs and (ii) Respondent's liability is not limited to the total purchase price paid by Claimants for the shares in [Redacted], i.e., € 550,000, Respondent's actual exposure, after its revision of Claimants' damages calculation, is € 1,137,992.01.140

169.

As a preliminary comment it is also worth noting that, prior to this arbitration, in its letter of 6 June 2014 to Claimants, Respondent had indicated that one of its reasons for refusing the Share Price Adjustment was that Claimants had not shown "effective payment" of the Acquisition Costs to some of the expropriated owners.141 In practice, this comment is no longer really relevant because, to date, [Redacted] has paid almost all of the expropriated owners.142 In any event, as pointed out by Claimants at the hearing,143 no provision in the SPAs requires such an effective payment of the Acquisition Costs for the Share Price Adjustment to become payable. Furthermore, unlike what Respondent alleges, there can be no unjust enrichment of Claimants under Article 6:212 of the Dutch Civil Code ("DCC") in the absence of effective payment of the relevant Acquisition Costs to the expropriated owners. Indeed, the Acquisition Costs are payable by [Redacted] while the Share Price Adjustment is owed by, or payable to, Claimants depending on the final determination of the Acquisition Costs.

170.

The Sole Arbitrator has found that the conditions for the operation of the Share Price Adjustment are met (section 7.2.3 above) and Respondent has acknowledged that the Acquisitions Costs for the expropriated land exceeded the purchase price of the shares in [Redacted].144 Accordingly, the Sole Arbitrator must now determine whether the adjustment should be of € 550,000, as argued by Respondent, or more, as contended by Claimants. In order to do so, the Sole Arbitrator will first examine Claimants' argument that Respondent is precluded from arguing that its exposure is limited to the purchase price of the shares (section 8.2.1) before turning to the interpretation of the Parties' agreement as embodied in the SPAs with respect to the Share Price Adjustment (section 8.2.2).

8.2.1 Respondent Is Not Precluded From Relying on Its Argument of Liability Limitation

171.

Claimants contend that (i) it is only in these arbitration proceedings that Respondent alleged for the first time that its liability would be subject to a cap and (ii) the principle of venire contra factum proprium (rechtsverwerking) should prevent Respondent from relying on this argument 17 years after the SPAs were entered into.145

172.

In its letters of 14 October 2003 in which it opposed Claimants' initial requests for a Share Price Adjustment, Respondent merely argued that the Acquisition Costs were not final and requested further information on the Acquisition Costs.146 In its letters of 6 June 2014, Respondent further disputed the merits of the amounts demanded by Claimants, alleging, inter alia, that some of the costs claimed corresponded to items settled prior to the SPAs and that some of the Acquisition Costs were not final or had not yet been paid.147

173.
It is correct that until this arbitration Respondent had not specifically argued that under Clause V of the Agreements its monetary exposure could be limited to the purchase price of the shares.
174.

Claimants refer to a decision of the Dutch Supreme Court of 11 November 2016 in support of their position that allowing Respondent to invoke now a liability limitation under the SPAs would contravene the principle of venire contra factum proprium (rechtsverwerking).148 Claimants' reliance on this decision is misguided. This decision requires for an estoppel or a forfeiture of rights to be recognised under Dutch law that the creditor of the relevant right "acted in a manner which, by standards of reasonableness and fairness, is incompatible with the subsequent exercise of its right or authority."149 In the Sole Arbitrator's view, Respondent was under no obligation to refer to any contractual cap or limitation of liability when replying to Claimants' initial claims for payment and could limit itself to simply dealing with the specific claims made by Claimants, without raising each and every possible defence. Indeed, at that time, the Parties' debate focused on the triggering events for the application of Clause V of the SPAs, not on the detailed operation of the clause itself. By focusing on Claimants' specific claims and their details, Respondent did not create any "legitimate expectation" - to use the language of the Dutch Supreme Court's decision of 11 November 2016150 - for Claimants that it would not invoke further arguments in the future, in particular with respect to the detailed operation of Clause V of the Agreements, which is relevant to determine whether there is a cap on the amounts for which Respondent is liable.

175.

In any event, in the last paragraph of its letters of 24 February 2014 to Claimants, Respondent made a clear reservation of its rights to invoke further arguments in relation to Clause V ("These considerations are obviously not intended to conclude or close the discussions on Clause Five of the Agreement which, if necessary, [Respondent] will raise, with other grounds, at the time of the final settlement of the purchase price. Said discussions will naturally take place with [Respondent]'s total willingness to reach an understanding and its firm commitment to faithfully comply with its contractual obligations undertaken, in accordance with what was agreed by the parties").151 The language used by Respondent, in fact, signalled to Claimants that they should not have any expectation that Respondent would pay for the excess Acquisition Costs without any further debate regarding the interpretation and application of Clause V.

176.
In light of the above, Claimants cannot rely on the principle of venire contra factum proprium (rechtsverwerking) to prevent Respondent from raising defences as to the existence of a cap on any monies payable under Clause V of the SPAs.

8.2.2 The Parties’ Agreement on the Share Price Adjustment

8.2.2.1 The Applicable Principles of Contract Interpretation Under Dutch Law

177.

Claimants submit that, under Dutch law, the actual intent of the Parties should prevail over a purely literal meaning of individual clauses.152 In that respect, Claimants refer to the Dutch Supreme Court's decisions of 13 March 1981 in the Haviltex case153 and of 5 April 2013 in the Mexx case.154

178.

The two decisions cited by Claimants do not lead to the Sole Arbitrator to consider that the literal interpretation of contractual clauses should be excluded. As pointed out by Respondent, the Haviltex case indicates that the "social circles the parties belong to and what legal knowledge can be expected from such parties"155 is relevant to assess the parties' intent. This implies that the more professional a party, the less it would need to be protected from an unfavourable literal interpretation. As also pointed out by Respondent and noted in some commentaries,156 the Mexx case involved a ‘standard contract' imposed by one party on the other that was not assisted by legal counsel.

179.

For its part, Respondent refers to other decisions of the Dutch Supreme Court (the Meyer case decided on 19 January 2007157 and the Derksen case decided on 29 June 2007158) that emphasized the role of the literal method in interpreting commercial contracts.

180.
It appears from the review of the Dutch Supreme Court decisions submitted by the Parties that they underline the role of a literal interpretation for sophisticated parties, especially in a business context, and that they downplay that role in the case of less sophisticated parties.
181.

In this case, the Parties are business entities or persons that have experience in real-estate transactions or are related to such persons in the case of Mr [Claimant 2] (Claimant 2) who is Mr [Claimant 1] (Claimant 1)'s son.159 In particular, [Claimant 3] had been involved in the Expropriation Project for [Redacted] before the SPAs.160 Moreover, [Claimant 3]'s and [Claimant 4]'s corporate focus is largely on real estate as appears from their commercial registry abstracts161 while Mr [Claimant 1] was the CEO of [Redacted] as early as in April 1995.162 The SPAs also all include in annex a certificate issued by [Person 9], "[Claimant 3]'s regular lawyer" (according to [Person 7]'s witness statement),163 stating [Claimant 3]'s withdrawal of its preemption right,164 which tends to indicate that Claimants had access to legal advice in the course of the negotiation of the SPAs.

182.

In light of the above, the Sole Arbitrator considers that literal interpretation shall play an important role in the assessment of the SPAs. This notwithstanding, the Sole Arbitrator will also inquire as to whether the literal wording of the Agreements is contradicted or qualified by other elements that could reveal a distinct actual intent of the Parties, especially if the literal wording were to be unreasonable or unfair in the circumstances, as is prescribed by Articles 6.2 and 6.248 DCC, which respectively provide as follows:

"Article 6:2 DCC

1) An obligee and obligor must, as between themselves, act in accordance with the requirements of reasonableness and fairness.

2) A rule binding upon them by virtue of law, usage or a juridical act does not apply to the extent that, in the given circumstances, this would be unacceptable according to standards of reasonableness and fairness."165

[...]

Article 6:248 DCC

1) A contract not only has the juridical effects agreed to by the parties, but also those which, according to the nature of the contract, apply by virtue of law, usage or the requirements of reasonableness and fairness.

2) A rule binding upon the parties as a result of the contract does not apply to the extent that, in the given circumstances, this would be unacceptable according to standards of reasonableness and fairness."166

8.2.2.2 The Parties Agreed That the Downward Share Price Adjustment Would Be Limited to the Purchase Price

183.
In order to determine whether Claimants’ entitlement to a downward Share Price Adjustment is limited to the total purchase price that they paid in the amount of € 550,000, one first needs to examine the structure of the SPAs and the wording of the relevant clauses (a) before turning to all other relevant elements to determine the Parties’ intent (b).

(a) The Structure and Wording of the Relevant Clauses

184.
There are only two clauses in the SPAs that are relevant to the Parties’ dispute and that have been debated by the Parties, namely Clauses III and V.
185.

Clause III provides that, in light of Claimants’ "active and principal" participation in [Redacted]’s management prior to the SPAs ("El Comprador ha participado activamente y principalmente en la Administración de la Compañía"), Claimants are not entitled to any representations and warranties other than those expressly granted in Clause III. The representations and warranties under Clause III relate to the ownership of the shares and the absence of any liens, encumbrances or litigation concerning the shares.167 Due to Claimants’ intimate knowledge of [Redacted] prior to the SPAs, Clause III thus excludes any guarantee as to [Redacted]’s assets or liabilities.

186.
Clause V provides for a purchase price adjustment, either for a lower price in the event of higher Acquisition Costs (Clause V.A) or for a higher price in the event of lower Acquisition Costs (Clause V.B).
187.
Claimants plead that reading a liability limitation clause into the SPAs would be in contradiction with the Agreements’ other relevant clauses.168 Claimants refer to some language in Clause V, which mentions the reduction of "the current net value of the Company" ("el valor líquido actual de la Compañía") in case of higher Acquisition Costs (Clause V.A) or the "lower liability and, therefore, a greater value of that Company and of its shares" ("un menor pasivo y, por tanto, un mayor valor de dicha Compañía y de las acciones de la misma") in case of lower Acquisition Costs (Clause V.B). Claimants infer from this language that Clause V is not a mere share price adjustment clause and that "all kinds of costs"169 linked to the Acquisition Costs should be taken into account to set the price of the shares as per Clause V.A and be assumed by Respondent.
188.

The Sole Arbitrator disagrees with Claimants’ interpretation. In Clause V, the references to the value of [Redacted] or its liabilities are made in relation to "the total price of the shares" ("el precio total de las acciones") (Clause V.A) or to "a greater price for all the shares in the Company" ("mayor precio de la totalidad de las acciones de Compañía [Redacted]") (Clause V.B).170 However, no references are made with respect to the allocation of the Acquisition Costs themselves. Furthermore, the references in Clause V.A to a reduction of the price of the shares ("se minorará") or to a refund of such price to Claimants ("reintegrar") in the event of higher Acquisition Costs are exclusive of the payment by the seller (or rather Respondent as its successor) of any amounts beyond the price paid by the buyers (Claimants) for the shares. Similarly, Clause V.C on provisional liquidations of the Share Price Adjustment mentions the possibility to refund a part of the purchase price on an interim basis ("devoluciones"), but not to pay any amount in excess of the purchase price. Therefore, the express language of Clause V indicates that it is only a share price adjustment provision and that, in the event of higher Acquisition Costs, the downward Share Price Adjustment is limited to the purchase price.

189.
The analysis of the structure of the SPAs and their literal reading thus leads the Sole Arbitrator to conclude that (i) Respondent's liability is covered by the limited representations and warranties in Clause III (which itself does not include any representations or warranties as to the Acquisition Costs) and (ii) Clause V provides that any downward Share Price Adjustment is limited to the purchase price.

(b) Other Elements to Ascertain the Parties' Intent

190.
Other elements confirm the above analysis that Claimants are entitled only to a downward Share Price Adjustment in the amount of the price that they paid for the shares, namely € 550,000.

• The Parties Did Not Agree to Split Liability as to the Acquisition Costs

191.

Claimants stress that, beyond the literality of Clause V, "the Parties agreed simply to a carveout of the final liability for higher costs of expropriation"171 and that this interpretation is the only one which is reasonable or commercially logical.

192.
The Sole Arbitrator does not find that the Parties' actual intent was different from the wording of the SPAs.
193.

First, there is not a single piece of contemporaneous evidence pointing that Claimants agreed to buy [Redacted]'s stake in [Redacted] only if Respondent's predecessor committed to bear the risk of the final Acquisition Costs, as claimed in Mr [Person 6]'s witness statement.172

194.

Secondly, the Acquisition Costs are actually borne by [Redacted] itself, not its shareholders (be they Claimants after the SPAs were entered into or Respondent's predecessor before). This clearly results from Clause III, which excludes any indemnification for Claimants if, post-closing, the value of [Redacted]'s assets diminished or the value of its liabilities increased as a consequence of events prior to the closing (or the effective date of sale of the shares).173 Indeed, [Redacted]'s operational results could be impacted by excess Acquisition Costs, which would affect the value of the shares and potential dividend distributions. However, neither Respondent nor its predecessor can be responsible for the company's profits or losses in the absence of any representations and warranties to that effect. In that respect, as pointed out by Respondent,174 after the SPAs were entered into, Claimants as shareholders of [Redacted] received substantial dividends (€ 4,708,001 for 2002175 and € 5,000,000 for 2003,176 as shown in the company’s financial statements for these years).

• The Parties Agreement Was Not Unreasonable in the Context

195.

Claimants further submit that it would be unreasonable to hold that Claimants would have accepted an unequal limitation of liability, i.e., € 550,000 in case of a downward Share Price Adjustment and no cap in the event of an upward Share Price Adjustment. In that respect, Claimants argue that "[w]hereas section A of Clause V of the SPAs uses the word "reintegrar" when it refers to a final expropriation liability and thus to the Claimants' right to demand the Share Price Adjustment, section B refers to the word "satisfacer" should the final liability had resulted lower and [Respondent] had had the right to claim the Share Price Adjustment from the Claimants. According to the Respondent, the literal interpretation of the word "satisfacer" or "pagar" is much broader than "reintegrar" [...]. Therefore, according to [Respondent]'s interpretation of the SPAs, the limitation of the liability to the price paid for the shares in 2001 would only benefit [Respondent]. According to this implausible interpretation of the SPAs, the Claimants accepted to share with [Respondent] 55% of any savings in the final determination of the expropriation of the land; but would have willingly limited their possibilities to share any additional liability to 550,000€. This is simply inconceivable."177

196.

Aside from the fact that the language of Clause V of the SPAs already limits the amount of a downward Share Price Adjustment to the purchase price of the shares by referring to a reduction of the price of the shares ("se minorará") or to a refund of such price to Claimants ("reintegrar", "devoluciones"),178 Claimants’ argument as to the unreasonableness of an unequal liability limitation must also fail for the following reasons.

197.

First, in Clause V of SPAs, the Parties assessed the Acquisition Costs at 8,133 pesetas (equivalent to € 48,88) per square metre. This valuation established in the SPAs in October 2001 was much below the expropriation prices set in 1998 by the Expropriation Jury at 12,210 pesetas (equivalent to € 73.38) per square metre.179 Thus, at the time the SPAs were entered into, although [Redacted]’s appeals before the relevant state courts were pending, it was clear that the actual Acquisition Costs could be well above those foreseen in the SPAs. In view of the much higher price set by the Expropriation Jury for the expropriated plots, the case that [Redacted]’s liabilities would be reduced trough lower-than-expected expropriation prices, thus leading to an upward Share Price Adjustment, was less likely than the case of an increase of the Acquisition Costs, leading to a diminution in the value of the shares and thus triggering a downward Share Price Adjustment. Therefore, one could deem that any cap on an upward Share Price Adjustment was rather unlikely to come into play.

198.

Secondly, and most relevantly, the Parties' bargain, as is apparent from Clause V, is that if the Acquisition Costs turned out to be lower than predicted, thereby reducing [Redacted]'s liabilities, the value of the shares should increase, which should be reflected by an increase of the price of the shares. Conversely, if the Acquisition Costs ended up being higher than anticipated, the buyers of the shares should obtain the shares, at a lower price, but not at a negative price. The Sole Arbitrator agrees with Respondent that a negative price is not allowable in a sale and purchase agreement under Dutch law. In that respect, Article 7:1 DCC provides that a sale and purchase agreement "is the agreement under which one of the parties engages himself to deliver a thing and the other party to pay a price in money in return" while section 1 of Article 7:26 DCC provides that the buyer "has the obligation to pay the purchase price." The obligation to "pay" a "purchase price" under these provisions of the DCC necessarily means that the price cannot be negative. Reading these provisions as allowing a negative price would actually mean that the seller should pay the purchaser. This would be at odds with the purchaser's obligation to provide consideration for the thing acquired. Even in the case of a loss-making company, the negative net value of the company would not entail that a purchaser of its shares should be released from the obligation to pay a price for acquiring them (the price usually being all the lower as the company's losses are greater and possibly zero if the company is declared to be insolvent). However low it may be, the payment of the price as consideration for the shares is justified because the purchaser believes that the loss-making company can be managed or its assets sold so as to generate profits. One must thus distinguish the net value of a company, which may be negative (and may lead to the negotiation of specific representations and warranties as to the company's assets and liabilities), from the price of its shares, which may be adjusted but not become negative. Even aside from the issue of whether selling shares at a negative price would be allowed under Dutch law, no reasonable person would sell shares at a negative price, i.e., in effect pay the purchaser for buying the shares, when the company whose shares are sold is financially sound as was the case for [Redacted].180

8.2.3 The Sole Arbitrator’s Decision

199.
Any interpretation of Clause V that would lead to consider that it is not only a share price adjustment provision would be tantamount to allowing Claimants to obtain damages for warranties that are not part of the Parties' bargain. Any such interpretation would also impose on the seller, or, in this case, its successor (Respondent) the obligation to pay for the debts of a company in which it does not have any longer any decision-making power, let alone any rights to dividends - such a commitment should indeed be apparent from the Parties' dealings, which is not the case here. Moreover, if the seller was to participate in such liabilities, one would have expected the seller to have the right to be informed and, as the case may be, to take part or even lead in the management of the procedures on the expropriation prices (as is seen very often in share purchase agreements that include representations and warranties of the seller as to the assets and liabilities).
200.
Regarding the limit of the downward Share Price Adjustment to the purchase price of € 550,000, the literal interpretation of the SPAs is in line with the principles of reasonableness and fairness applicable under Articles 6:2 and 6:248 DCC to the contractual relationship of business professionals such as the Parties.
201.

It is not required to examine whether Claimants’ calculation of their damages is accurate given that Respondent acknowledged an exposure higher than € 550,000 for the case in which the Sole Arbitrator would have determined that the Share Price Adjustment was not capped at that amount.181

202.

In light of the above, Respondent is liable for the total purchase price of € 550,000 paid by Claimants for the shares in [Redacted]. Respondent shall reimburse each Claimant in accordance with the amount that he/it paid to acquire his/its shares under his/its own SPA.182

203.

Accordingly, Claimants’ prayer for relief at § 167(b) of their Statement of Claim ("Orders the Respondents to pay [...] Mr [Claimant 1] the amount of 1,166,054.22 €, [...] Mr [Claimant 2] the amount of 591,794 €, […] [Claimant 3] the amount of 284,938.06 € [...] and [Claimant 4] the amount of 1,198,201.08 €") is partly granted and partly dismissed.

9. CLAIMANTS’ CLAIM FOR INTEREST

9.1 The Parties’ Positions

9.1.1 Claimants’ Position

204.

Claimants submit that the Dutch commercial statutory interest of Article 6:119a DCC, currently set at 8%, should be applied,183 as the SPAs were entered into within the Parties’ "professional activity."184

205.

Claimants contend that interest should (i) be compounded on a six-month basis and (ii) start running as of 5 March 2014, i.e., one month after Claimants’ "notification and demand for payment of the share price adjustment made by the Claimants on 3 February 2014."185 At the hearing, Claimants (i) updated their interest calculation to € 1,464,791 for interest compounded every six months and (ii) further to Respondent’s objection that no bi-annual interest could apply, also provided an interest calculation compounded on an annual basis in the amount of € 1,439,401.186 Respondent, who was afforded the opportunity to comment on these calculations, did not object to them.187

9.1.2 Respondent’s Position

206.

Respondent submits that if Claimants were to be owed any monies pursuant to the Share Price Adjustment, the starting point for interest should be the date on which the Final Award is notified.188 According to Respondent, this is justified under section 7 of Article 6:119a DCC, which permits to postpone the starting point of interest in the event that the creditor is to blame for any delay, as is the case with Claimants.189

207.

In any event, Respondent stresses that the applicable interest should not be the Dutch statutory commercial interest of Article 6:119a DCC, but rather the statutory civil interest under Article 6:119 DCC.190 According to Respondent, the Dutch statutory commercial interest of Article 6:119a is reserved to cases of late delivery of goods or late provision of services.191

208.
Last, Respondent considers that, even if the Sole Arbitrator were to decide to apply the statutory commercial interest of Article 6:119a, capitalisation should accrue on an annual basis, and not on a bi-annual basis as demanded by Claimants.192

9.2 The Sole Arbitrator’s Analysis and Decision

9.2.1 The Sole Arbitrator’s Analysis

209.
The Parties rely on different statutory provisions to determine the applicable interest rate.
210.

On the one hand, Claimants consider that Article 6:119a DCC should govern interest. Article 6:119a provides as follows:

"1) The compensation due on account of a delay in payment of a sum of money shall, in the case of a commercial contract, consist of statutory interest over such sum as from the date following the date contracted as final payment date until and including the date of the actual payment of that sum by the obligor. A ‘commercial contract' means a contract for value pursuant to which one or more parties must give or do something and which is made by and between one or more natural persons acting in the conduct of a profession or business or by and between legal persons.

2) Where no final payment date is agreed, statutory interest shall be due by operation of law:

a. as from 30 days after the beginning of the date following that on which the obligor received the invoice, or

b. where there is no fixed date of receipt of the invoice or where the obligor received the invoice before receipt of the performance, as from 30 days after the beginning of the day following that on which the performance is received, or

c. where the obligor stipulated a period within which acceptance of the performance must be made or within which it must be ascertained whether the performance is in conformity therewith, as from 30 days after the beginning of the day following that on which the obligor accepted or ascertained the conformity of the performance or, where he did not express himself on approval or acceptance, as from 30 days after the beginning of the day following that on which the period will lapse.

3) After the end of a year the amount over which statutory interest is calculated shall always be increased with the interest due over that year.

[...]

7) The statutory interest is chargeable except as far as the delay cannot be attributed to the debtor."193

211.

On the other hand, Respondent considers that if it were to owe any interest, Article 6:119 DCC should apply. Article 6:119 provides as follows:

"1) Damages due on account of delay in the payment of a sum of money shall consist of statutory interest on that sum over the period in which the obligor has been in default of payment.

2) At the end of every year, the amount on which statutory interest is calculated shall be increased by the interest due over that year.

3) If contractual interest exceeds that due pursuant to the preceding paragraphs, it shall accrue instead of statutory interest, as from the obligor's default."194

212.

The statutory commercial rate under Article 6:119a is much higher than the statutory civil rate under Article 6:119 (e.g., approximately 2.75 times for 2014 and roughly 4 times for 2015-2018).195

213.

At the hearing, upon questioning by the Sole Arbitrator, Claimants confirmed that Article 6:119a DCC derives from EU Directive 2011/7/EU of 16 February 2011 on combatting late payment in commercial transactions.196 This directive aims at ensuring (through a higher rate than domestic legal rates) that the invoices issued in connection with the provision of services or goods within the EU are paid timely, as was noted by Respondent when arguing that Article 6:119a DCC is reserved to cases of late delivery of goods or late provision of services.197

214.
The fact that Article 6:119a DCC applies to commercial contracts, as provided in its section 1, does not detract from the fact that this provision applies to "a delay in payment" of a sum certain (Article 6:119a, section 1) in connection with an "invoice" relating to the provision of goods or services (Article 6:119a, section 2). In this case, the date on which the Share Price Adjustment became payable has no connection to the provision of goods or services. Rather, the Share Price Adjustment is linked to Claimants' own obligation to establish that they met the conditions that trigger the Share Price Adjustment under Clause V of the SPAs, which obliged Claimants to identify and value all of the relevant expropriated plots and surface area before being entitled to any amounts under this provision.
215.
Accordingly, Claimants may only rely on the statutory civil interest of Article 6:119 DCC.
216.

Furthermore, as per section 1 of Article 6:119, interest shall apply on the amounts due for the Share Price Adjustment "over the period in which the obligor has been in default of payment." It is only as of the date of this Final Award that Respondent became liable for these amounts. Indeed, it is at the hearing held on 19-20 December 2018 that Claimants provided the explanations that convinced the Sole Arbitrator that Claimants had properly identified plot no. 58. Prior to that (and, in fact, prior to the Sole Arbitrator studying in depth all of the arguments exchanged at the hearing in that respect), the Sole Arbitrator considers that the elements provided by Claimants before the arbitration (Claimants' letters of 13 August 2003198 and of 3 February 2014199) as well as in the Request and in the Statement of Claim and the Forest Report did not contain sufficient details on the identification of plot no. 58.

217.
Given that prior to this Final Award Respondent had no obligation to pay any monies to Claimants, the former has not yet been "in default of payment" pursuant to Article 6:119 DCC. No pre-award interest is therefore awarded on the monies owed to Claimants.
218.

However, Claimants are also claiming post-award interest, as appears from the fact that they have run their interest calculation (albeit based on Article 6:119a DCC and not on Article 6:119 as determined by the Sole Arbitrator) as at the date of the Statement of Claim ("which currently amount to"200) and as at the date of the hearing ("que a día de hoy ascienden"201). This entails that Claimants consider that interest should continue to accrue after the rendering of the Final Award until Respondent has paid such interest in full. The Sole Arbitrator will thus award post-award interest as per the appropriate statutory rate.

9.2.2 The Sole Arbitrator’s Decision

219.

In light of the above, the Sole Arbitrator (i) dismisses Claimants' claim for pre-award interest and (ii) grants Claimants post-award interest at the Dutch statutory rate under Article 6:119 DCC as of the date of receipt of the Final Award by Respondent until full payment, the precise quantification of interest (including any compounding of interest if section 2 of Article 6:119 DCC was to come into play in the future202) being left to actual payment or enforcement of this Final Award.

220.

Accordingly, Claimants’ prayer for relief at § 167(c) of their Statement of Claim (request that the Sole Arbitrator order "the Respondent to pay the Claimants the corresponding interests which currently amount to 1,361,549€, of which 119,706€ correspond to [Claimant 3], 503,379€ correspond to [Claimant 4], 489,874€ correspond to Mr. [Claimant 1] and 248,620€ correspond to Mr. [Claimant 2]") is partly granted and partly rejected.

10. COSTS

10.1 Principles Applicable to the Apportionment of the Costs of the Arbitration

221.
Pursuant to Article 38(4) of the Rules, this Final Award shall determine the costs of the arbitration and decide of their allocation between the Parties.
222.
Pursuant to Article 38(1) of the Rules, the costs of the arbitration are composed of the fees and expenses of the Sole Arbitrator and the ICC administrative expenses, as well as "the reasonable legal and other costs" of the Parties.
223.

Article 38(5) of the Rules provides that, in making decisions as to the allocation of costs, the Sole Arbitrator "may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and costs-effective manner." However, the Rules do not impose the application of a specific allocation test, which as a consequence has been recognised as leaving the apportionment of costs to the discretion of the arbitral tribunal. In that respect, the Sole Arbitrator considers relevant to take into account (i) the ‘costs follow the event’ principle (which, although not universal, is now very widely applied in international arbitration203) and (ii) the Parties’ procedural behaviour.

10.2 Decisions on the Apportionment of the Costs of the Arbitration

10.2.1 The Parties’ Legal and Other Costs

224.
In their Statement of Costs (as corrected on 8 February 2019), Claimants claimed a total in legal fees and disbursements of € 193,337.24 (including attorney fees, expert fees and expenses). Claimants also added that "[a]s per the agreement with the client, Hogan Lovells has the right to issue an additional invoice for an amount of € 115,818.55 should the Respondent be ordered to pay in the proceedings."204 With the success fee, Claimants’ legal fees and disbursements would thus amount to € 309,155.79.
225.
In its Statement of Costs, Respondent claimed a total in legal fees and disbursements of € 248,089.
226.
The legal and other costs incurred by the Parties for the arbitration are reasonable in view of the complexity of the dispute and of the extent of the activities performed to present the Parties' position.
227.
The ‘procedural behaviour' criterion is neutral in this case. Both sides have been represented by counsel with considerable experience in ICC arbitration and have cooperated in exemplary fashion to run the proceedings expeditiously.
228.
As concerns the ‘cost follow the event' criterion, Claimants have been awarded only 17% of the amount that they claimed in principal (€ 550,000 / € 3,240,988.79) and have largely failed on their interest claim. In this case, however, the ‘cost follow the event' criterion cannot be based solely on the percentage of Claimants' success on their monetary claims. In this regard, the vast majority of the Parties' efforts was focused on the issue of whether Claimants met the threshold conditions that triggered the Share Price Adjustment under Clause V of the SPAs (section 7 above). Claimants prevailed on this issue and, in the Sole Arbitrator's view, this success weighs more on the application of the ‘cost follow the event' criterion than a strict percentage of success as to the claimed monetary amounts.
229.
In light of the above, the Sole Arbitrator finds it appropriate that each of the Parties bear their own legal and other costs.

10.2.2 The Fees and Expenses of the Sole Arbitrator and the ICC Administrative Expenses

230.
At its session of 18 April 2019, after approving the draft Final Award, the Court fixed the ICC administrative expenses and the fees and expenses of the Sole Arbitrator, at US$ 120,000 (the "ICC Costs of Arbitration").
231.

The ICC Costs of Arbitration were advanced by each side in equal shares (US$ 60,000 each).205

232.
The Sole Arbitrator sees no reason to treat the ICC Costs of Arbitration differently from the legal and other costs. Accordingly, the Sole Arbitrator decides that each side, Claimants, on the one hand, and Respondent, on the other hand, shall bear half of the ICC Costs of Arbitration. Since these costs have been fully paid by each side in equal shares no reimbursements are necessary.

11. DISPOSITIVE SECTION

233.

Having dealt with all of the issues and Parties' claims and for the reasons cited above, the Sole Arbitrator renders the following Final Award in which he:

1. Declares that [Respondent] is liable for a purchase price adjustment in the amount of € 550,000 under Clause V of the Agreements and orders [Respondent] to pay Claimants this sum divided between them as follows:

- € 48,750 to [Claimant 3];
- € 200,500 to [Claimant 4];
- € 199,500 to [Claimant 1]; and
- € 101,250 to [Claimant 2].

2. Orders [Respondent] to pay Claimants post-award interest on the above listed amounts at the Dutch statutory interest rate under Article 6:119 of the Dutch Civil Code as of the date of receipt of the Final Award by [Respondent] until full payment.

3. Orders the Parties to bear their respective legal and other costs.

4. Orders that no reimbursement shall be made between the Parties with respect to the costs of arbitration fixed by the ICC at US$ 120,000.

5. Dismisses all other claims, counterclaims and prayers for relief and/or procedural requests.

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