|2009 Petrochemical Law||Organic Law for the Development of Petrochemical Activities (16 June 2009) (C-8)|
|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings of 2006|
|Barrientos WS1||Witness Statement of Victor D. Barrientos (28 February 2013)|
|Barrientos WS2||Second Witness Statement of Victor D. Barrientos (30 December 2013)|
|Bond Offering Circular||Offering Circular - Bond Offering of $250,000,000 between FertiNitro Finance Inc and FertiNitro (8 April 1998) (C-115)|
|CERTs||Special Certificates of Tax Refunds (Certificados Especiales de Reembolso Tributario)|
|CLA-[#]||Claimants’ Legal Authority|
|Cls. Mem.||Claimants’ Memorial (4 June 2012)|
|Cls. PHB||Claimants’ Post-Hearing Brief (30 January 2015)|
|Cls. Rej.||Claimants’ Rejoinder on Jurisdiction (14 March 2014)|
|Cls. Reply||Claimants’ Reply on the Merits and Counter-Memorial on Jurisdiction (2 September 2013)|
|Comisario Report||FertiNitro Report from the Statutory Auditor and Consolidated Financial Statements (7 September 2006) (C-63)|
|EPC Contract||Engineering, Procurement and Construction Contract by and between FertiNitro and Snamprogetti (8 April 1998) (C-24)|
|Esty ER1||Expert Report of Benjamin C. Esty (23 August 2013)|
|Esty ER2||Second Expert Report of Benjamin C. Esty (14 March 2014)|
|Expropriation Decree||Decree 7,713 (10 October 2010) (Official Gazette No. 380,113 of 11 October 2010) (C-9)|
|Expropriation Law||Expropriation Law for Public or Social Benefit (1 July 2002) (Official Gazette of the Republic No. 37,475 of 1 July 2002) (R-9, R-53, C-140)|
|FertiNitro||Joint venture companies Fertilizantes Nitrogenados de Oriente, SA; Fertilizantes Nitrogenados de Oriente, CEC; Fertilizantes Nitrogenados de Venezuela, SRL, and Fertilizantes Nitrogenados de Venezuela, FertiNitro, CEC|
|First (September) Hearing||Hearing on Jurisdiction, Merits, and examination of Fact Witnesses, held on 8 September 2014 and from 10 to 12 September 2014|
|First Advantis Report||Advantis Report entitled "Valoracíon de FertiNitro" (May 2011) (R-86)|
|Flores ER1||Expert Report of Daniel Flores (28 February 2013)|
|Flores ER2||Second Expert Report of Daniel Flores (3 March 2014)|
|Flórez WS1||Witness Statement of Edgar A. Flórez (28 February 2013)|
|Giles ER1||Expert Report of Tim Giles (2 June 2012)|
|Giles ER2||Second Expert Report of Tim Giles (30 August 2013)|
|Gwaltney WS1||Witness Statement of Brent W. Gwaltney (30 May 2012)|
|Gwaltney WS2||Second Witness Statement of Brent W. Gwaltney (20 August 2013)|
|Historical Claims||KOMSA’s claims regarding tax related measures and VAT credits|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (18 March 1965)|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|JIA||Joint Investors Agreement by and among Pequiven, Koch Oil SA, Snamprogetti Netherlands BV, and Polar Uno, CA (8 April 1998) (C-18)|
|KNI||Koch Nitrogen International Sárl|
|KOMSA||Koch Minerals Sárl|
|KOMSA Draft MOU||KOMSA Draft Memorandum of Understanding (non-dated) (C- 92)|
|Municipal Decree||Decree D.A.M.S.B.-042-A-2006 (14 November 2006) (C-48)|
|Municipal Ordinance||Ordinance for Taxes on Industrial, Commercial, Service or Similar Economic Activities (29 December 2005) (C-45)|
|Nunez WS1||Witness Statement of Carolina Nuñez (28 February 2013)|
|Offtake Agreement||Offtake Agreement by and among Pequiven, IPSL and Koch Oil SA as Buyers and FertiNitro as Seller (8 April 1998) (C-19).|
|Parra WS1||Witness Statement of Melquíades A. Parra (29 May 2012)|
|PDVSA||Petróleos de Venezuela, S.A.|
|Pequiven Draft MOU||Pequiven Draft Memorandum of Understanding (non-dated) (C- 93)|
|Resp. C-Mem.||Counter-Memorial of the Bolivarian Republic of Venezuela (Merits) (28 February 2013)|
|Resp. PHB||Post-Hearing Brief of the Bolivarian Republic of Venezuela (30 January 2015)|
|Resp. Preliminary Objections||Preliminary Objections of the Bolivarian Republic of Venezuela to the Jurisdiction of the Arbitral Tribunal (28 February 2013)|
|Resp. Rej.||Rejoinder of the Bolivarian Republic of Venezuela (Merits) (3 March 2014)|
|Resp. Reply on Jurisdiction||Reply on Jurisdictional Objections of the Bolivarian Republic of Venezuela (3 March 2014)|
|RfA||Claimants’ Request for Arbitration (28 June 2011)|
|RLA-[#]||Respondent’s Legal Authority|
|Sanders ER1||Expert Report of Richard Sanders (30 May 2012)|
|Sanders ER2||Second Expert Report of Richard Sanders (27 August 2013)|
|Science and Technology Law||Organic Law on Science, Technology and Innovation (effective as of 1 January 2006) (C-43)|
|Second (November) Hearing||Hearing on Merits and Quantum and examination of Expert Witnesses, held on 23 to 26 November 2014|
|Second Advantis Report||Advantis Report entitled "Valoracíon de FertiNitro" (July 2011) (C-157)|
|Sorlie WS2||Second Witness Statement of Jim Sorlie (26 July 2013)|
|Third (June) Hearing||Reconstitution Hearing held on 9 to 10 June 2016|
|Tr. Day. [#page. line(s)] (Speaker(s))||Transcripts of Hearings|
|Tribunal or Arbitral Tribunal||Arbitral Tribunal constituted on 8 November 2011|
|Urea Decree||Decree 5,218 (26 February 2007) (C-80)|
|Joint Resolution by the Ministry of the People’s Power for Agriculture and Land, the Ministry of the People’s Power for|
|Urea Resolution||Light Industry and Trade, and the Ministry of the People’s Power for Energy and Petroleum (Official Gazette No. 38,674) (3 May 2007) (C-82)|
|VAT Law||Law of Partial Reform of the Law on Value Added Tax (11 August 2004) (C-55)|
|Villarroel WS2||Second Witness Statement of Aníbal Villarroel (30 December 2013)|
|AAPL v. Sri Lanka||Asian Agricultural Products Limited v. Democratic Socialist Republic of Sri Lanka, ICSID Case No ARB/87/3, Award (27 June 1990) (RLA-42)|
|Abaclat v. Argentina||Abaclat and others (formerly Giovanna A. Beccara and others) v. The Argentine Republic, ICSID Case No. ARB/07/5, Decision on Jurisdiction and Admissibility (4 August 2011) (RLA-31)|
|ADC Affiliate v. Hungary||ADC Affiliate Limited and ADC & ADMC Management Limited v. Republic of Hungary, ICSID Case No. ARB/03/16, Award (27 September 2006) (CLA-16)|
|Ambiente Ufficio v. Argentina||Ambiente Ufficio S.p.A. and others v. Argentine Republic, ICSID Case No. ARB/08/9 (formerly Giordano Alpi and others v. Argentine Republic), Decision on Jurisdiction and Admissibility (8 February 2013) (CLA-90)|
|Autopista v. Venezuela||Autopista Concesionada de Venezuela, C.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/00/5, Award (23 September 2003) (RLA-60)|
|Azurix v. Argentina||Azurix Corp. v. Argentine Republic, ICSID Case No. ARB/01/12, Award (14 July 2006) (CLA-43)|
|Bayindir v. Pakistan||Bayindir Insaat Turizm Ticaret Ve Sanayi A.§. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction (14 November 2005) (CLA-11)|
|BG Group v. Argentina||BG Group Plc. v. Republic of Argentina UNCITRAL, Final Award, (24 December 2007) (CLA-37)|
|Biwater v. Tanzania||Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award (18 July 2008) (CLA-24)|
|Burlington v. Ecuador||Burlington Resources, Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Reconsideration and Award (7 February 2017)|
|Caratube v. Kazakhstan||Caratube International Oil Company LLP v. The Republic of Kazakhstan, ICSID Case No. ARB/08/12, Award (5 June 2012) (RLA-107)|
|Chevron v. Ecuador||Chevron Corporation and Texaco Petroleum Corporation v. The Republic of Ecuador, UNCITRAL, Final Award (31 August 2011) (CLA-63)|
|Chorzów Factory Case||Chorzów Factory Case (Germany v Poland), PCIJ Series A, No. 17, Decision on Merits (13 September 1928) (CLA-49)|
|CME v. Czech Republic||CME Czech Republic B.V. v. Czech Republic, UNCITRAL, Partial Award (13 September 2001) (CLA-14)|
|CMS v. Argentina||CMS Gas Transmission Company v. Argentine Republic, ICSID Case No. ARB/01/8, Award (12 May 2005) (CLA-36) (CLA-130)|
|ConocoPhillips v. Venezuela||ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V. and ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/30, Decision on Jurisdiction and the Merits (3 September 2013) (CLA-155)|
|CSOB v. Slovak Republic||Ceskoslovenská Obchodní Banka, A.S. v. Slovak Republic, ICSID Case No. ARB/97/4, Decision on Objections to Jurisdiction (24 May 1999) (RLA-5)|
|Daimler v. Argentina||Daimler Financial Services A.G. v. Argentine Republic, ICSID Case No. ARB/05/1, Decision on Annulment (7 January 2015)|
|Delaume, ICSID Arbitration||G. R. Delaume, ICSID and the Transnational Financial Community (1986) (CLA-96)|
|Deutsche Bank v. Sri Lanka||Deutsche Bank AG v. The Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/09/02, Award (31 October 2012) (CLA-100)|
|EDF v. Romania||EDF (Services) Ltd. v. Romania, ICSID Case No. ARB/05/13, Award (8 October 2009) (RLA-85)|
|El Paso v. Argentina||El Paso Energy International Company v. The Argentine Republic, ICSID Case No. ARB/03/15, Award (31 October 2011) (CLA-52)|
|Electrabel v. Hungary||Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) (RLA-110)|
|ELSI||Elettronica Sicula S.p.A. (ELSI) (United States of America v. Italy), ICJ, Judgment, (20 July 1989) (CLA-41)|
|EnCana v. Ecuador||EnCana Corporation v. Republic of Ecuador, UNCITRAL, Award (3 February 2006) (RLA-71)|
|Fedax v. Venezuela||Fedax N.V. v. The Republic of Venezuela, ICSID Case No. ARB/96/3, Decision on Jurisdiction (11 July 1997) (CLA-142)|
|Flughafen v. Venezuela||Flughafen Zürich A.G. and Gestión e Ingeniería IDC S.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/10/19, Award (18 November 2014) (RLA-154)|
|GAMI v. Mexico||GAMI Investments, Inc. v. United Mexican States, UNCITRAL, Award (15 November 2004) (RLA-64)|
|GEA Group v. Ukraine||GEA Group Aktiengesellschaft v. Ukraine, ICSID Case No. ARB/08/16, Award (31 March 2011) (RLA-30)|
|Gemplus v. Mexico||Gemplus S.A., SLP, S.A. and Gemplus Industrial, S.A. de C.V. v. United Mexican States, ICSID Cases Nos. ARB(AF)/04/3 and ARB(AF)/04/4, Award (16 June 2010) (CLA-54)|
|Glamis v. USA||Glamis Gold, Ltd. v. United States of America, UNCITRAL, Award, (8 June 2009) (RLA-83)|
|Global Trading v. Ukraine||Global Trading Res. Corp. and Globex Int'l v. Ukraine, ICSID Case No. ARB/09/11, Award (1 December 2010) (RLA-27)|
|Gold Reserve v. Venezuela||Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Award (22 September 2014) (CLA-156)|
|Gotanda - Compound Interest
||John Yukio Gotanda, Compound Interest in International Disputes (2003) (CLA-61)|
|HICEE v. Slovakia||HICEE B.V. v. Slovak Republic, UNCITRAL, Partial Award (23 May 2011)|
|Hulley v. Russia||Hulley Enterprises Limited (Cyprus) v. The Russian Federation, PCA Case No. AA 226, Final Award (18 July 2014) (CLA-152)|
|ICSID Convention History||ICSID, Convention on the Settlement of Investment Disputes between States and Nationals of Other States: Documents Concerning the Origin and the Formulation of the Convention, Volume II, Part 1 (1968) (RLA-6)|
|ICSID Convention: A||Christoph H. Schreuer et al., The ICSID Convention: A|
|Commentary||Commentary (2d ed. 2009) (RLA-21) (RLA-106) (CLA-3)|
|Inmaris v. Ukraine||Inmaris Perestroika Sailing Maritime Services GmbH and others v. Ukraine, ICSID Case No. ARB/08/8, Decision on Jurisdiction (8 March 2010) (CLA-91)|
|Joy Mining v. Egypt||Joy Mining Machinery Limited v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction (6 August 2004) (RLA-10)|
|Kardassopolous v. Georgia||Kardassopoulos v. Republic of Georgia, ICSID Case No. ARB/05/18 and ARB/07/15, Award (28 February 2010) (CLA-20)|
|Lauder v. Czech Republic||Ronald S. Lauder v. Czech Republic, UNCITRAL, Final Award (3 September 2001) (CLA-45)|
|Lemire Award||Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, Award (28 March 2011) (RLA-89)|
|Lemire v. Ukraine||Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability (14 January 2010) (CLA-89)|
|Levi v. Peru||Renée Rose Levy de Levi v. The Republic of Peru, ICSID Case No. ARB/10/17, Award (26 February 2014) (CLA-150)|
|LG&E v. Argentina||LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability (3 October 2006) (CLA-39) (RLA-123)|
|LIAMCO v. Libya||Libyan American Oil Company (LIAMCO) v. Libyan Arab Republic, Award, 20 I.L.M. 1 (12 April 1977) (RLA-37)|
|Mann - British Treaties||F.A. Mann, British Treaties for the Promotion and Protection of Investments, 52 British Yearbook of International Law 241 (1981) (CLA-86)|
|Mann - Further Studies||F. A. Mann, Further Studies in International Law - Compound Interest as an Item of Damage (1990) (CLA-60)|
|Mann - Legal Aspect of Money||F.A. Mann, The Legal Aspect of Money (4th ed, 1982)|
|Marboe - Calculation of Compensation||Irmgard Marboe, Calculation of Compensation and Damages in International Investment Law, (2009) (CLA-137)|
|Methanex v. USA||Methanex Corporation v. United States of America, UNCITRAL, Final Award of the Tribunal on Jurisdiction and Merits (3 August 2005)|
|MHS v. Malaysia||Malaysian Historical Salvors Sdn Bhd v. Malaysia, ICSID Case No. ARB/05/10, Decision on Application for Annulment (16 April 2009) (RLA-23)|
|Mobil v. PDVSA||Mobil Cerro Negro Ltd v. Petróleos de Venezuela, S.A. and PDVSA Cerro Negro, S.A., ICC Case No. 15416/JRF/CA, Final Award (23 December 2011) (EO-45)|
|Mytilineos v. Serbia||Mytilineos Holdings SA v. State Union of Serbia & Montenegro and Republic of Serbia, UNCITRAL, Partial Award on Jurisdiction (8 September 2006) (CLA-92)|
|National Grid v. Argentina||National Grid P. L. C. v. Argentine Republic, UNCITRAL, Award (3 November 2008) (CLA-32)|
|Noble Venture v. Romania||Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award (12 October 2005) (RLA-67).|
|Occidental UNCITRAL||Occidental Exploration and Production Co. v. Republic of E c uador, UNCITRAL (LCIA), Case No. UN 3467, Final Award (1 July 2004) (CLA-27)|
|Occidental v. Ecuador||Occidental Petroleum Corporation and Occidental Exploration and Production Company v. The Republic of Ecuador, ICSID Case No. ARB/06/11, Award (5 October 2012) (CLA-129)|
|Ooestergetel v. Slovak Republic||Oostergetel v. Slovak Republic, UNCITRAL, Decision on Jurisdiction (30 April 2010) (CLA-147)|
|Pantechniki v. Albania||Pantechniki S.A. Contractors & Engineers v. Republic of Albania, ICSID Case No. ARB/07/21, Award (30 July 2009) (CLA-97)|
|Paushok v. Mongolia||Sergei Paushok, CJSC Golden East Company and CJSC Vostokneftegaz Company v. Government of Mongolia, UNCITRAL, Award on Jurisdiction and Liability (28 April 2011) (RLA-94)|
|Pey Casado v. Chile||Víctor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award (8 May 2008) (RLA-102)|
|Philip Morris Award||Philip Morris Brand Sari, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Award (8 July 2016)|
|Philip Morris v. Uruguay||Philip Morris Brand Sarl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Decision on Jurisdiction (2 July 2013) (CLA-144)|
|Phoenix v. Czech Republic||Phoenix Action v. Czech Republic, ICSID Case No. ARB/06/05, Award (15 April 2009) (RLA-22)|
|PSEG Global v. Turkey||PSEG Global Inc. and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, ICSID Case No. ARB/02/5, Award (19 January 2007) (CLA-40)|
|Quiborax Award||Quiborax S.A. and Non Metallic Minerals S.A. v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, Award (16 September 2015) (RLA-157)|
|Quiborax v. Bolivia||Quiborax S.A., Non Metallic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, Decision on Jurisdiction (27 September 2012) (RLA-33)|
|Ripinsky - Damages||Sergey Ripinsky and Kevin Williams, Damages in International Investment Law (2008) (CLA-53) (CLA-134)|
|Romak v. Uzbekistan||Romak S.A. v. Republic of Uzbekistan, PCA Case No. AA 280, Award (26 November 2009) (RLA-24)|
|Rosinvest v. Russia||RosInvestCo UK Ltd. v. Russian Federation, SCC Arbitration V (079/2005), Final Award (12 September 2010) (CLA-9)|
|Saba Fakes v. Turkey||Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award (14 July 2010) (RLA-26)|
|Salini v. Morocco||Salini Costruttori S.P.A. and Italstrade S.P.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction (16 July 2001) (RLA-7)|
|Saluka v. Czech Republic||Saluka Investments BV (The Netherlands) v. Czech Republic, UNCITRAL, Partial Award (17 March 2006) (CLA-19)|
|Santa Elena v. Costa Rica||Compañía del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica, ICSID Case No. ARB/96/1, Award (17 February 2000) (CLA-136)|
|SD Myers v. Canada||S.D. Myers, Inc. v. Canada, UNCITRAL, Partial Award (13 November 2000) (RLA-52)|
|SGS v. Paraguay||SGS Société Générale de Surveillance S.A. v. Republic of Paraguay, ICSID Case No. ARB/07/29, Decision on Jurisdiction (10 February 2010) (RLA-25)|
|Siemens v. Argentina||Siemens A.G. v. Argentine Republic, ICSID Case No. ARB/02/8, Award (6 February 2007) (CLA-15)|
|Sistem v. Kyrgyz||Sistem Muhendislik Insaat Sanayi ve Ticaret A.S. v. Kyrgyz Republic, ICSID Case No. ARB(AF)/06/1, Award (9 September 2009)|
|Southern Pacific v. Egypt||Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, ICSID Case No. ARB/84/3, Award (20 May 1992) (CLA-12)|
|Standard Chartered v. Tanzania||Standard Chartered Bank v. The United Republic of Tanzania, ICSID Case No. ARB/10/12, Award (2 November 2012) (RLA-109)|
|Técnicas v. Mexico||Técnicas Medioambientales Tecmed S.A. v. United Mexican States, ICSID Case No. ARB(AF)/00/2, Award (29 May 2003) (CLA-28)|
|The Experience of ICSID||Ibrahim Shihata & Antonio Parra, The Experience of the International Centre for Settlement of Investment Disputes, 14 ICSID Rev.-F.I.LJ. 299 (1999) (RLA-4)|
|The First 50 Years of ICSID||The First 50 Years of ICSID, Zachary Douglas, "Property Rights as the Object of an Expropriation" (2016)|
|The Norwegian Shipowners’ Case||The Norwegian Shipowners’ Case (Norway v. USA), RIAA (13 October 1922)|
|Thunderbird v. Mexico||International Thunderbird Gaming Corp. v. United Mexican States, UNCITRAL (NAFTA), Award (26 January 2006) (CLA-31)|
|Treaty||Agreement between the Swiss Confederation and the Republic of Venezuela on the Reciprocal Promotion and Protection of Investments (18 November 1993) (CLA-1)|
|Ulysseas v. Ecuador||Ulysseas, Inc. v. The Republic of Ecuador, UNCITRAL, Final Award (12 June 2012) (RLA-108)|
|Venezuela Holdings v. Venezuela||Venezuela Holdings, B.V. and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Award (9 October 2014) (RLA-153)|
|Vivendi v. Argentina||Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/97/3, Award (21 November 2000)|
|Waste Management v. Mexico||Waste Management, Inc. v. United Mexican States, ICSID Case No. ARB(AF)/00/3, Award (30 April 2004) (CLA-34)|
"[A]t the heart of the Respondent’s argument is its discontent with a provisional ruling taken by the Tribunal in order to decide on a procedural question. The mechanism set forth under Article 57 of the ICSID Convention and Arbitration Rule 9 seeking to safeguard the integrity of the proceeding is not a mechanism for reconsideration of adverse rulings. Absent any objective circumstances, the mere existence of an adverse ruling in and of itself, is insufficient to prove a manifest lack of impartiality or independence, as required by Articles 14 and 57 of the ICSID Convention."2
■ Brent W. Gwaltney, statements dated 30 May 2012, 20 August 2013 and 23 May 2014;
■ Jim Sorlie, statements dated 29 May 2012, 26 July 2013 and 28 May 2014; and
■ Melquiades A. Parra, statements dated 29 May 2012 and 12 August 2013.
■ Anibal Villarroel, statements dated 28 February 2013 and 30 December 2013;
■ Carolina Nuñez, statements dated 28 February 2013 and 30 December 2013;
■ Edgar Flórez, statements dated 28 February 2013 and 30 December 2013;
■ Victor Barrientos, statements dated 28 February 2013 and 30 December 2013, and
■ Francisco Toro, statement dated 30 December 2013 (later withdrawn by the Respondent, as explained below).
■ Victor Barrientos, Day 3 (11 September 2014), at 09:03:19ff
■ Edgar Flórez, Day 4 (12 September 2014), at 10:55:18ff
■ Brent Gwaltney, Day 2 (10 September 2014), at 09:17:20ff
■ Melquíades A. Parra, Day 2 (10 September 2014), at 11:08:13ff
■ Jim Sorlie, Day 2 (10 September 2014), at 12:48:22ff
■ Anibal Villarroel, Days 3 & 4 (11 and 12 September 2014), at 14:24:06ff and 09:00:12ff.
(6) Other Procedural Matters
"As regards the third application, given that this documentation is said by the Claimants to respond directly in rebuttal to the Respondent’s (delayed) Rejoinder of 3 March 2014, the Tribunal here orders its admission de bene esse for the purpose only of allowing the Tribunal to read the documentation in order to decide the Claimants’ application and the Respondent’s opposition (i.e. not as 'evidence'). The Tribunal also orders the Claimant’s third application (with the Respondent’s opposition) to be argued more fully during the Parties’ opening oral submissions at the outset of the first week’s hearing in Paris beginning on Monday, 31 March 2014. In the event (which should not here be assumed) that the Tribunal should then decide to admit into evidence any part of this documentation, the Parties should be ready for any consequential order, including any response from the Respondent as regards further submissions and rebuttal evidence."
"To require all pending procedural applications to be raised with the Tribunal during the Parties’ opening submissions on 31 March 2014, including [...]: (i) the submission of additional documents into the evidential record; (ii) the hearing schedule and the Claimants’ latest application for 15 minutes’ direct examination; (iii) the Respondent’s application for an adjournment of the hearing; and (iv) the admissibility of the witness statement of Mr Francisco Toro; and without the Tribunal prejudging any of these applications, the Parties shall prepare for the five-day hearing to the fullest extent, including all preparations on the provisional assumption that any or all of these applications may be refused by the Tribunal on 31 March 2014."
"a. To permit the Respondent to withdraw from the evidential record the proffered witness statement of Mr Toro dated 30 December 2013 (as a result of which it shall not be treated as evidence in these arbitration proceedings); and
b. To reserve its decision for the time being over any adverse inferences to be drawn from the withdrawal of the Toro Statement and the non-production by the Respondent of Mr Toro’s witness statement(s) in the Gambrinus arbitration under Procedural Order No.9."
"Respondent’s Advantis valuation report of FertiNitro: This document was referenced in the Claimant’s Reply [paragraph 105] and Mr Brent Gwaltney’s Second Witness Statement at paragraph 40 and is clearly relevant to the Respondent’s valuation of FertiNitro in this proceeding. In its Rejoinder [paragraph 228], the Respondent makes reference to the alleged good-faith negotiations, in the course of which it presented the document (on a non-without prejudice and confidential basis) to the Claimants. Given that it is already referenced in the Claimants’ submissions, was created for the Respondent and, therefore, is already in the Respondent’s possession, there can be no prejudicial effect in admitting the exhibit at this stage. Furthermore, such evidence of the Respondent’s previous valuations of FertiNitro should clearly be relevant to the Tribunal’s assessment of the Respondent’s purported valuation in this proceeding." (Footnote omitted)
(7) The Rule 12 Resumption of the Proceedings
a. Declaring that the Respondent has violated Articles 4, 6 and 11 of the Treaty;
b. Ordering that the Respondent pay to KOMSA compensation for the expropriation of its investment and historical losses in the amount of US$ 444.6 million (as at 30 January 2015, subject to adjustment as at the date of the Award);7
c. Ordering that the Respondent pay to KNI compensation for the expropriation of its investment in the amount in the amount of US$ 227.8 million (as at 30 January 2015; subject to adjustment as at the date of the Award);8
d. Declaring that the Respondent’s expropriation of the Claimants’ investments was unlawful;
e. Ordering such other damages or relief that the Tribunal deems appropriate for the unlawful character of the Respondent’s expropriation and other violations of the BIT;
f. Ordering that the Respondent pay interest on the amounts that the Tribunal awards to the Claimants (including costs and interest), at the LIBOR three-month US Dollar rate plus 2%, compounded on a quarterly basis, from the date of the award until full payment of the amount of the award by the Respondent;
g. Ordering that the Respondent pay the costs of the arbitration, including all the fees and expenses of ICSID and the Tribunal and all the legal costs and expenses incurred by the Claimants, apportioned between the Claimants in the ratio in which they are awarded compensation, with interest calculated in accordance with paragraph [f], directly above; and
h. Ordering such other and further relief as the Tribunal deems appropriate.
"(i) declaring that KNI’s interests in the Offtake Agreement do not constitute an investment within the meaning of Article 25 of the ICSID Convention and/or Article 1(2) of the Venezuela-Switzerland BIT and, thus, are not within the jurisdiction of the Arbitral Tribunal;
(ii) dismissing KNI’s claims in their entirety for lack of jurisdiction;
(iii) declaring that the Republic has not breached any of the standards of protection under the Venezuela-Switzerland BIT;
(iv) dismissing all of the Claimants’ claims;
(v) awarding the Republic all costs and fees incurred in this arbitration, including reasonable attorneys’ fees and expert fees;
(vi) granting the Republic any other relief the Arbitral Tribunal determines to be appropriate."
"Manufacturers, suppliers [...] exporters of nitrogenous fertilizers [...] are required to supply these on a priority basis to the national market, in accordance with the price regulations established for their sale." Article 3 provided that the prices would be established by joint resolutions of the Ministries of Agriculture and Land, Light Industries and Trade and Energy and Petroleum.
Issue 3 - Liability: The issues of liability arise under Articles 4(1), 4(2), 6 and 11(2) of the Treaty, as cited in Part IV of this Award. Liability for expropriation under Article 6 of the Treaty, as regards KOMSA and KNI respectively, is addressed in Part VII of this Award below. Liability under Articles 4(1), 4(2) and 11(2) of the Treaty, as regards KOMSA, is addressed in Part VIII of this Award below.
Issue 6 - Costs: The issue of legal and arbitration costs arises under Article 61(2) of the ICSID Convention and Rule 47(1)(j) of ICSID Arbitration Rules. Costs are also addressed in Part XI of this Award below.
A. The Offtake Agreement was an integral part of the FertiNitro Project;
B. KNI’s rights under the Offtake Agreement qualify as an "investment" under both the ICSID Convention and the Treaty (and satisfy the non-jurisdictional indicia), because:
(i) The Offtake Agreement is an "investment" under the ICSID Convention;
(ii) The Offtake Agreement is an "investment" under the Treaty; and
(iii) In any event the Offtake Agreement also satisfies the non-jurisdictional indicia.
A. The essential facts remain entirely unchallenged on the evidential record in this arbitration, as listed under B, C and D below.
B. The Respondent’s "Apertura" policy, with its other assurances, precipitated the Claimants’ investment in Venezuela.
C. Starting in 2005, the Respondent progressively interfered with the Claimants’ investments.
D. On 10/11 October 2010, without any formal notice, the Respondent openly and unambiguously expropriated both KOMSA’s equity in FertiNitro and KNI’s rights under the Offtake Agreement.
E. The First (September) Hearing showed that the Respondent’s claim (that it never expropriated the Offtake Agreement) is a study in contradiction, because
(i) If the Respondent did not expropriate the Offtake Agreement, as it claims, then it could not have had a legitimate purpose for the expropriation of FertiNitro;
(ii) The Respondent always planned to take KNI’s offtake; and
(iii) The Urea Decree and the Urea Resolution already guaranteed the Respondent access to FertiNitro’s product at significantly below production cost.
F. The First (September) hearing confirmed that Pequiven was, at all relevant times, an agent of the Respondent.
A. Expropriation: The Respondent breached Article 6 of the Treaty by unlawfully expropriating KOMSA’s equity in FertiNitro and KNI’s rights under the Offtake Agreement:
(i) The Respondent’s expropriation of the Claimants’ investments was not carried out in the public interest;
(ii) The Respondent’s expropriation of the Claimants’ investments was carried out in a discriminatory manner;
(iii) The Respondent’s expropriation of the Claimants’ investments was not carried out under due process of law; and
(iv) To date, the Respondent has failed to compensate the Claimants for its direct expropriation of the Claimants’ investments.
B. FET: The Respondent breached its duty under Article 4(1) of the Treaty to accord fair and equitable treatment to the Claimants’ investments.
C. FPS: The Respondent breached its duty under Article 4(1) of the Treaty to accord full protection and security to the Claimants’ investments.
D. Impairment: The Respondent breached Article 4(1) of the Treaty by putting in place arbitrary and discriminatory measures that impaired the Claimants’ management, operation, use and enjoyment of its investments.
E. National Treatment: The Respondent breached its duty under Article 4(2) of the Treaty to accord national treatment to the Claimants’ investments.
F. Umbrella Clause: The Respondent breached its obligations assumed under Article 11(2) of the Treaty regarding the treatment of the Claimants’ investments.
A. The Claimants have demonstrated that the Respondent must pay full compensation under international law:
(i) Recent jurisprudence confirms that the Respondent must pay full compensation to the Claimants in a "but for" scenario for the illegal expropriation of their investments;
(ii) KOMSA is also entitled to full compensation under international law for the losses caused by the Respondent’s 'other (non-expropriation) violations’ of the Treaty; and
(iii) KOMSA is entitled to compensation for its 'Historical Losses'.
B. Testimony from the First (September) Hearing demonstrated that the Parties’ quantum experts have adopted fundamentally different approaches to the valuation exercise:
(i) Mr Giles’s valuation (for the Claimants) is supported by contemporaneous documentary evidence and the testimony of the only independent fertiliser industry expert in this arbitration (Mr Sanders); and
(ii) Dr Flores’s valuation (for the Respondent) is a coalescence of (i) a series of assertions that are either outside the evidential record or are beyond his expertise; and (ii) a mechanical averaging of data and sources without any appreciation of the contemporaneous and industry evidence.
C. Whilst the Parties’ quantum experts agree on a number of compensation parameters, their outstanding differences of fact and expertise on quantum issues remain significant.
A. The Treaty confirms that compound interest is payable;
B. The last five years of ICSID jurisprudence (on the record of these proceedings) confirms that compound interest is payable; and
C. Leading commentaries confirm that compound interest is payable.
A. The Offtake Agreement is a sales contract that does not constitute an "investment" within the meaning of the Treaty or Article 25 of the ICSID Convention:
(i) Sales Contracts are not investments under international law; and
(ii) Complexity, length, project finance implications or the general unity of investment concept do not transform the Offtake Agreement into an investment.
B. KNI has neither made a contribution nor incurred the type of risk necessary to qualify as an investment under the Treaty or under Article 25 of the ICSID Convention, because:
(i) The Term "investment" has an objective and inherent meaning under both the Treaty and the ICSID Convention, which requires the assumption of an investment risk and the making of a contribution; and
(ii) KNI has not incurred an investment risk in connection with the Offtake Agreement.
C. The Offtake Agreement does not have a territoriality nexus with the Republic of Venezuela to qualify for protection under the Treaty.
A. The Offtake Agreement granted KNI a right to purchase FertiNitro’s product;
B. Decree 7713 did not order the mandatory acquisition of KNI’s rights under the Offtake Agreement or of the Offtake Agreement itself;
C. KNI continued to purchase offtake under the Offtake Agreement until February 2012;
D. FertiNitro terminated the Offtake Agreement in February 2012 for commercial reasons; and
E. FertiNitro’s decision to terminate the Offtake Agreement is not attributable to the Respondent.
A. The Respondent’s acquisition of FertiNitro’s assets was in the public interest:
(i) The Respondent should be afforded ample deference regarding its public interest policies; and
(ii) The mandatory acquisition of FertiNitro’s assets was carried out pursuant to the public policy of food security.
B. The mandatory acquisition of FertiNitro’s assets was carried out in a non-discriminatory manner, because:
(i) Pequiven/IPSL and KOMSA/KNI were not similarly situated;
(ii) KOMSA did not receive differential treatment; and
(iii) Any differential treatment was not improper because it was based on a reasonable justification.
C. The Respondent’s actions were carried out under the process of law, because:
(i) "Advance Notice" is not a requirement of due process under the Treaty or international law; and
(ii) The Respondent repeatedly provided notice to KOMSA that it planned to take control of FertiNitro.
D. The Respondent met (and continues to meet) its payment obligation under Article 6 of the Treaty, because:
(i) Article 6 of the Treaty requires the Respondent to make a reasonable offer of compensation - not immediate payment;
(ii) The Respondent made a reasonable offer of compensation, which KOMSA rejected; and
(iii) The Respondent will compensate KOMSA through the Mandatory Acquisition Procedure.
A. The applicable standard is tied to the minimum standard of customary international law;
B. The Claimants have failed to substantiate their claims, because:
(i) The Claimants have failed to establish that they had any legitimate expectations in relation to the Respondent’s tax regime;
(ii) The Respondent has provided FertiNitro with VAT Credits in line with the Respondent’s obligations;
(iii) The Respondent did not interfere in the management and operations of FertiNitro;
(iv) The Respondent did not frustrate any legitimate expectation by issuing the Urea Decree and Urea Resolution; and
(v) The Respondent provided a stable and predictable legal and business environment, treated the Claimants with transparency and procedural fairness and did not abuse its authority.
A. The Claimants have misapplied the applicable standard; and
B. The Claimants have also provided a misleading account of the Respondent’s actions that are alleged to have breached Article 4(1) of the Treaty.
A. The compensation claimed by KOMSA and KNI is vastly overstated:
(i) The relevant standard of compensation is found in the Treaty, not in customary international law;
(ii) Irrespective of the legal standard for compensation, the Parties agree that the expert witnesses on compensation should apply the Fair Market Value (FMV) standard; and
(iii) The Claimants ultimately fail to apply the FMV standard.
B. The Fair Market Value (FMV) of KOMSA’s economic interest in FertiNitro was no more than US$ 34.6 million:
(i) While Dr Flores’ DCF valuation is reasonable, Mr Giles’ DCF analysis is overstated and does not reflect FertiNitro’s FMV because:
a. The Claimants’ DCF analysis is inconsistent and highly speculative;
b. The Claimants’ DCF valuation inappropriately excludes actual production volumes from 2009 and 2010 in projecting future production:
(1) The Claimants inappropriately project a three-year turnaround cycle for FertiNitro;
(2) The number of gas and electricity disruptions and unplanned shutdowns in 2009 and 2010 was not materially higher than in recent prior years;
(3) The Claimants’ position that a hypothetical buyer would believe FertiNitro could consistently achieve nameplate production levels is unfounded;
(4) The Claimants’ position that the exclusion of the 2009-2010 period is justified by law is entirely baseless;
c. The Claimants’ projections of FertiNitro’s future costs are understated:
(1) The Claimants unreasonably relied upon budgeted instead of actual turnaround and maintenance costs;
(2) The Claimants’ other cost estimates are also understated.
d. The Claimants’ proposed discount rate is understated:
(1) The Claimants’ reliance upon out-dated global market risk premium data is unreasonable and inappropriate;
(2) The Claimants inappropriately relied upon limited survey data to determine their base country risk rate;
(3) The Claimants inappropriately excluded political risk from their country risk rate;
(4) The Claimants’ calculation of a 0.40 lambda for FertiNitro is entirely arbitrary and unreasonable;
(5) The Claimants’ application of a 1% liquidity discount is contrary to basic valuation principles; and
(6) The unreasonableness of the Claimants’ discount rate is confirmed by the two ExxonMobil awards and the Flughafen Zürich award.
(ii) The Claimants’ "Reasonableness Checks" do not support their valuation of KOMSA’s 25% Share in FertiNitro:
a. The October 2008 MOU Price, if properly adjusted, confirms Dr Flores’ valuation;
b. Construction costs of other plants are irrelevant;
c. The Advantis Reports confirm Dr Flores’ valuation;
d. The Claimants’ 'new argument' based on FertiNitro’s book value is irrelevant.
C. The Claimants’ valuation of the Offtake Agreement is overstated, because:
(i) The Claimants make the same inappropriate assumptions regarding sales volumes and discount rate as in their valuation of KOMSA’s equity interest in FertiNitro.
(ii) The Claimants’ valuation period improperly includes a 16-month period during which KNI suffered no losses.
(iii) The Claimants use the wrong valuation methodology based on unrealistic factual assumptions, because:
a. The Claimants inappropriately calculate KNI’s lost profits rather than the value of KNI’s alleged rights under the Offtake Agreement;
b. The Claimants fail to prove that they would have been unable to replace the FertiNitro Offtake through purchase on the open market;
c. The Claimants’ lost profits calculations are flawed and highly speculative.
D. The Claimants’ alleged "Historical Losses" are unfounded.
3.50.1. What steps, if any, did either of the Claimants take to oppose the Urea Decree?
3.50.2. What has happened with actual and projected natural gas price, since the last submissions by the Parties on this subject?
3.50.3 Why should the "expected rate of return" on equities rather than the "required rate of return" be used for the determination of the market risk premium?
3.50.4. Taking into account the fact that sales of product to KNI, after an interruption between October 2010 and January 2011, started again in January 2011 until the termination of the Offtake Agreement in February 2012, how much money, if any, did KNI lose compared to the continuing operation of that Offtake Agreement?
3.50.5. Would the Parties elaborate on their respective views concerning the relevance to this case (if any) of the discount rates used in the two ExxonMobil awards and in the Flughafen and Gold Reserve awards and the Advantis Report of May 2011, referred to by the Parties in their respective submissions?
3.50.6. What is the relevance, if any, of the Booz Allen valuation of FertiNitro made in 2007?
* The Tribunal’s Additional Topics of 2 June 2016 for the Parties
Projection of Future Cash Flows
"This Committee is of the view that an arbitral tribunal is not limited to referring to or relying upon only the authorities cited by the parties. It can, sua sponte, rely on other publicly available authorities, even if they have not been cited by the parties, provided that the issue has been raised before the tribunal and the parties were provided an opportunity to address it. Once such an opportunity was provided the Tribunal was not obliged to confine itself to only those authorities, which had been cited by the parties. No rule of law or procedure or requirement of due process prevented it from referring to or relying upon other authorities that were in the public domain. Such reliance did not violate any rule of natural justice including the right to be heard."
"The Term "investor" refers with regard to either Contracting Party to:
a) natural persons who, according to the law of that Contracting Party, are considered to be its nationals;
b) legal entities, including companies, corporations, business associations and other organizations which are constituted or otherwise duly organised under the law of that Contracting Party;
c) legal entities not established under the law of that Contracting Party but effectively controlled by natural persons as defined in (a) above or by legal entities as defined in (b) above."
"The term 'investment' comprises every kind of asset and more particularly, though not exclusively:
a) movable and immovable property as well as any other rights in rem;
b) shares, parts or any other kinds of participation in a company;
c) claims to money or to any performance under a contract;
d) intellectual property rights, technical processes, know-how and goodwill;
e) concessions and other rights granted under public law."
"The present Agreement shall apply to investments in the territory of one Contracting Party made in accordance with its laws and regulations by investors of the other Contracting Party, whether prior to or after the entry into force of the Agreement. It shall, however, not be applicable to divergencies or disputes the causes of which have arisen prior to its entry into force."
"Each Contracting Party shall provide, in accordance with the rules and principles of International Law, investments in its territory of investors of the other Contracting Party fair and equitable treatment and full protection and security; neither of them shall impair by arbitrary or discriminatory measures the management, operation, maintenance, use, enjoyment, expansion, disposal or liquidation of such investments."
"The treatment accorded by each Contracting Party to the investment by investors of the other Contracting Party in its territory, or to the investors themselves as regards their investments, shall not be less favourable than that accorded to investments of their own investors or those of any third State, or to the investors concerned as regards their investments."
"Neither of the Contracting Parties shall take, either directly or indirectly, measures of expropriation, nationalization or any other measures having the same nature or the same effect against investments of investors of the other Contracting Party, unless the measures are taken in the public interest, on a non-discriminatory basis, and under due process of law, and provided that provisions be made for effective and adequate compensation. Such compensation shall amount to the market value of the investment expropriated immediately before the expropriatory action was taken or became public knowledge, whichever is earlier, shall include interest from the date of expropriation, be paid without delay in a freely convertible currency to the person entitled thereto and be freely transferable."
"(1) With a view to an amicable solution of disputes between a Contracting Party and an investor of the other Contracting Party consultations will take place between the parties concerned.
(2) If these consultations do not result in a solution within six months from the date of the request for consultations, the investor may submit the dispute to the arbitration of the International Center for Settlement of Investment Disputes (I.C.S.I.D.) instituted by the Convention on the settlement of investment disputes between States and nationals of other States, opened for signature at Washington, on 18th March, 1965.
(3) As an alternative to I.C.S.I.D. arbitration the parties to the dispute may, by mutual consent, have recourse to an ad hoc arbitral tribunal which unless otherwise agreed upon by the parties to the dispute shall be established under the arbitration rules of the United Nations Commission on International Trade Law (U.N.C.I.T.R.A.L.). Such arbitration shall in any case take place if for whatever reason I.C.S.I.D. arbitration is not available.
(4) The arbitral award shall limit itself to determine whether the Contracting Party concerned has failed to comply with an obligation under this Agreement, whether such failure has resulted in damages to the investor, and, if this is the case, the amount to be paid by the Contracting Party to the investor as compensation for such damages.
(5) Each Contracting Party hereby consents to the submission of an investment dispute to international arbitration in accordance with the provisions of this article.
(6) The Contracting Party which is a party to the dispute shall not at any time during the procedures, assert as a defence its immunity or the fact that the investor has received compensation under an insurance contract covering the whole or part of the incurred damage or loss.
(7) The arbitral award shall be final and binding for the parties involved in the dispute."
"Allocation of Products. Subject to the provisions of Sections 11.4 and 11.5, the Parties agree that the allocation of Products to each Buyer hereunder is expected to be fifty percent (50%) of the actual total Plants [sic] Output, with the following provisions to apply to the allocation of Products assuming full production in a given Contract Year:
(a) Koch shall have the exclusive right and obligation to purchase from Seller for resale or its own consumption (i) seventy five percent (75%) of the Plants [sic] Output of ammonia available for sale during each Contract Year (estimated to be approximately 270,000 tons annually assuming full production at Nameplate Capacity) and (ii) forty-four percent (44%) of the Plants [sic] Output of urea for sale during each Contract Year (estimated to be approximately 640,000 annually tons assuming full production at Nameplate Capacity) and
(b) Pequiven Offtaker shall have the exclusive right and obligation to purchase from Seller for resale or its own consumption (i) twenty-five percent (25%) of the Plants [sic] Output of ammonia available for sale during each Contract Year (estimated to be approximately 90,000 tons annually assuming production at Nameplate Capacity) and (ii) fifty-six percent (56%) of the Plants [sic] Output of urea for sale during each Contract Year (estimated to be approximately 820,000 tons annually assuming production at Nameplate Capacity)."
"Assignment of Markets. Each Buyer agrees that the following territorial restrictions shall apply throughout the Primary Term with respect to the marketing and sale of Products:
(a) Koch shall have the exclusive right to market and sell Products for delivery to and ultimate consumption in North America.
(b) Pequiven Offtaker shall have the exclusive right to market and sell Products for delivery to and ultimate consumption in South America, Central America, and the Caribbean.
(c) Each Buyer further agrees not to sell Products such Buyer knows or has reason to believe ultimately will be resold in essentially their original form into any of the countries reserved to the other Buyer under paragraph (a) or (b) above, respectively.
(d) Notwithstanding any provision in this Section 2.3 to the contrary, at Koch’s sole option, Koch may request that Pequiven Offtaker market, on Koch’s behalf, all or a portion of Koch’s allocated Products taken hereunder in South America, Central America and/or the Caribbean. Likewise, at Pequiven Offtaker’s sole option, Pequiven Offtaker may request that Koch market on Pequiven Offtaker’s behalf all or a portion of Pequiven Offtaker’s allocated Products taken hereunder in North America. Each Buyer may elect to accept or reject the other Buyer’s request under this Section 2.3(d) in its sole discretion. If a Buyer ("Passive Agent") accepts the other Buyer’s ("Active Principal") request under this Section 2.3(d), the Buyers shall share equally the difference (whether positive or negative) between: (i) the price obtained by the Passive Agent, on a best efforts basis, from a Third Party (net of all expenses, fees and charges reasonably incurred by the Passive Agent in marketing, selling and/or transporting the Active Principal’s Products) and (ii) the applicable FOB Jose Price stated in Section 3.1 below.
(e) Notwithstanding any provision in this Section 2.3 to the contrary, at Koch’s sole option, it may make a request to market in North America, on Pequiven Offtaker’s behalf, all or a portion of Pequiven Offtaker’s allocated Products taken hereunder. Likewise, at Pequiven Offtaker’s sole option, it may make request to market in South America, Central America and/or the Caribbean, on Koch’s behalf, all or a portion of Koch’s allocated Products taken hereunder. Each Buyer may elect to accept or reject the other party’s request under this Section 2.3(e) in its sole discretion. If a Buyer ("Passive Principal") accepts the other Buyer’s ("Active Agent") request, the Buyers shall share equally the difference (whether positive or negative) between: (i) the price obtained by the Active Agent, on a best efforts basis, from a Third Party (net of all expenses, fees and charges reasonably incurred by the Active Agent in marketing, selling and/or transporting the other Passive Principal’s Products) and (ii) the applicable FOB Jose Price stated in Section 3.l below."
"Purchase price. The purchase price of Products to be sold in North America, Central America, South America and the Caribbean shall be calculated in accordance with the formulae set forth in Sections 3.1(a) and (b). The purchase price of Products to be sold for delivery in other markets ("Alternative Markets") shall be determined in accordance with the provisions of Sections 3.1(d) and (e): [...]"
"3.2. Failure to Take Delivery of Products. The provisions of subsections (a) and (b), below, shall apply during the time any loans are outstanding under the Loan Agreements. Upon the repayment in full of the loans made to Seller under the Loan Agreements, the provisions of subsection (c), below, shall apply.
(a) Take-or Pay if Tender Obligation Met. If Seller is prepared and able to meet its obligation to tender Product to a Buyer and such Buyer fails to take delivery of its allocation of Products in accordance with Articles II, V or VI ("Non-Taking Buyer") within thirty (30) days after the scheduled delivery date therefor, such Non-Taking Buyer shall nevertheless pay Seller (i) the corresponding price, determined in accordance with the applicable formula in Section 3.1(a) or Section 3.1(b) (without reduction for the relevant marketing fee discount), for all such Products tendered by Seller but not taken by such Non-Taking Buyer and (ii) all costs and expenses of Seller in the event that the Non-Taking Buyer’s failure to take the Products contributes to a reduction of Plant production. Notwithstanding the foregoing, no Buyer shall be required to pay for (y) quantities of Products not tendered or not taken by reason of a Force Majeure Event and (z) quantities of Products not tendered by reason of non-performance by Seller in accordance with the terms of this Agreement except to the extent such non-performance was attributable to the Non-Taking Buyer.
(b) Products Not Taken. Seller shall promptly give notice of any Non-Taking Buyer’s failure to take any Product to the other Buyer so long as such other Buyer is taking delivery of its allocation of Products in accordance with Articles II, V or VI ("Taking Buyer"). The Taking Buyer shall have a right of first refusal to purchase any Product not taken by the Non-Taking Buyer, for resale or [sic] its own consumption, at the corresponding Product price determined pursuant to Section 3.1. (a) or (b), as the case may be, and upon acceptance, the obligations to purchase and take delivery of such Product shall be binding upon the Taking Buyer. If the Taking Buyer declines or fails to exercise such right of first refusal by giving notice thereof to Seller within five (5) days after the Taking Buyer’s receipt of the notice from Seller, Seller shall have the right to sell such Product to a Third Party at any price. Notwithstanding the sale of the corresponding Products pursuant to this Section 3.2(b), the Non-Taking Buyer shall pay the Seller the amounts set forth in Section 3.2(a) (without reduction for the Ammonia Marketing Fee Discount or the Urea Marketing Fee Discount, as appropriate), together with any sales costs that Seller incurred to sell the Product. Seller shall provide a credit to a Non-Taking Buyer for amounts received by Seller from the Taking Buyer or a Third Party under this Section 3.2(b) if the Non-Taking Buyer has paid the amounts due to Seller pursuant to Section 3.2(a) (together with any sales costs that Seller incurred to sell the Product), such credit to be applied by Seller against future invoices issued by the Seller to the relevant Buyer.
(c) Modification of Certain Provisions Upon Repayment of Loans. Notwithstanding any provision contained herein to the contrary, upon the repayment in full of the loans made by the lenders to Seller under the Loan Agreements, including any refinancing thereof, each Buyer’s obligation to take-or-pay for Product if tendered under Section 3.2(a) above shall terminate, and the modifications to this Agreement set forth in Exhibit B shall be effective for all purposes hereunder as of such date.
3.3. Income Taxes. Except as specifically provided in Section 3.1(f), each Buyer shall indemnify Seller against and hold it harmless from any and all taxes assessed or claimed against such Buyer based on or measured against such Buyer’s income (including penalties, interest and expenses) imposed by any jurisdiction or political subdivision thereof or therein (other than the Republic of Venezuela or any Venezuelan state or local governmental or taxing authority therein) arising out of or relating to the sale of Products hereunder or the performance by Buyer of its obligation hereunder, whether or not such taxes were correctly or legally assessed."
"Term of Agreement - Subject to the terms and conditions herein, this Agreement shall be effective as of the date first written above and shall run for a primary term of twenty (20) Contract Years thereafter ("Primary Term"); provided, however, in the event that the Bonds have not been fully paid or redeemed and remain outstanding under their original repayment schedule upon the conclusion of the Primary Term, neither of the Buyers not the Seller shall cancel this Agreement and the Primary Term shall be extended for such period of time as the Bonds remain outstanding under their original repayment schedule. This Agreement shall be automatically renewed following the Primary Term for one or more successive terms of five (5) Contract Years (each a "Secondary Term") unless one of the Parties gives written notice to the contrary to the other Parties at least six (6) months prior to the end of the Primary Term or the then current Secondary Term, as appropriate. If this Agreement is renewed for one or more Secondary Terms, the Parties shall consult with each other at least three (3) months prior to the commencement of any such Secondary Term to determine whether, under the circumstances then prevailing, the provisions of Section 2.3 shall apply."
"(a) Arbitration Pursuant to ICC Rules. If the Dispute has not been resolved through negotiation within ninety (90) days after the date of the notice of Dispute received pursuant to Section 12.1, the Dispute shall be finally settled and resolved by arbitration in accordance with the ICC Rules, subject to such modifications of the ICC Rules as are set forth in this Article XII."
"(c) Venue and Language. The arbitration proceeding shall be conducted in the City of Miami, Florida, United States of America, or any other location upon which the parties to the arbitration proceeding may agree, in the English language [...] "
"(f) Applicable Law. The arbitrators shall be required to apply New York substantive law in ruling upon any Dispute in accordance with the Parties’ intent as expressed in Section 13.1."
"Manufacturers, suppliers, merchants, distributors, importers and exporters of nitrogenous fertilizers and the supplies necessary for their manufacture are required to supply these on a priority basis to the national market, in accordance with the price regulations established for their sale."
"The activity for marketing nitrogenous fertilizers and the supplies necessary for their manufacture, conducted by individuals and legal entities, shall be subject to the prices, volumes, controls, regulations and audits established by joint Resolutions by the Ministry of Agriculture and Land, the Ministry of Light Industries and Trade and the Ministry of Energy and Petroleum, which are to be issued within thirty days after the publication of this Decree."
"The purpose of this Resolution is to regulate control and inspect the production commercialization, distribution and sales of urea, to guarantee the supply of the national market. Furthermore, it regulates its exports once the internal demand has been satisfied."
"The State Company, Petroquimica de Venezuela S.A. (Pequiven S.A.) may purchase the urea it requires to cover the needs of the Nation, from any manufacturer established in the country, at the maximum bulk sales price at the plant gate of Bs. 155,200/MT (Bolivars per Metric Ton)."
"All of the goods necessary to carry out the activities of production, manufacture, importing, gathering, transportation, distribution and sale of foods or products declared to be of first need or subject to price controls are hereby declared to be of, and are therefore subject to, public utility and social interest.
The National Executive shall, without other prior formality, initiate expropriation through decree for reasons of food security and sovereignty "
"The mandatory acquisition of movable and real estate assets is ordered, including improvements, installations, facilities, industrial equipment, office and other assets, required or necessary for the production, processing, transportation and warehousing activities of fertilizers (urea and ammoniac) that are owned by, or in the possession of, the business companies Fertilizantes Nitrogenados de Oriente, S.A., Fertilizantes Nitrogenados de Venezuela, S.R.L., Fertilizantes Nitrogenados de Oriente, C.E.C. y Fertilizantes Nitrogenados de Venezuela, C.E.C., or any other company or persons related, with the objective of achieving the absolute and effective realization of the national plans of sowing and production formulated by the National Executive, and that are necessary for the execution of the 'Socialist Plan for AgriFood Sovereignty'"
"The project "Socialist Plan for Agri-Food Sovereignty" will be executed by Petroquímica de Venezuela, S.A. (PEQUIVEN), assigned to the People’s Power Ministry for Energy and Petroleum, as the expropriation entity, or the subsidiary that the entity appoints."
"The expropriated goods will be transferred free of encumbrances or limitations to the Venezuelan State by means of the company Petroquímica de Venezuela, S.A. (PEQUIVEN), as the expropriation entity, or the subsidiary that this entity appoints, in accordance to what is stipulated in article 11 of the Expropriation Law for Public or Social Benefit."
"In compliance to what is stipulated in article 12 of the Expropriation Law for Public or Social Benefit, the company Petroquímica de Venezuela, S.A. (PEQUIVEN) is hereby authorized to carry out the necessary steps for the acquisition of real estate and other assets as stipulated in article 1 of the present Law, subrogating its position in all rights and obligations that correspond to the Bolivarian Republic of Venezuela on such matters."
"Petroquímica de Venezuela, S.A. (PEQUIVEN) will initiate and carry out the expropriation process as stipulated in the Expropriation Law for Public or Social Benefit until total and definite transfer of the ownership of the properties indicated in article 1 of the present Law takes place."
"In compliance with stipulations of article 3 of the Decree with Rank, Value and Force of the Organic Law for Security and Agri-food Sovereignty, the occupancy of the assets indicated in article 1 of the present Law by the company Petroquímica de Venezuela, S.A. (PEQUIVEN) is ordered with the objective of placing these into operation, administration and capitalization."
"Concept of expropriation. Expropriation is an institution of Public Law by which the State acts in furtherance of a purpose having public utility or societal interest, in order to obtain the compulsory transfer unto itself of the right to property or some other private right, by final judgment and timely payment of fair compensation."
"Requirements for expropriation. The Compulsory expropriation of property of any nature may only take effect through compliance with the following requirements:
1. Formal finding declaring the public interest.
2. Declaration that carrying out such [interest] necessarily requires the total or partial transfer of the property or right.
3. Fair price for the property subject to expropriation.
4. Timely payment in cash of fair compensation."
"Rights of the holder. The holder has the right to become a party to the expropriation proceeding, in order to seek, from the price of the expropriated property, the portion applicable to him for the value of his improvements and for damages suffered by him."
"Procedure in the absence of compromise. In the event that a compromise is not reached, the judge shall call a hearing during the third business day thereafter, for the naming of a Valuation Commission, appointed in accordance with the provisions of Article 19 of this Law, which shall establish the fair price pursuant to the regulations of the Code of Civil Procedure."
"Elements requiring consideration. The fair price valuation of any property or right to be expropriated, in whole or in part, shall specifying its type, quality, location, approximate dimensions, its likely production and all other circumstances that bear upon the evaluations and calculations made to determine its fair value. In all cases, the valuation shall represent the equivalent value applicable to the expropriated property. Among the elements of the valuation, in the case of real property, [the following] are required to be considered:
1. The taxable value of the property, declared or tacitly accepted by the owner.
2. The value set forth in conveyance documents, executed at least six (6) months prior to the expropriation decree.
3. The average prices at which similar properties have been sold in the last twelve (12) months, counted as of the date the valuation was prepared.
In the event that any of these elements, which are required to be considered, are absent, the experts shall provide express reasons therefor in the valuation report. Under no circumstances shall the incremental value of real property be taken into account, attributable to its proximity to the work in progress."
"I hereby notify you that, in accordance with the Resolution issued by the Board of Temporary Ad-Hoc Trustees of Fertilizantes Nitrogenados de Venezuela, FertiNitro, C.E.C., ("FertiNitro"), as is evidenced by appointment effected by Decrees handed down by the Second Civil, Commercial, Agricultural, and Traffic Court of First Instance of the Judicial District of the State of Anzoátegui on August 8 and 9, 2011 and September 22, 2011, Case BP02-V-2011-000998, the first two of which have been recorded in the First Commercial Registry of the State of Anzoátegui on August 11, 2011, under No. 09, Volume 1; effective from the date of this communication, FertiNitro shall not sell any more nitrogen fertilizers (urea and ammonia) to Koch Oil, S.A. under the marketing agreement entered into between Petroquímica de Venezuela S.A., International Petrochemical Sales Limited, Koch Oil S.A., and Fertilizantes Nitrogenados de Venezuela, C.E.C. on April 8, 1998; all of which is in fulfilment of what is established in Decree 7,713 published in Official Gazette of the Bolivarian Republic of Venezuela No. 39,528 of October 11, 2010, which orders the compulsory acquisition of movable and immovable property, including improvements, facilities, plants, industrial and office equipment and all other assets necessary or required for the production, processing, transport, and storage of fertilizers (urea and ammonia) that belong to or are in the possession of the companies Fertilizantes Nitrogenados de Oriente, S.A., Fertilizantes Nitrogenados de Venezuela, S.R.L., Fertilizantes Nitrogenados de Oriente, C.E.C. and Fertilizantes Nitrogenados de Venezuela, C.E.C., or any other related companies or persons."
"(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.
(2) "National of another Contracting State" means:
(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date on which the request was registered pursuant to paragraph (3) of Article 28 or paragraph (3) of Article 36, but does not include any person who on either date also had the nationality of the Contracting State party to the dispute; and
(b) any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consented to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.
(3) Consent by a constituent subdivision or agency of a Contracting State shall require the approval of that State unless that State notifies the Centre that no such approval is required.
(4) Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary- General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1)."
"(1) The Tribunal shall be the judge of its own competence.
(2) Any objection by a party to the dispute that that dispute is not within the jurisdiction of the Centre, or for other reasons is not within the competence of the Tribunal, shall be considered by the Tribunal which shall determine whether to deal with it as a preliminary question or to join it to the merits of the dispute."
"The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable."
(2) Factual Chronology
"The Parties hereby agree that the aggregate purchase price to be paid by Pequiven for the Shares will consist of (a) USD$ 1,210,000,000.00, less the outstanding balance of principal and accrued interest on FertiNitro’s existing bank and bond financing as of the Closing Date, plus (b) the Excess Cash (the 'Purchase Price '). 'Excess Cash' would be defined as FertiNitro’s cash balance on the Closing Date, including all required reserve accounts, less USD$25,000,000."105(Emphasis in original)
"(a) The purchase price ("Purchase Price ") to be paid by Pequiven to Koch Shareholder for the Acquired Shares is US$297,500,000.00, which shall be payable in cash at the closing of the Proposed Transaction (the "Closing ").
(b) For reference purposes only and with the agreement by Pequiven and Koch Shareholder that the Purchase Price is a fixed amount and not subject to adjustment the Purchase Price was determined by taking a starting value for 100% of the Companies of US$1,200,000,000.00, and (i) subtracting the outstanding balance of principal and all accrued interest on the Companies’ existing bank and bond financing as of October 6, 2008, (ii) adding excess cash, exclusive of reserves, as of such date, and (iii) multiplying the resulting agreed net value of US$850,000,000.00 by the 35% total equity interests in the Companies owned directly or indirectly by Koch Shareholder and LAIF. "108 (Emphasis in original)
"The Expropriation Decree consists of a declaration that the execution of a project requires the compulsory acquisition of the totality of a property or various properties, or a portion thereof. [...] The Expropriation Decree shall require a prior finding of public utility, in accordance with the provisions of Articles 13 and 14 of this Law."
"All of the goods necessary to carry out the activities of production, manufacture, importing, gathering, transportation, distribution and sale of foods or products declared to be of first need or subject to price controls are hereby declared to be of, and are therefore subject to, public utility and societal interest.
The National Executive shall, without other prior formality, initiate expropriation through decree for reasons of food security and sovereignty. "137
"The basic and intermediate petrochemical activity is reserved for the State, as well as the works, assets and facilities required for its operation. This reserve will be exercised directly by the National Executive or through companies of its exclusive ownership. It can also be exercised by the State through Mixed Companies in which it has decision control and a participation of not less than fifty percent (50%) of the capital stock.
Mixed Companies will be subject to the prior authorization of the National Assembly, to which effect the National Executive, acting through the Ministry of the People’s Power competent for Energy and Oil Matters, will inform the National Assembly of the pertinent circumstances and conditions."
"Look, so as to accomplish the capable and effective carrying out of the national plans of seeding and production, formulated by the National Executive, and that are necessary for the execution of the work of the socialist agro-alimentary sovereignty plan... Approved, that it be expropriated and it pass to the property, to the nation’s property."141
". [Minister Rafael Ramirez unrecorded].mandate of our laws, of our government, of our revolution, because this is a fundamental plant for agricultural development of our country, our food sovereignty, this is a plant with which we have been meeting with for a long time, without any success whatsoever, to try to have them adapt to our needs in the national development plan. So that we may see the importance that this company [i.e. FertiNitro]147has in the national agricultural system... well, first is to announce that at a national level we produce 380,000 tons per year of fertilizers, and urea in particular. But this sole plant produces 1,500,000 tons per year of urea. This is a very large plant, the largest we have in the country.
 Ok now, this is a plant that, receiving gas produced by the Venezuelan State at as subsidized price, that is to say, between 0.5 and 1.5 dollars per MMBTU, one must consider that outside the country gas is now selling for between 3 and 12 dollars per MMBTU. Notwithstanding this subsidized price, it is impossible that this plant, in which Pequiven had a minority interest, would not adjust to the fertilizer supply requirements for national development.
 We currently have a consumption of 600,000 tons of urea, but we are in now in our development plans, the total seeding plan designed by the national government, to cover up to 5 million hectares. We are setting a requirement of more than 1.3 million tons. With the control of this plant that the Venezuelan state will be taking [i.e. the FertiNitro Plant], we now have guaranteed all of the urea that our farm workers may need, all of the urea that our producing sector may need, to sustain this extraordinary seeding plan and to sustain national development.
 On another topic, this plant, which had a group of private shareholders, we had serious problems with sales. Being a fertilizer produced with Venezuelan gas, well, we had a limit where we could only acquire up to 10% of its production for the domestic market. And, when they sold it to us, they sold it at a price that was 2.5 to 3 times in excess of the price at which Pequiven sells its fertilizers. [These appear to be references to the Offtake Agreement].
 Such that, we are here very satisfied, because we know that this step is a step closer toward our sovereignty. We are with the workers, who are the fundamental actors of this process and, of course, paying attention to the guidelines of Commandant Chavez, of President Chavez, in the deepening of our Bolivarian revolution."
 Well, here we have a plant of about 400 workers. Of course, the private parties were using an outsourcing model. We are going to eliminate the outsourcing and enter upon a process of worker action - regularize all of the relationships with our workers - because socialism is about an economic system where the base, the relationship, the production relationships have to be within the framework of the ethics of socialism. It can't be; we can't have workers here that are being exploited by trans-national companies while they are the ones making the profits outside the country. [These appear to be references (inter alia) to FertiNitro’s foreign shareholders, including KOMSA].
 So then, now a process is beginning, of course, a legal proceeding; all of the mechanisms are being initiated to complete the legal steps for expropriation. But we are here with our workers, workers from Pequiven, workers from FertiNitro, and workers from PDVSA, already in control of the plant and making inspections of the installations because, of course, we have to guarantee that all of the assets are preserved, which from here on out belong to the Republic.
 Newsperson: The benefits of the countries of ALBA, which FertiNitro will have also? Minister Rafael Ramirez: Well, look. First of all, with this we guarantee our supply to the internal market. And later, we will have the control of sales. Up to this moment, the trans-national that operated here was the one that managed the volumes quoted, in accordance with its own criteria, according to its commercial policy. We, as you all know, in the heart of ALBA in Latin America and in our own domestic market, we have a different view. We have available people and natural resources, such as natural gas, which is the one used in this case, to convert it into inputs for the manufacturing process. In this sense, this plant will allow us to ensure that our policy is carried out in the future. [These appear to be references (inter alia) to the Offtake Agreement].
 Newsperson: (Unintelligible). Minister Rafael Ramirez: Well, yes, we are first taking here. We are guaranteeing... take note that a plant stoppage has been started right now, at the beginning of their work. For that reason, there is a lot of movement... because we are always tending to the maintenance of our installations in optimum condition.
 Newsperson: What will be the impact of the nationalization of FertiNitro on the people? Minister Rafael Ramirez: Well, very positive, because it will now allow us to have available the volumes of fertilizers that we may need of urea at national prices. Note that Pequiven sells the 50 kilo sack of urea at 19 Bolivars, and here FertiNitro used to sell it to us at 50 Bolivars. That is to say, a difference of more than 2.5 times. Now we will have available the price that is regulated by the state, of 19.5, and we will be able to have available all of the urea that the domestic market may require. In that sense, between this operation and the nationalization of AgroIsleña, now AgroPatria, we are going to have the entire chain to be able to supply our farm working sector, over there in the Andes so that they may produce coffee, there in the plains so they may produce corn, so that they may produce sorghum. That is to say, all that we have seen is a fundamental element for us to be able to transcend the oil-producing model, and it is a fundamental model for guaranteeing the security and the feeding of our people. In the measure that we have the inputs for the entire chain controlled by the state, such that it guarantees that no speculation will take place with them, that is to say, with the fertilizers, the chemicals, the agro-chemicals, our people we be able to continue to have food available, there will be more work the fields and, our people, across the socialist distribution network, we will then be able to have secure food at low prices, in abundance for all of our country. [Again, these appear to be references (inter alia) to the Offtake Agreement].
 Newsperson: What steps for our national sovereignty? Minister Rafael Ramirez: That’s right, I also want to underscore and thank the unwavering support of workers, the support of our FUTEC, which is the confederation of our workers, Socialist Workers Vanguard, all of the peoples’ organizations, the worker organizations that from, just yesterday, when the president made the announcements, are here safeguarding these installations, here at FertiNitro, as well as concurrently, our workers are in the State of Carabobo, guaranteeing, safeguarding the installations of Industria Venoco, which has also been nationalized by the revolution. Both steps are very important, because it is a sector in which we have to guarantee sovereignty. In the case of Venoco, we are dealing with a sector fundamental for production of chemicals, lubricants, greases, needed by the electrical and the industrial sectors, where the same situation was being repeated. It being PDVSA, being the State, which supplies the raw materials; well, there is a sale policy that, in a clear way, was impeding the plans to make available the natural resources for service to the people.
 Newsperson: How many people? Minister Rafael Ramirez: In FertiNitro, 400 persons. In Venoco we have about 360 persons. Yes, FertiNitro, FertiNitro. In... national they have about 50 persons, that’s more or less the number, which is the largest concentration of persons.
 These are very important actions, because these companies, as you well know, were companies and businesses that were remnants of the prior republic. They were companies and businesses of trans-national and national capital that were taking advantage of the supply of raw materials, cheaply, of the Venezuelan state, and of PDVSA in this plant, in particular.
 And I want to salute all of the workers and their political organizations. I want to salute the workers of FUTEC. I want to salute the workers of the Socialist Workers’ Vanguard. I want to salute all of our workers who, as of just yesterday, came here to secure and guarantee the operations of, and the integrity of these assets that, today, belong to the Venezuelan state. We know that we can always count on the petroleum workers, we can always count on the petrochemical workers, we can count on the working class, we can count on the workers, the engineers, the technicians that make it all possible, that from day to day, we get our energy inputs. You all know that we have waged the battle for full petroleum sovereignty; that battle, that the Bolivarian government has advanced and consolidated. And today, with Chavez, we can say that we are sovereign in the management of our petroleum resources.
 Now we are on the offensive to deepen food sovereignty. Only a few days ago, Commandant Chavez announced the nationalization of the AgroIsleña company, today the AgroPatria company. It is a company that allows us to provide for our farm workers, for our people, the agricultural inputs produced in the country and that the private parties held as a speculative tool, bringing poverty to the fields. This is now under the control of the State.
 Yesterday, the nationalization of FertiNitro was announced. So that we can see the importance of this plant we, with our petrochemical industry - Pequiven - produce at a national level two hundred, three hundred eighty thousand tons/year of urea that, as you all know, is fundamental for food production. This sole plant- FertiNitro -produces, on its own, 1,500,000 tons/year of urea. That is to say, five times more than what is produced in all of the plants nation-wide.
 But what was the problem? That this plant being, this plant [i.e. the FertiNitro Plant] receives gas produced by Petróleos de Venezuela, gas belonging to all Venezuelans. We sell it to them at a subsidized price, between 0.5 and 1.5 dollars per ton, per MMBTU. One has to consider, that in the world gas sells for 3 and has even gotten as high as 12 dollars per MMBTU. Here there is a subsidized price, 12 times less than it is sold for outside the country. But then these gentlemen, these private capitalists, foreign and national, produce urea fertilizer with that gas in large quantities and the majority of it is exported. That is to say, it doesn't come to supply national needs. [These appear to be references (inter alia) to FertiNitro’s foreign shareholders, including KOMSA, and to KNI and the Offtake Agreement].
 It has cost us a lot to get these gentlemen to sell some fertilizer to the country. And after many discussions, we were able to secure that they would sell us only 10% of their production. And do you know at what price they would sell it to us? At triple the price at which Pequiven sells fertilizer in the national market. Such that, all of the fertilizer that was produced was at the disposal of the marketing companies, in this case a North American company, Koch, which would grab all of our fertilizer and sell it outside the country at speculative prices. [These appears to be references (inter alia) to KNI and the Offtake Agreement].
 With this nationalization action, we are guaranteeing, in the first instance, that all of the fertilizer that our farm workers may need, all of the fertilizer that our national seeding plan may need, all of the fertilizer that we may need to produce food for our people, will be abundant, cheap and secure for all of our people. That is, that would be, the only reason.
 This is what Commandant Chavez has indicated - These large industrial installations located in national territory, which exploit the workers, which speculate with our own resources, should pass into the hands of the Venezuelan state. They should pass into the hands of the people. With the acquisition, with the nationalization of this plant, what we are doing is strengthening our nation’s property, the property of all the men and women that live in the national territory. But in addition, and most importantly, the control of a plant like this one, FertiNitro, will enable us to guarantee the National Seeding Plan and the food sovereignty of the country. It will guarantee that the gas produced by our workers over there in PDVSA Gas, that they produce in Anaco with so much effort and what it has cost us to have controlled our oil & gas industry, may then be converted into fertilizer to benefit our people, so that our men, women and children may have a secure food supply.
 Also, in the same way that we are gathered here today in the State of Anzoátegui, in the Jose Antonio Anzoátegui complex, our fellow workers are in the State of Carabobo securing the nationalized installations of the Venoco company...
 Finally, I want to say in the name of our President, to guarantee to our workers, that all of the despicable capitalist practices, like the outsourcing and exploitation of workers, will end at this company. There can be no outsourcing whatsoever. There can be no exploitation whatsoever of our workers.
 We are going to build socialism... we are going to build socialism and in this sense, the Venezuelan state and the working class have an extraordinary role to play. Fellow workers, the future is yours. For you we are building socialism, for the men and women working every day in our national industries, in order to be able to guarantee to our people, to our communities, the communities that live near all of our industrial complexes, the communities of Viñedo, the communities of Barcelona, the communities of Puerto Espirito, that all of the Venezuelan people will receive the benefits that the Venezuelan state and its workers control, then, as important a company as this one that we are controlling - FertiNitro. Companions, workers, the call is to deepen the combat, to continue deepening our revolution, and, under the guidance and orientation of Commandant Chavez, we are sure that we are going to prevail. Country, Socialism or Death! We shall conquer! Thank you, companions."
"By virtue of the Expropriation Decree […] PEQUIVEN is authorized to make the necessary arrangements for the acquisition of the movable and immovable property of FERTINITRO, being granted all rights and obligations pertaining to the Bolivarian Republic of Venezuela for such purposes. PEQUIVEN is also authorized to initiate and execute the expropriation proceedings under the Expropriation Law for Public Benefit or Social Interest, published in the Official Gazette of the Bolivarian Republic of Venezuela No. 37,475 on July 1, 2002 (hereinafter "Expropriation Law ") until full and final transfer of ownership of the property listed therein to the Bolivarian Republic of Venezuela, through PEQUIVEN or a designated subsidiary thereof."
"As per our conversation this afternoon, FertiNitro confirms the continuing of the Offtake Agreement under the fulfil of each clause such as: price, allocations of products, assignments of markets, and all the other clauses related in that agreement. Based on, that FertiNitro will send the FNSTOCK before the workday end in order to each Offtaker can see the volumes available in December".160
"After the announcement of Venezuelan government about FertiNitro nationalizing. FertiNitro hereby confirms the continuing and fulfilling of the Offtake Agreement made and entered on April 8, 1998 […]
Based on the current start up of the plants, FertiNitro has sent the December and January allocation of products to each Offtakers and it is expected to comply fifty percent (50%) of the actual total plants output, such as it is stipulated in the agreement. Please note that total volume for Koch in December is as follow:
Ammonia: 23,000MT +/- 10%
Urea: 34,345 MT +/- 10%
Please let us know your December program in order to FertiNitro can make all the necessary arrangement with authorities as customs, export permissions, etc."161
"I am in receipt of your letter of December 1, 2010 to Jacob Strand of KNI acknowledging the nationalization of FertiNitro and KNI has authorized me to respond on their behalf. As you are aware, the government’s recent action constitutes an expropriation of KNI's, and its affiliates, interests in FertiNitro including, but not limited to, the Offtake Agreement.
Mr. Francisco Garcia recently informed me that he has been appointed by Pequiven to lead a commercial team to negotiate and compensate KNI and FertiNitro’s shareholders for the expropriation. I also understand that Pequiven has confirmed they have taken the offtake in its entirety, as part of the expropriation, and that they will compensate KNI for that. I further understand that Pequiven has requested that KNI purchase product under terms and conditions similar with the Offtake Agreement for a limited period of time while Pequiven negotiates with the lenders so as to ensure steady cash flow, in large part, for the benefit of the lenders. While we are still analyzing the full impact and ramifications of the government’s actions, we understand both Pequiven and FertiNitro’s desire to continue a commercial relationship with KNI despite having expropriated its and its affiliates’ property.
Given this, and on the understanding that Pequiven intends to compensate KNI, and its affiliates, in a manner to which they are entitled for the expropriation of their property under international law, for limited period of time until further notice, KNI agrees to purchase product under terms consistent with the Offtake Agreement. Payment for product shall be to the same historical bank accounts. It is also KNI’s expectation that FertiNitro will conduct its business affairs consistent with any and all lending obligations and in full compliance with all relevant laws.
This communication and KNI’s action in agreeing to purchase product from FertiNitro is on strictly without prejudice basis. KNI and its affiliates, hereby expressly reserve any and all rights that may exist including under the Offtake Agreement, resulting from, or in any way associated with, governmental actions including, but not limited to, rights under any domestic or international laws."162
"At the first meeting that we had in February 2011, one of the requests that Pequiven tabled was that, working together with the expropriated shareholders, that we would hire a third party to come in and give us an evaluation of the company, and then on that basis, establish compensation. But none of the expropriated shareholders accepted that proposal and that is why Pequiven on its own hired a third party to do the evaluation [...] Adventis is a company that has provided services to a variety of mixed companies in valuation for Pequiven, in other areas as well, it is a well recognised firm, and of course this is something that we have taken very seriously. It was something that was enshrined in a Government decree. We [Pequiven] were designated as the expropriating entity and we were taking this very seriously. We hired Adventis, we were trying to reach a consensus with the expropriated shareholders in order to get them involved in selecting a single valuation expert and since they didn't agree with this we felt free to go out and work with the company that we felt was the most qualified to do this job, and that was Adventis. It has considerable credentials which give it trustworthiness for this type of valuation and that’s why we decided to work with them. […] as part of the negotiation team I met with them, along with the rest of the group […] I can tell you that Adventis is a well recognised company and I don't think they would have jeopardised their reputation by getting involved in that type of valuation."
The witness had been asked whether Advantis had been instructed by Pequiven "to make the valuation as low as possible ."178
"In December 2011, FertiNitro satisfied its obligations with respect to the bondholders and the banks. At that point, once those obligations were satisfied, there was no longer a commercial requirement to have the offtake agreement in place. As part of its obligation to operate for the commercial purpose of FertiNitro, the ad hoc board of trustees took the decision that by getting rid of the offtake agreement, it would have the opportunity to pursue more lucrative sales agreements with other customers; or, to the extent necessary, to use production to satisfy domestic demand. "182
"I hereby notify you that, in accordance with the Resolution issued by the Board of Temporary Ad-Hoc Trustees of Fertilizantes Nitrogenados de Venezuela, FertiNitro, C.E.C., ("FertiNitro"), as is evidenced by appointment effected by Decrees handed down by [the Anzoátegui Court] [...]; effective from the date of this communication, FertiNitro shall not sell any more nitrogen fertilizers (urea and ammonia) to Koch Oil, S.A. under the marketing agreement entered into between Petroquímica de Venezuela S.A., International Petrochemical Sales Limited, Koch Oil S.A., and Fertilizantes Nitrogenados de Venezuela, C.E.C. on April 8, 1998; all of which is in fulfilment of what is established in Decree 7,713 published in Official Gazette of the Bolivarian Republic of Venezuela No. 39,528 of October 11, 2010, which orders the compulsory acquisition of movable and immovable property [..."183
"Without any doubt whatsoever, immediately after Decree 7713, a great deal of uncertainty arose."190 Towards FertiNitro’s banks and bondholders, it became important for the Respondent ostensibly to maintain the continuing efficacy of the Offtake Agreement, as apparently achieved by the Stand Still Agreement, so as to avoid a cross-default under the Common Security Agreement and other agreements with the banks and bondholders. From the Respondent’s perspective towards KNI, there was there no such necessity. The Tribunal returns to KNI’s position in Part VII below.