Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award on the Merits

1.
This is the final Award in Arbitration Case No. 455/2005 before the Cairo Regional Centre for International Commercial Arbitration (the "CRCICA"), rendered in accordance with Article 32 of the Arbitration Rules of the Cairo Regional Centre for International Commercial Arbitration effective as from 1 June 2007 and applicable to arbitral proceedings commenced prior to 1 March 2011 (the "CRCICA Arbitration Rules").

I. THE PARTIES

2.
National Air Navigation Services Company ("NANSC", "ECAA" or the "Claimant") is a non-share capital corporation wholly owned by the Egyptian Government. In 2001, the Egyptian Civil Aviation Authority was reorganized and NANSC replaced ECAA and became one of four Egyptian Holding Companies for airport and aviation services. Claimant had previously operated under The Ministry of Transportation Egyptian Civil Aviation Authority.
3.
Northrop Grumman Overseas Service Corporation ("NGOSC", "Northrop Grumman" or the "Respondent") is a wholly owned subsidiary of Northrop Grumman Corporation, a global company which provides systems, products and services in aerospace, electronics, information systems, shipbuilding and technical services to governments and commercial clients.
4.
NANSC and Northrop Grumman will be collectively referred to as the "Parties".

II. FACTUAL BACKGROUND

5.
The Parties’ dispute stems from the provision of equipment, spare parts and the installation and training related to the provision of Air Traffic Control ("ATC") systems to various airports located in Egypt.

A. THE CONTRACTUAL FRAMEWORK

6.
In March of 1997, the Respondent submitted a "Proposal for Upgrading of Approach and Terminal Area Control for Luxor, Hurghada and Sharm El Sheikh International Airports" in connection with a tender process initiated by the Claimant (the "Technical Proposal"). This Technical Proposal included a "Bill of Quantities" dated March 1997.1
7.
Between 2 and 6 May 1997, the Parties met and negotiated and agreed on specific modifications to the Respondent’s Technical Proposal.
8.
The Parties’ first contract entitled the "Upgrade of Approach and Terminal Area Control for Luxor, Hurghada and Sharm El Sheikh International Airports: Conditions of Contract" dated 9 May 1997 was signed in Cairo on 10 May 1997 (the "Conditions of Contract" or the "3-Lot Contract").2
9.
Under the 3-Lot Contract, the Respondent agreed to supply and install one ATC radar system at each of the following three Egyptian airports: Luxor, Hurghada and Sharm El Sheikh.
10.
The total agreed upon price for the 3-Lot Contract was US$30,900,000.00.
11.
Article 30 of the 3-Lot Contract includes the Parties’ arbitration agreement, which provides as follows:

Article Thirty: Disputes and Arbitration

Any controversy, claim or dispute arising out of the application including termination of this contract which could not be settled amicably shall be finally settled by arbitration.

The party who intends to resort to arbitration shall notify the other party by registered letter (return receipt requested) stating the question(s) upon which he intends to resort to arbitration.

Within thirty days subsequent to the date of receipt of said registered letter, the parties shall endeavour to amicably resolve the related question(s).

Failing a complete agreement on all such question(s), the questions involved shall be submitted to arbitration in the following manner:

- One arbitrator shall be designated by the Supplier;

- One arbitrator shall be designated by the E.C.A.A.

- One arbitrator who shall not be resident or national of either the A.R. Egypt or United States, shall be designated by mutual agreement between the two parties and if they fail to do so, shall be designated by the President of the International Chamber of Commerce.

The three arbitrators shall be designated as hereinabove set forth within a period of twenty days subsequent to the end of the thirty days period of attempted conciliation mentioned above. They shall then promptly proceed to carry out arbitration in Cairo Regional Centre for international commercial arbitration acting in accordance to the Egyptian laws and the international commercial laws of the United Nations as stipulated in the letter of instruction to E.C.A.A. by the Minister of State under N° 1390 dated 10th of March 1993.

The party requesting the arbitration shall pay the arbitrators transportation cost to Cairo and their living expenses as well as their remuneration until the arbitration award has been made in English Language.

The arbitrators shall decide the party who pay the arbitration expenses. The parties agree that the arbitrators shall be vested with full power to make a final settlement of the matter being arbitrated and their award shall be final and binding upon both parties.

12.
Article 6 of the 3-Lot Contract provides for the terms of payment and includes a schedule of payments (Article 6.1) as well as details regarding the provision of a letter of credit in favour of the Respondent (Article 6.2) in the amount of US$30,900,000.00. Article 6.2 states in relevant part:

Article Six: Terms of Payment

[...]

All payments shall be made through a fully funded irrevocable and confirmable letter of credit in the amount of Thirty Million Nine Hundred Thousand United States dollars ($30,900,000.00USD) in a form and content satisfactory to the Seller by a US bank acceptable to the Seller. The letter of credit shall be established within sixty (60) days of Contract signature in favour [sic] Northrop Grumman Overseas Service Corporation [...]

Said letter of credit shall remain in full force and effect for a minimum of twenty (20) months and until payments due under this Contract have been made.

All payments shall be free and clear of any deductions or penalties assessed under the Contract, or taxes, assessments or charges imposed by the opening or confirmable bank, or by a country, department, agency, political subdivisions or taxing authority thereof for the equipment only. In the event Buyer is required to withhold any such charges from any payment made to Seller, then Buyer shall reimburse such charges upon presentation of an invoice therefor [sic]. All expenses relative to establishing of the Letter of Credit in Egypt shall be at E.C.A.A.’s expense. All expenses incurred for the confirmation of the letter of credit, if required, in the United States and in Egypt, shall be at the supplier’s expense.

Payment number 1 (down payment) shall be made within (60) days of Contract signature. All other payments shall be made by the confirmable bank upon presentation of Seller’s invoices certified by Seller in five (5) copies, and the other documents required in 6.1 upon the date and in the amount specified in the Schedule of Payments.

The Seller shall reserve the right at any time without recourse or prejudice to the Seller to discontinue all work under this Contract in the event (i) payment for a duly submitted invoice has not been received by Seller within 30 days from the Maturity Date of the respective invoice, or (ii) the letter of credit has expired or has not been extended or increased when required to complete all payments. In no event, however, shall Buyer be relieved from his duty to pay Seller for all performance rendered in accordance with the Contract.

13.
Article 12 of the 3-Lot Contract expressly limits the consequences for any delay in the installation, delivery of equipment and services to the payment of liquidated damages, as follows:

Article Twelve: Delay in Delivery and Penalty for Delay

1. Delay in delivery of the equipment.

a) In the event of delay in delivery as defined in Appendix B in whole or in part of the quantities contracted for, the E.C.A.A. shall have the right to impose penalty for delay. Such penalty shall be considered as liquidated damages.

[...]

2. Delay in civil Works installation and services:

a) If the contractor fails to execute the erection of the civil works and the performance of installation and services within the period contracted for as defined in Appendix B, then the Contractor shall be liable to penalty for delay which shall be considered as liquidated damages computed upon this part or parts of civil works, installation and services of the contract so delayed, as follows:

[...]

c) The penalty shall not exceed 15% (fifteen percent) in any case of the value of the civil works, installation and services so delayed.

3. The penalties stated in paragraph 1 and 2 shall be enforceable by the sole fact of delay without any previous notification to the contractor or other formalities or recourse to judicial proceeding.

Should the contractor fail to perform its obligations within such time limit the penalties stated hereabove this clause shall not apply and be paid in full compensation to any other claim [sic] from the E.C.A.A. for the purpose of delay.

4. The amount of penalties will be paid to the E.C.A.A. by bank transfer or will be deducted from prices when effecting payments or from the performance guarantee.

5. If however, the contractor proves to the satisfaction (Logic Reasons) of the E.C.A.A. that the whole or part of the delay rise [sic] from cause beyond his control and which could not be foreseen at the time he signed the contract, the E.C.A.A. shall waive all or part of the said penalties.

6. In the case the Delay in Delivery exceeds three months the E.C.A.A. shall have the right to cancel the contract and the related Letter of Credit and confiscate the Guarantee Deposit after a 30 day notice without recourse to Jurisdiction or any other formalities. The Cancellation of the Contract shall in all cases be effected by a Registered Letter sent to the Supplier.

14.
Article 33 of the 3-Lot Contract, entitled "Limitation of Liability" states as follows:

Notwithstanding any contrary provision contained in this Contract, Supplier shall not be responsible to E.C.A.A. in contract or tort (including negligence) or otherwise for any direct, incidental, special or consequential damages of whatsoever nature, or for attorney’s fees, loss of use, loss of market share, or lost profits however these are characterized. Supplier shall not be liable to E.C.A.A. for an amount which in combination with all claims by E.C.A.A. against Supplier under this Contract exceeds the value of this Contract. In any event the liability of Supplier to E.C.A.A., whether in contract, tort (including negligence) or under any warranty, or otherwise, is exclusively limited to the remedies expressly provided under the terms of this Contract, in lieu of any and all other remedies at law or in equity.

15.
Article 39 of the Conditions of Contract, entitled "Performance Date" states as follows:

The Contract performance in accordance with the schedule in Appendix B shall commence on the date when all the events below shall have occurred which shall define the beginning of the contract performance under this Contract:

a) Establishment of the Letter of Credit as described in Article 6.

b) Supplier’s receipt of the down payment.

c) Letter of Guarantee for Performance (10% Eq. 5% non Eq.)

d) Letter of Guarantee for Down Payment.

16.
Appendix B to the Conditions of Contract establishes the "Project Time Schedule" as follows:

Equipment

15 months after the performance date

Installation

Site 1: 3 months after receipt of equipment at port in Egypt x

Site 2: 3 months after receipt of equipment at port in Egypt

Site 2: 3 months after receipt of equipment at port in Egypt

Provisional Acceptance

1 month after the last installation of equipment

17.
Provisional acceptance is governed by Article 20 of the 3-Lot Contract, which provides as follows:

Article Twenty: Provisional Acceptance

1. FOR CIVIL WORKS LOTS:

a) The buildings and furniture in them shall be handed over to the E.C.A.A. completed including electricity, air conditioning, etc. which shall be in working order and in particular comply with the specifications contracted for and with the safety and fire protection regulation in force.

b) The Works should [sic] be completed for provisional acceptance will be carried out for each station as follows:

1. Building and furniture

2. Power supply and air conditioning equipment and installation and good operation of the equipment delivered in the station under this contract.

3. Delivery of All technical documents related to this station called for in the technical specifications.

c) Provisional acceptance shall be requested by the contractor one month in advance. It shall be granted following completion of the Works, in presence of the contractor, his sub-contractors and the E.C.A.A

2. FOR EQUIPMENT AND INSTALLATION WORKS

a) Provisional acceptance shall be confirmed for each station depending on the case, following installation, adjustment ground testing and commissioning of the equipment and delivery of all technical documents called for in the general technical specifications.

b) However, if anomalies which prevents [sic] the operational use of the equipment are encountered in the equipment during flight testing subsequent to confirmation of provisional acceptance, the contractor shall be required to execute requisite modifications rapidly and at its cost.

c) Flight checks if any, shall be the responsibility of the E.C.A.A. and shall be carried out within a period mutually agreed upon following full execution of the Works. Related costs shall be borne by the E.C.A.A.

d) The provisional acceptance report of each station shall be signed by the two parties within two weeks after completion of the provisional acceptance test.

e) Without written comments and/or reserves from E.C.A.A. within those two weeks, the guarantee period as stated in Article 25 will start.

18.
The guarantee period is for a duration of one year, as per Article 25 of the 3-Lot Contract, which provides as follows:

Article Twenty-Five: Period of Guarantee

Supplier covenants and agrees that the equipment delivered under this Contract shall be manufactured in accordance with the Supplier's drawings and specifications and shall be free from defect in material and workmanship for a period of twelve (12) months after the provisional acceptance, as evidenced by the signature by E.C.A.A. on the Provisional Acceptance Document Appendix E3. Supplier will at its option repair, correct or replace at no cost to the E.C.A.A., CIF Egypt any such equipment which proves to be defective as defined under this Article. Supplier may at its option, participate in the failure investigation of the equipment at the installation sites and repair, correct or replace the defective item at such site or at its designated facility.

Repair, correction or replacement in the manner provided above shall constitute fulfillment of all of Supplier's obligations under this Warranty. This Warranty shall not apply to any equipment or parts which have been subjected to accident, misuse or unauthorized alteration, to normal wear (which includes components with innate limited life), to failures caused by not complying with Supplier's installation and service requirements (if the failed equipment or parts were not installed by Supplier or the Supplier's subcontractor). This Warranty shall not apply to consumable delivered under this Contract.

This assurance shall apply to and include correction of Technical Data pertinent to defective work and equipment as to the extent, delineated above, but in no event to include computer software.

If the repair, correction or replacement of equipment is not within the scope of this Article, then Supplier shall require a separate purchase order therefore from the E.C.A.A.

THE FOREGOING COVENANTS ARE EXCLUSIVE AND ARE IN LIEU OF ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR PURPOSE OR OTHER WARRANTY OF QUALITY, WHETHER EXPRESS, STATUTORY OR IMPLIED. IN NO EVENT SHALL SUPPLIER BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES.

[...]

19.
Finally, Article 21 of the 3-Lot Contract provides for the Claimant’s final acceptance of the Respondent’s services, as follows:

Article Twenty-One: Final Acceptance

21.1 Final acceptance of the systems shall be given at the dates of expiration of the corresponding guarantees periods, as defined in Article 25.

21.2 In all cases, final acceptances of the systems shall be awarded by E.C.A.A. which shall sign the relevant final acceptance certificates at the respective dates of expiration of relevant periods mentioned hereabove.

Final acceptance shall be subject to the Supplier having met all the requirements in this contract and to him having dealt with any accepted warranty claim which may have been pointed out during guarantee period, and any defects in the operation of the systems which arise during guarantee period.

21.3 Final acceptances of spares and consumable will take place upon complete delivery of such equipment to the installation sites and to E.C.A.A. stores, according to the case.

B. CONTRACT PERFORMANCE

20.
Beginning in June 1997, Northrop Grumman began performance on the 3-Lot Contract sites.3
21.
The Parties amended the 3-Lot Contract on 11 June 1998 so as to modify the technical specifications provided in the 3-Lot Contract and increase the contract value in the net amount of US$1,503,885.00, for a total of US$32,403,885.00.4
22.
On 15 September 1998, the Parties extended the 3-Lot Contract for the provision and installation of ATC systems to four other Egyptian airports, namely Alexandria, Aswan, El Arish and Taba under "Extension No.l to Contract No.27/96-97" (the "4-LotContract").5 The 3-Lot Contract, also known as the Conditions of Contract, is incorporated by reference into the 4-Lot Contract:

[...] The purpose of this Extension is to authorize Northrop Grumman Overseas Service Corporation to provide Upgrade of Approach and Terminal Area Control for Alexandria, Aswan, El Arish and Taba International Airports to the ECAA. The conditions of Contract No. 27/96/97 shall apply to this Extension. If there are any conflicts between the Conditions of Contract and the provisions contained in this Extension.6

23.
On 1 June 1999, following the compliance with all conditions referenced in Article 39 of the Conditions of Contract, the Respondent began performance of its work on the four Egyptian airports specified in the 4-Lot Contract.
24.
In April 2000, the delivery of all equipment and the performance of all required services was completed for the 3-Lot Contract, as per the Site Acceptance Test Procedure certificates for Sharm El Sheikh,7 for Luxor,8 and for Hurghada.9
25.
On 29 August 2000, the Claimant and the Respondent reached an agreement on Provisional Acceptance of the 3-Lot Contract known as the Parties’ Memorandum of Understanding.10
26.
The Memorandum of Understanding dated 29 August 2000, signed by General Kato on behalf of Claimant, and Mr. Donald Wilhelm on behalf of Respondent (the "MOU"), provides in relevant part as follows:

c. The ECAA agrees to complete provisional acceptance at Sharm El Sheikh and Luxor by 7 September 2000. Northrop Grumman will support a shadow operation with technical support at the site for one month following provisional acceptance. The ECAA agrees to complete Hurghada flight testing by 15 September 2000 with provisional acceptance by 30 September 2000.

d. Northrop Grumman will provide a proposed SPARES SUPPORT PLAN to the ECAA by 10 September 2000 which will include support for all radar system installations including the shadow operation and provisional acceptance. This plan will include a comprehensive list of all SPARES to be provided at each site together with estimated delivery dates for each SPARE. The ECAA and Northrop Grumman shall agree on this plan by 15 September 2000.

e. Provisional acceptance consists of site acceptance and flight testing at each site. Completion of these test shall be confirmed by ECAA’s consultant MITRE Corp., directly to the ECAA immediately following accomplishment of provisional acceptance at each site.

f. Northrop Grumman agrees to submit a revised electrical and structural drawing for Al Arish and Alexandria to the ECAA by 4 September 2000. These drawings shall be approved by ECAA by 15 September 2000. Northrop Grumman has submitted a proposal for increasing tower height. The ECAA and Northrop Grumman will agree on the additional scope and prices by 25 September 2000. The TMA electrical drawings will be approved without the additional requirement for generator buildings.

g. The ECAA agrees to provide power at Alexandria, Al Arish, Taba and Aswan before installation of the radars or AMS communication equipment.

h. Northrop Grumman will resubmit all open invoices by 30 August 2000. The ECAA agrees to provide full payment for the 15 currently open invoices by 20 September 2000.

i. The ECAA and Northrop commonly agree to complete Factory Acceptance Testing on the last ASR 12 radar no later than 15 September 2000.

j. Northrop Grumman agrees to provide lodging and per-diem compensation for the 4-LOT consistent with that provided for the 4- LOT.

k. The ECAA will permit immediate shipment authorization of equipment to be stored in a facility in Cairo to be provided by ECAA. Northrop Grumman shall be responsible for providing air conditioning and payment for electrical and water services.11

27.
Notwithstanding the terms of the Parties’ MOU, provisional acceptance by the Claimant was not formally provided until 28 September 2000 at Sharm El Sheik,12 13 December 2000 at Luxor13 and 1 June 2001 at Hurghada.14
28.
On 20 September 2000, the Respondent’s Mr. Donald Wilhelm sent to the Claimant’s General Kato the following letter:

Last month, you and I were able to resolve numerous issues that our respective teams were allowing to delay the completion of your ATC system. We documented our plan in a Memorandum of Understanding (MOU) and I believe you felt as I did, that this provided clear direction to our teams to move the program forward. Northrop Grumman has met all of the stated MOU commitments. Engineer Youssef has, to date, been unable to complete any of the MOU scheduled requirements. I urgently appeal to you to intercede with direction to your ECAA Project Team before we experience further delay. Of utmost importance are:

■ Provisional acceptance at Sham El Sheikh and Luxor which was to be accomplished on 7 September. This is holding up shadow operations, which were to commence immediately following provisional acceptance. Both systems are up and running and my people are standing by to support these tests.

■ Flight testing at Hurghada which was scheduled to be completed by 15 September. I understand that an aircraft has still not been scheduled.

■ Shipment of 4 Lot ASR-12 radar equipment by signing off the successful completion of FAT’s for the ASR-12 Radars.

■ Pay all open invoices as agreed. We prepared new invoices by the date agreed to (30 August), but have only received $472,054 of the $6.1 million we agreed to be paid by 20 September. I know that you will understand that it is impossible for my company to continue work without payment and to absorb delay and additional work at no cost.15

On 26 September 2001, the Respondent sent the Claimant three signed copies of the minutes of the 3-Lot Final Program Management Review Meeting held between 10 and 19 September 2001 (the "PMR Meeting").16 During the PMR Meeting, the Parties reviewed and discussed all open items listed on the Provisional Acceptance Certificates of the 3-Lot Contract sites.17 With respect to achieving final acceptance, the minutes of the PMR Meeting state as follows:

Per the contract, Final Acceptance will be granted once the defects that occurred during the warranty period are corrected and the remarks on the relevant Provisional Certificates are rectified to the satisfaction of both parties. Any defects that occur outside the warranty period are not the responsibility of NG and will not affect the granting of Final Acceptance.18

30.
The minutes of the PMR Meeting further reflect the Parties’ agreement on the following warranty periods for each of the 3-Lot Contract sites:

Sharm El Sheik [sic]

Effective warranty dates - 9 October 2000 - 8 October 2001

[...]

Luxor

Effective warranty dates -- 13 December 2000 - 12 December 2001

[...]

Hurghada

Effective warranty dates - 5 February 2001 - 4 February 2002

[...]19

31.
On 10 November 2001, the Parties entered into a settlement agreement in which they waived their respective outstanding and potential claims under the 3-Lot Contract (the "3-Lot Settlement Agreement").20
32.
The 3- Lot Settlement Agreement provides as follows:

This letter is to document the agreement between the undersigned Parties waiving:

1. Any potential claim by the NCANS to any payment of liquidated damages.

2.Any potential claim by the NCANS for Roof Access, SIT Testing, FAT Testing, Installation of Fiber Optic Interface vs. Microwave Interface to ADOC at Luxor, Performance of VCSS Training of 4 weeks instead of 6 weeks, BOQ items of 9 TEDs, 30 Handsets, 2 Foot Switches, 29 Dual Jack Modules, 11 Loud Speakers and 20 Recording Tapes, costs delineated in Attachment 1.

3. Any potential claim by NGOSCO related to AMS out of Scope software changes, Travel for NCANS Personnel within Egypt, Out of scope per diem and travel days, FAT lodging, Frequency Generator Spares, Facility Impacts, Replaced MSSR Antenna, Redundant Transformers, RSS FAT and Training. AMS Retraining, Delayed Payment Impact, Maintenance of Advance Guarantee, Letter of Credit Fees, Additional OMT’s for CANC, Shipping from Alexandria to Sites and work delay and disruption, costs delineated in Attachment 1.

Further, NCANS agrees it will pay NGOSCO customs duties and taxes upon mutual agreement of receipts presented. Payment shall be remitted to NGOSCO upon verification of customs duties and taxes receipts.

Per this agreement, any additional efforts for the 3-lot portion of the contract not specifically required in the contract will require a written requested from NCANS to provide those efforts. NGOSCO will review the request and or resolved by this agreement, respond with an appropriate proposal.

The parties here to have accepted and executed this agreement by their duly authorized representatives.21

33.
Attachment 1 to the 3-Lot Settlement Agreement consists of a table listing the specific items waived by each of the Parties and their dollar value, as follows:
34.
The 4-Lot Contract Provisional Acceptance Certificates reflecting the Claimant’s acceptance of the work at these locations as per Article 20 of the Conditions of Contract, were signed on the following dates: Aswan, 13 January 2002; El Arish, 1 February 2002; Borg El Arab, 9 March 2002; and Taba, 19 March 2002.22
35.
In December 2002, in-person negotiations between the Parties’ representatives took place in order to resolve outstanding issues, including, but not limited to, the performance of the unfulfilled obligations under the MOU and the 3-Lot Settlement Agreement.23
36.
On 2 January 2003, the Claimant drew down the Respondent’s performance guarantee in the amount of US$3.3 million.24

III. PROCEDURAL HISTORY

37.
On 1 October 2005, the Claimant submitted its Notice of Arbitration against the Respondent before the CRCICA. The arbitration was instituted pursuant to Article 30 of the Conditions of Contract, cited above.25
38.
On 1 November 2005, the Respondent submitted a Response to the Notice of Arbitration.
39.
On 8 December 2005, the Claimant submitted an Answer to the Response to the Notice of Arbitration.
40.
On 6 March 2006, the CRCICA advised the Parties of the appointment of Mr. L. Yves Fortier, CC, QC, as Chairman of the Tribunal and confirmed the constitution of the Tribunal in the present arbitration as follows: Dr. Aktham Elkholy, nominated by the Claimant, Dr. Ahmed Sadek El-Kosheri, nominated by the Respondent, and Mr. L. Yves Fortier, as Chairman.
41.
On 24 March 2006, the Tribunal invited the Parties to consult with one another and seek to agree on a procedural timetable for the conduct of the present arbitration.
42.
On 21 May 2006, the Parties jointly submitted a Draft Procedural Order to the Tribunal for its consideration.
43.
On 13 June 2006, the Tribunal issued Procedural Order No. 1 which states, in part, as follows:

a) The Tribunal has been properly constituted.

b) The Arbitration Rules ("Rules") of the Cairo Regional Centre for International Commercial Arbitration ("Centre") govern the arbitration.

c) The language of the arbitration is English. Except for legal precedents and doctrinal commentary, both of which shall be excerpted as appropriate in English but shall also be submitted in the original, documents in any language other than English shall be accompanied by an informal translation into English.

d) Correspondence between the Parties and the Tribunal, including submissions, applications and orders, shall be sent to and through the Centre.

e) The procedural timetable for filing memorials shall commence on 26 June 2006 and shall be as follows:

(i) The Claimant shall file its Statement of Claim by 9 September 2006.

(ii) The Respondent shall file its Statement of Defense (and Counterclaim, if any) by 24 November 2006.

(iii) Claimant shall submit its Reply (and in the case of a Counterclaim, its Statement of Defense to Counterclaim) by 23 January 2007.

(iv) Respondent shall submit is Rejoinder (and in the case of a Counterclaim, its Reply to the Statement of Defense to Counterclaim) by 24 March 2007.

(v) In the case of a Counterclaim, Claimant shall submit its Rejoinder to the Counterclaim by 24 May 2007.

(vi) Claimant and Respondent shall submit their Witness Statements (to include Expert Statements) by 8 July 2007.

(vii) Claimant and Respondent shall submit their Witness Statements in rebuttal by 7 August 2007.

(viii) The Tribunal’s Reading Period shall not exceed 60 days.

(ix) An oral hearing shall be held of no less than three eight-hour days, with one day held in reserve. Dates for an oral hearing shall be fixed by the Tribunal before 1 August 2006 after consultation with the parties.

(x) There shall be at least one round of simultaneous post-hearing submissions, the time-limit of which the Tribunal shall set by reference to the date on which the Parties will have received the transcripts of the oral hearing.

f) No new documents shall be introduced into the record after the first round of Witness Statements, except by leave of the Tribunal.

g) Submissions shall be color-coded, paginated, paragraph-numbered, and shall contain detailed tables of content. All numbering shall be continuous across submissions.

h) Exhibits shall be tab-numbered continuously across submissions. Claimant’s exhibits shall be cited as "C-Exhibit (sic) (x)", and Respondent’s exhibits as "R-Exhibit (x)", where (x) refers to the exhibit number.

i) No witness shall be heard who has not filed a Witness Statement.

j) All witnesses shall be subject to cross-examination.

k) No Witness Statement shall stand whose author fails to submit to cross-examination.

l) Witnesses, once heard, may remain in the hearing room.

m) Witnesses may testify in the language of their choosing. A Party calling a witness who proposes to testify in a language other than English shall arrange for the Centre to provide interpretation into English. The costs of the interpretation shall be costs in the arbitration.

n) A verbatim transcript of the hearing shall be prepared. The costs of the transcript shall be costs in the arbitration.

o) The Tribunal shall endeavour to render its final award as expeditiously as possible while always retaining the right to do so at such time as it considers appropriate.

[...]

44.
On 17 July 2006, the Tribunal proposed that the hearing on the merits of this arbitration commence in Cairo on 28 October 2007 and continue until 1 November if necessary.
45.
On 25 July 2006, the Parties confirmed the proposed hearing dates to the Tribunal.
46.
On 25 July 2006, the Respondent made an application to the Tribunal with respect to jurisdiction.
47.
On 3 August 2006, the Claimant responded to the Respondent’s application on jurisdiction.
48.
On 14 August 2006, further to the Tribunal’s directions, the Respondent replied to the Claimant’s letter of 3 August 2006.
49.
On 5 September 2006, the Claimant requested that the Tribunal grant an extension of the date for submission of its Statement of Claim from 9 September to 24 October 2006.
50.
On 6 September 2006, further to the Tribunal’s directions, the Respondent replied to the Claimant’s request of the previous day.
51.
On 12 September 2006, the Tribunal granted the Claimant’s request for an extension of the date for submission of its Statement of Claim, and modified Procedural Order No.1 accordingly.
52.
On 21 September 2006, the Respondent requested "as a matter of urgency" that the Tribunal render a decision regarding its application on jurisdiction prior to the Claimant's submission of its Statement of Claim on 24 October 2006.
53.
On the same day, the Claimant invited the Tribunal to issue an Interim Award in respect of the Respondent’s application based on the Parties’ submissions.
54.
On 26 September 2006, the Tribunal, having considered the Respondent’s application of 25 July, the Claimant’s response of 3 August, as well as Article 21 of the CRCICA Arbitration Rules, advised the Parties "that, even though Respondent has not formally challenged the Tribunal’s jurisdiction, its request raises a fundamental issue which needs to be determined in a definitive manner before the Parties’ memorials are submitted." Accordingly, the Tribunal directed the Parties to submit two rounds of briefs, and suspended the procedural timetable.
55.
On 7 October 2006, the Respondent submitted its Brief on Jurisdiction.
56.
On 20 October 2006, the Claimant submitted its Response to the Respondent’s Brief on Jurisdiction.
57.
On 31 October 2006, the Respondent filed its Response to the Claimant’s Brief of 20 October on Jurisdiction.
58.
On 12 November 2006, the Claimant filed a Reply to the Respondent’s Response on Jurisdiction.
59.
On 2 February 2007, the Tribunal, having considered the Parties’ submissions and deliberated, issued an Interim Award in accordance with Articles 21 and 32 of the CRCICA Arbitration Rules, wherein the Tribunal declared as follows:

i. The arbitration clause contained in Article 30 of the Agreement of 10 May 1997 [as supplemented] is valid.

ii. The Tribunal has jurisdiction to adjudicate the present dispute.

iii. The present arbitral proceedings are admissible.

iv. Each Party shall submit to the Tribunal a duly notarized Power of Attorney in favor of their respective solicitors authorizing them to undertake all measures necessary to file and pursue the present proceedings within fourteen (14) days from the date of the present Interim Award.

v. Respondent’s requests are rejected as being moot.

vi. The costs of the present proceedings will be reserved until the Tribunal’s decision on the merits.26

60.
On 22 February 2007, the Parties advised the Tribunal that they would meet and seek to agree on a new procedural timetable and a revised dated for the commencement of the merits hearing.
61.
On 20 August 2007, the Claimant submitted a notarized Power of Attorney in compliance with the Tribunal’s Interim Award of 2 February 2007.
62.
On 30 August 2007, the Respondent submitted its notarized Power of Attorney.
63.
On 20 September 2007, the CRCICA advised the Parties on behalf of the Tribunal that they were requested to submit their agreed upon timetable on or before 1 October 2007.
64.
On 11 March 2008, the CRCICA requested the Parties "inform the Centre with the current situation of the case, and whether or not an amicable settlement is reached between the two parties."
65.
On 14 June 2008, the Tribunal advised the Parties that if it did not receive a response regarding the status of the negotiations on a timetable for the continuation of the arbitration within two weeks, it would issue an order for the termination of the proceedings pursuant to Article 34.2 of the CRCICA Arbitration Rules, which provides:

If, before the award is made, the continuation of the arbitral proceedings becomes unnecessary or impossible for any reason not mentioned in paragraph 1, the arbitral tribunal shall inform the parties of its intention to issue an order for the termination of the proceedings. The arbitral tribunal shall have the power to issue such an order unless a party raises justifiable grounds for objection.

66.
On 17 June 2008, the Claimant’s counsel, Dr. Karim Hafez, advised that his firm no longer represented the Claimant in these proceedings.
67.
On 17 June 2008, the Tribunal was advised that the Parties were in the last stages of settlement discussions and that they would inform the CRCICA in due course whether they would continue with the arbitration or amicably settle the dispute.
68.
On 17 July 2008, Dr. Mohamed Selim El-Awa, newly appointed counsel on behalf of the Claimant, requested the Tribunal to grant the Parties a delay of ten weeks to continue settlement discussions before submitting an agreed timetable of proceedings if there was no settlement..
69.
On 31 July 2008, the Tribunal directed the Parties to report on the status of the their negotiations by 1 September 2010.
70.
On 31 August 2008, the Respondent advised the Tribunal that the Parties were "unable to reach an amicable solution to the dispute" and requested the Tribunal "set a new procedural schedule for the continuation of the arbitration."
71.
On 3 September 2008, the Tribunal circulated a draft procedural timetable for the continuation of the arbitration and invited the Parties to seek to agree on the timetable and report back to the Tribunal.
72.
On 10 September 2008, the Parties advised the Tribunal of their agreement on the proposed timetable.
73.
On 17 September 2008, the Tribunal issued a Procedural Timetable with respect to the submission of pleadings and production of documents, as follows:

(6) The procedural timetable for filing memorials shall commence on 1 September 2008 and shall be as follows:

(i) Claimant shall submit its Statement of Claim by 1 November 2008.

(ii) Respondent shall submit its Statement of Defence (and Counterclaim, if any) by 1 January 2009.

(iii) Claimant shall submit its Reply (and in case of a Counterclaim, its Statement of Defence to Counterclaim) by 1 March 2009.

(iv) Respondent shall submit its Rejoinder (and in case of a Counterclaim, its Reply to Statement of Defence to Counterclaim) by 1 May 2009.

(v) In case of a Counterclaim, Claimant shall submit its Rejoinder to the Counterclaim by 1 July 2009.

(vi) Claimant and Respondent shall submit their Witness Statements (to include Expert Statements) by 15 August 2009.

(vii) Claimant and Respondent shall submit their Witness Statements in rebuttal by 15 September 2009.

(vii) (sic) The Tribunal’s Reading Period should not exceed 60 days.

(viii) There shall be held an oral hearing of not less than three eight-hour days, with one day held in reserve.

(ix) There shall be at least one round of simultaneous post-hearing submissions whose time-limit the Tribunal shall set byreference to the date on which the Parties shall have received the transcript of the oral hearing.

74.
On 7 October 2008, the Claimant requested an extension of time of six weeks to submit its Statement of Claim.
75.
On 14 October 2008, the Tribunal, having sought and received the Respondent’s comments in respect of the Claimant’s request for an additional delay, issued a further Procedural Order, modifying the Procedural Timetable, as follows:

(i) Claimant shall submit its Statement of Claim by 1 December 2008.

(ii) Respondent shall submit its Statement of Defence (and Counterclaim, if any) by 1 February 2009.

(iii) Claimant shall submit its Reply (and in case of a Counterclaim, its Statement of Defence to Counterclaim) by 1 April 2009.

(iv) Respondent shall submit its Rejoinder (and in case of a Counterclaim, its Reply to Statement of Defence to Counterclaim) by 1 June 2009.

(v) In case of a Counterclaim, Claimant shall submit its Rejoinder to the Counterclaim by 1 August 2009.

(vi) Claimant and Respondent shall submit their Witness Statements (to include Expert Statements) by 15 September 2009.

(vii) Claimant and Respondent shall submit their Witness Statements in rebuttal by 15 October 2009.

(viii) The Tribunal's Reading Period should not exceed 60 days.

(ix) There shall be held an oral hearing of not less than three eight-hour days, with one day held in reserve.

(x) There shall be at least one round of simultaneous post-hearing submissions whose time-limit the Tribunal shall set by reference to the date on which the Parties shall have received the transcript of the oral hearing.

76.
On 16 October 2008, the Respondent requested an extension of time of one month to submit its Statement of Defence and Counterclaim.
77.
On 28 October 2008, the Tribunal, having sought and received the Claimant’s comments in respect of the Respondent’s request for an additional delay, further modified the Procedural Timetable as follows:

(i) Claimant shall submit its Statement of Claim by 1 December 2008.

(ii) Respondent shall submit its Statement of Defence (and Counterclaim, if any) by 1 March 2009.

(iii) Claimant shall submit its Reply (and in case of a Counterclaim, its Statement of Defence to Counterclaim) by 1 May 2009.

(iv) Respondent shall submit its Rejoinder (and in case of a Counterclaim, its Reply to Statement of Defence to Counterclaim) by 1 July 2009.

(v) In case of a Counterclaim, Claimant shall submit its Rejoinder to the Counterclaim by 1 September 2009.

(vi) Claimant and Respondent shall submit their Witness Statements (to include Expert Statements) by 15 October 2009.

(vii) Claimant and Respondent shall submit their Witness Statements in rebuttal by 15 November 2009.

(viii) The Tribunal’s Reading Period should not exceed 60 days.

(ix) There shall be held an oral hearing of not less than three eight-hour days, with one day held in reserve.

(x) There shall be at least one round of simultaneous post-hearing submissions whose time-limit the Tribunal shall set by reference to the date on which the Parties shall have received the transcript of the oral hearing.

78.
On 1 December 2008, the Claimant filed its Statement of Claim.
79.
On 23 December 2008, the Tribunal, following submissions by the Parties, determined that Article 30 of the Conditions of Contract was clear and, in the absence of an agreement of the Parties to the contrary, would remain operative throughout the proceedings. Article 30 provides in relevant part as follows:

The party requesting the arbitration shall pay the arbitrators transportation cost to Cairo and their living expenses as well as their remuneration until the arbitration award has been made in [sic] English Language.

80.
Also on 23 December 2008, the Tribunal proposed to hold a hearing on the merits of the arbitration between 20 and 23 March 2010 in Cairo, Egypt (the "Hearing").
81.
On 26 February 2009, the Respondent filed its Statement of Defence and Counterclaims.
82.
On 1 May 2009, the Claimant filed a Reply to Defence and Defence to Counterclaim.
83.
On 1 July 2009, the Respondent filed a Rejoinder to the Claimant’s Reply to Northrop Grumman’s Statement of Defence and Reply to Claimant’s Statement of Defence to Northrop Grumman’s Counterclaims.
84.
On 1 September 2009, the Claimant submitted a Rejoinder to the Respondent’s Reply.
85.
On 10 September 2009, the Respondent wrote to the Tribunal and objected to the Claimant’s submission of an additional Reply to the Respondent’s Statement of Defence. The Respondent alleged that the Claimant’s Rejoinder addressed the Respondent’s final pleading, whereas according to the terms of the Tribunal’s Procedural Timetable, such a rejoinder was limited to the Respondent’s Counterclaim only. The Respondent requested that the Tribunal strike from the record the parts of the Claimant’s Rejoinder falling outside the scope determined for a rejoinder, or else grant leave to the Respondent to file a response to the Claimant’s submission.
86.
On 16 September 2009, the Claimant wrote to the Tribunal to advise that it would not submit any Witness Statements or expert evidence in these proceedings:

[...]

After spending a whole year reading and writing in preparation of the Arbitration file, the Claimant is quite convinced that this Arbitration is totally confined to legal and documents matters, which need no Witness or Expert opinion.

Therefore, Claimant shall not submit any Witness or Expert Statements. Meanwhile, Claimant reserves its right to comment on any Witness or Expert opinion, if any, to be submitted by the Respondent.

87.
On 2 October 2009, further to the Respondent’s request, the Tribunal granted the Respondent leave to file a Response to the Claimant’s Rejoinder.
88.
Also on 2 October 2009, the Tribunal issued the following directions:

1. In accordance with the Tribunal’s Procedural Order of 28 October 2008, para 3(vii), the Claimant may submit Witness Statements in rebutal of Respondent’s Witness and/or Expert Statements, if any, by 15 November 2009.

2. In accordance with Article 24(1) of the Arbitration Rules of the Cairo Regional Centre for International Commercial Arbitration, each party has the burden of proving the facts it relies on to support his claim or defence and, in accordance with Article 25(6) of the Rules, the Tribunal will determine the admissibility, relevance, materiality and weight of the evidence offered.

3. Obviously, if a party does not submit any witness or expert statements, it will not be allowed to present any witnesses at the hearing. However, it may cross-examine Respondent’s witnesses and comment on Respondent’s witness statements. In due course, the Tribunal will determine, in its decision, whether or not each Party has discharged its burden of proof.

89.
On 15 October 2009, the Respondent filed thirteen Witness Statements on behalf of: (i) Donald C. Wilhelm, Jr.; (ii) John F. Murray; (iii) Martin P. Simoni; (iv) Paul Mason; (v) Robert J. Warns; (vi) Jean Gaylord-Person; (vii) Kirby A. Neal; (viii) Myron Rosen; (ix) Fatin Badir; (x) Robert Mercier; (xi) Kenneth Leidy; (xii) Patrick Kelly; and (xiii) Cyril Morris.
90.
On 20 October 2009, the Respondent submitted a Response to the Claimant’s Rejoinder.
91.
On 20 October 2009, further to correspondence from the Parties, the Tribunal clarified its directions of 2 October 2009 as follows:

The Tribunal has considered the positions put forward by both Parties and reaffirms that either Party may submit rebuttal witness statements on or before 15 November 2009 or comment orally on any evidence put before the Tribunal at the hearing. The next available opportunity for the Parties to submit written comments to the Tribunal is through the submission of Post-Hearing Briefs, as may be directed by the Tribunal in due course.

[…]

92.
On 15 November 2009, the Claimant submitted the "Claimant’s Comment on Respondent’s Witness Statements" which contained commentary on the substance and nature of the Respondent’s witness statements as well as forty three new' documents, including legal authorities and factual exhibits.
93.
On 22 November 2009, the Respondent objected to the Claimant’s submission of 15 November. The Respondent referred to the Tribunal’s decision of 2 October and directions of 20 October 2009 and moved to strike the Claimant’s submission from the record.
94.
On 24 November 2009, the Tribunal recalled its earlier directions to the Parties of 2 and 20 October 2009 as well as the terms of the Procedural Timetable of 17 September 2008, which provides in relevant part: "No new documents shall be introduced into the record after the first round of Witness Statements, except by leave of the Tribunal." The Tribunal invited the Claimant to respond to the Respondent’s motion to strike the Claimant’s submission of 15 November 2009 by 4 December 2009.
95.
On 3 December 2009, the Claimant requested that the Tribunal dismiss the Respondent’s motion to strike the Claimant’s submission of 15 November 2009. Alternatively, the Claimant requested that the Tribunal grant it leave to file its submission, including the forty three additional documents. As a further alternative prayer, the Claimant requested that only the forty three new documents be excluded from the record and that the Claimant’s comments remain in the record and be considered by the Tribunal.
96.
On 4 December 2009, the Tribunal invited the Respondent to respond to the Claimant’s three alternative requests on or before 11 December 2009.
97.
On 10 December 2009, the Respondent renewed its request to strike the Claimant’s submission of 15 November 2009.
98.
On 4 January 2010, the Tribunal, having considered the Parties’ respective submissions, issued Procedural Order No. 2, as follows:

The Tribunal recalls that, as in any arbitration, it is vital that the record in the present Arbitration include all the evidence which is relevant to the issues in dispute between the Parties. It is also essential, for the sake of good order, that procedural directions of the Tribunal be complied with by the parties. At the end of the day, an arbitral tribunal, such as the present one, is vested with a measure of discretion which allows it to issue decisions which harmonize these two principles without causing prejudice to either party.

Accordingly, the Tribunal, pursuant to para 7 of the Tribunal’s Procedural Timetable of 17 September 2008 has decided to grant leave, retroactively, to the Claimant to introduce into the record the following factual exhibits: Exhibits C-450 to C-468, Exhibits C-470 to C-479, and Exhibits C-482 to C-485 inclusively.

With respect to Exhibits C-480 and C-481, the Tribunal has decided to allow these factual exhibits into the record provided Claimant submits, within two weeks from this date, an English translation of same - English being the language of this Arbitration.

On the other hand, Respondent’s request to strike from the record Claimant’s Comments to Respondent’s Witness Statements (75 pages) and Exhibits C-443 to C-448 and Exhibit C-469 is hereby granted. As the Tribunal stated earlier, in due course, the parties will be allowed to provide written comments to the Tribunal through the submission of Post-Hearing Briefs.

All of Respondent’s additional costs incurred as a result of the Tribunal’s decision will be borne by the Claimant and will be adjudicated at the conclusion of the Hearing.

In addition, the Tribunal notes that Respondent, in its letter of 10 December 2009, stated, in part, as follows:

"[...] Northrop Grumman also could have submitted yet more documents showing Claimant’s breaches."

Accordingly, the Tribunal grants leave to Respondent to submit, within two weeks from this date, any additional factual documents "showing Claimant’s breaches" as well as documents which relate to Claimant’s new Exhibits, listed above, which the Tribunal has allowed into the record.

The arbitral proceedings will now continue in accordance with the Tribunal’s Procedural Order of 28 October 2008. The Tribunal reconfirms that the hearing in Cairo will be held as scheduled from 20 to 23 March 2010.

99.
On 18 January 2010, the Respondent filed Exhibits R-341 to R-361 into the record of these proceedings pursuant to the terms of Procedural Order No. 2.
100.
On 22 January 2010, the Tribunal requested the Parties to prepare and simultaneously submit a Skeleton Argument by 8 March 2010. The Tribunal also circulated a draft Order of Proceedings for the Hearing.
101.
On 7 February 2010, the Claimant advised the Tribunal as follows:

1- Claimant noted, with due respect, the decision of the esteemed Tribunal to allow respondent’s exhibits R-341 to R-361 into the record of the arbitration.

2- Claimant does not want to cross-examine any of the 13 witnesses whose written statements were submitted by respondent.

3- As for the draft Order of Proceedings for the hearing, I discussed it with Mr. Tamim Foda, Counsel for Respondent, and we agreed to it. So there is no need to hold a telephone conference on this matter.

4- Mr. Tamim Foda and myself agreed to request the esteemed tribunal to allow us one week extension of time to submit the Sekelton Argument so as to submit it by 15 March 2010 instead of 8 March 2010.

We shall be grateful if this is granted.

102.
On the same day, the Respondent advised the Tribunal as follows:

As for the draft Order of Proceedings for the hearing, which was discussed with Mr. Tamim Foda, Counsel for Respondent, we would like to clarify that no agreement has been reached in this regard. Based on the foregoing, Respondent confirms that it still wishes to hold a telephone conference on this matter with the tribunal as confirmed for March 1st 2010.

103.
On the same day, the Tribunal granted the Parties’ joint request for a delay for the submission of the Parties’ Skeleton Argument, to 15 March 2010.
104.
On 8 February 2010, the Tribunal advised the Parties that a telephonic conference would be held with the Chairman of the Tribunal on 1 March 2010 to discuss the Order of Proceedings for the Hearing and any other procedural issues the Parties wished to raise.
105.
On 16 February 2009, the Respondent requested the Tribunal’s permission to present six of its witnesses at the Hearing, namely: (i) Mr. Donald C. Wilhelm Jr.; (ii) Mr. John F. Murray; (iii) Mr. Martin P. Simoni; (iv) Mr. Paul Mason; (v) Mr. Robert J. Warns; and (vi) Mr. Kirby A. Neal. The Respondent further requested that daily transcripts of the Hearing be made and that the Parties share equally the costs associated therewith.
106.
On 17 February 2009, the Tribunal granted the Respondent’s request to present the six witnesses identified in its correspondence of 16 February and invited the Claimant to indicate whether it was in agreement with the proposal for the Parties to share the cost of daily transcripts of the Hearing.
107.
On 23 February 2010, the Claimant advised the Tribunal as follows:

1- Claimant counsel is going to be available for the conference call set for 1st March 2010 at 4:30 pm Cairo time.

2- As for cross-examining the Respondent witnesses, Claimant’s earlier position not to cross-examine any of them was based on an understanding, after telephone call between Mr. Tamim Foda, counsel for the Respondent and myself, that none of the witnesses is going to be present in the hearing. However, now it seems that I was mistaken in this understanding and as six witnesses are going to be present in the hearing Claimant reserves it’s right to cross-examine them.

3- Claimant shall submit it’s Skeleton Arguments on or before the dated (sic) fixed by the Tribunal i.e. 15th March 2010.

4- Claimant confirms that it need not to have a transcript of the hearing and thus is not ready to share the cost of such transcript with Respondent.

108.
On 26 February 2010, the Tribunal advised the Parties of the appointment of Ms. Rachel Bendayan, an associate in the law firm of the Chairman, as Secretary to the Tribunal and enclosed a copy of Ms. Bendayan’s curriculum vitae.
109.
On 28 February 2010, the Tribunal circulated the Agenda of the procedural teleconference of 1 March 2010.
110.
On 1 March 2010, the Chairman presided a procedural teleconference with representatives of the Parties. During this teleconference, the Parties agreed to: (i) the time of the commencement of the hearing days; (ii) the order of presentation of opening arguments; (iii) the order of presentation of the Respondent’s witnesses; (iv) the cross-examination by the Claimant of the Respondent’s witnesses; (v) the daily transcripts of the Hearing and the shared costs thereof; and (vi) the order of presentation of closing arguments.
111.
On 10 March 2010, the Tribunal issued the final Agenda for the Hearing.
112.
On 15 March 2010, the Parties submitted their respective Skeleton Arguments
113.
On 20 and 21 March 2010, the Hearing was held at the CRCICA headquarters in Cairo Egypt. The Tribunal was assisted by Ms. Rachel Bendayan, Secretary to the Tribunal, and Mr. Khaled Osman, Head of Disputes Management for the CRCICA.
114.
During the Hearing, the Claimant was represented by Dr. Mohamed El-Awa, and Ms. Miriam El-Awa of El-Awa Law Firm. Also present on behalf of the Claimant were Ms. Adalat Fahmy, Mr. Yasser Fathi, and Mr. Yousef Abdelmaksoud. The Respondent was represented by Mr. Tamim Foda, Ms. Anne-Marie Storch and Mr. Ayman El Khatib of Al Kamel Law Office, Mr. Allen B. Green, Mr. William T. O'Brien, Mr. Michael T. Kavanaugh, Mr. Marques Paterson and Ms. Valerie T. Lam of McKenna Long & Aldridge LLP. Also present on behalf of the Respondent were Michael N. Clark and Joseph O. Costello.
115.
The Chairman of the Tribunal opened the Hearing by introducing the members of the Tribunal as well as the Tribunal’s Secretary. The Tribunal then invited those present at the Hearing to introduce themselves.
116.
In accordance with the Agenda of the Hearing as agreed by the Parties, first the Claimant and then the Respondent presented their opening statements to the Tribunal.
117.
The Respondent’s following witnesses were heard by the Tribunal during the Hearing: (i) Mr. Robert J. Warns; (ii) Mr. Kirby A. Neal; (iii) Mr. Donald C. Wilhelm Jr.; (iv) Mr. Paul Mason; (v) Mr. Martin Simoni; and (vi) Mr. John F. Murray.
118.
Each witness was examined and cross examined by the Parties and questioned by the Tribunal.
119.
Following the testimony of the witnesses, first the Claimant and then the Respondent presented the Tribunal with their closing remarks.
120.
Thereafter, the Tribunal directed the Parties to simultaneously exchange two rounds of Post-Hearing Briefs. The Tribunal advised the Parties that it would circulate a list of issues to be addressed in their post-hearing submissions.
121.
On 1 April 2010, the Tribunal sent the Parties a list of questions to be addressed in their Post-Hearing Briefs. These are:

1) Do proposals, such as Respondent’s Proposal for Upgrading the Approach and Terminal Areas [...] Books 1 and 2, and Technical Proposal and. Technical Specifications constitute pre-contractual documents that define Respondent’s obligations under the 3-Lot and 4-Lot Contracts? Did the Parties materially vary the content of these proposals through subsequent agreements? What is the interpretation and effect of Article 32 of the Conditions of Contract entitled "Order of Precedence"? To what document(s) in particular does item 3 of Article 32, the "Supplier’s Technical Proposal", refer? What is the legal weight afforded to such document(s) and can they be amended under Egyptian Civil Law?

2) Did Respondent deliver fully operational AMS, radar and communication systems at all 3-Lot and 4-Lot Contract airport sites in accordance with the Parties' contracts? Are theses systems currently operational? In this connection, the Tribunal refers to Dr. El-Awa's closing oral arguments at pp. 322-324 of the Transcript of 21 March.

3) Does the 3-Lot Settlement Agreement of 10 November 2001 constitute a bar to the Parties' claims arising under the 3-Lot Contract? What of claims arising under the 3-Lot Contract for damages incurred after the signature of the Settlement Agreement?

4) Did Claimant exercise its contractual rights and obligations in good faith? Did Respondent exercise its contractual rights and obligations in good faith? What are the requirements of good faith during the performance of a contract under Egyptian Civil Law?

5) Is Respondent’s inclusion of the following amounts in its counterclaims allowed under Egyptian Civil Law?

(a) cost of capital at 6% per annum compounded

(b) loss of profit of 20%, and

(c) for certain counterclaims, cost of inflation at 4%

6) Has Claimant met its burden of proving the facts relied on in support of its 16 principal claims (Article 24.1 of the CRCICA Arbitration Rules)?

7) Has Respondent met its burden of proving the facts relied on in support of its 7 counterclaims (Article 24.1 of the CRCICA Arbitration Rules)?

122.
On 14 May 2010, the Parties each submitted their first Post-Hearing Brief.
123.
On 18 June 2010, the Parties each submitted their second Post-Hearing Brief.
124.
The Tribunal then commenced its deliberations.
125.
On 10 October 2010, the Tribunal requested the Parties to prepare and simultaneously submit their submissions on costs by 18 October 2010.
126.
On 18 October 2010, the Parties submitted their respective Costs Submissions.

IV. APPLICABLE LAW

127.
The substantive law applicable to the merits of this arbitration is determined in accordance with Article 33 of the CRCICA Arbitration Rules and the Parties’ arbitration agreement.
128.
Article 33 of the CRCICA Arbitration Rules provides in relevant part as follows:

1. The arbitral tribunal shall apply the law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules, which it considers applicable.

[...]

3. In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

129.
The Parties’ arbitration agreement is contained in Article 30 of the Conditions of Contract, which states in relevant part as follows:

Any controversy, claim or dispute arising out of the application including termination of this contract which could not be settled amicably shall be finally settled by arbitration.

[...]

The three arbitrators shall be designated as hereinabove set forth within a period of twenty days subsequent to the end of the thirty days period of attempted conciliation mentioned above. They shall then promptly proceed to carry out arbitration in Cairo Regional Centre for international commercial arbitration acting in accordance to the Egyptian laws and the international commercial laws of the United Nations as stipulated in the letter of instruction to E.C.A.A. by the Minister of State under N° 1390 dated 10th of March 1993.27

130.
It is uncontested between the Parties that Article 30 of the 3-Lot Contract, which is incorporated by reference into the 4-Lot Contract, provides that the law applicable to the Parties’ dispute is Egyptian law and the international commercial laws of the United Nations.
131.
Both Parties rely on the Egyptian law in their written and oral submissions in respect of the merits of this arbitration.
132.
As already affirmed in the Tribunal’s Interim Award of 2 February 2007, the arbitration agreement contained in Article 30 of the Conditions of Contract is valid.
133.
The Tribunal thus determines that the substantive law applicable to the merits of the present arbitration is Egyptian law and the specified international commercial laws of the United Nations.

V. JURISDICTION OF THE TRIBUNAL

134.
The jurisdiction of the Tribunal is determined in accordance with Article 21 of the CRCICA Arbitration Rules and the Parties’ arbitration agreement.
135.
Article 21 of the CRCICA Arbitration Rules provides as follows:

1. The arbitral tribunal shall have the exclusive power to rule on objections that it has no jurisdiction, including any objections with respect to the existence or validity of the arbitration clause or of the separate arbitration agreement.

2. The arbitral tribunal shall have the power to determine the existence or the validity of the contract of which an arbitration clause forms a part. For the purposes of article 21, an arbitration clause which forms part of a contract and which provides for arbitration under these Rules shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

3. A plea that the arbitral tribunal does not have jurisdiction shall be raised not later then in the statement of defence or, with respect to a counter-claim, in the reply to the counter-claim.

4. In general, the arbitral tribunal shall rule on a plea concerning its jurisdiction as a preliminary question. However, the arbitral tribunal may proceed with the arbitration and rule on such a plea in their final award. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator.

136.
The Parties’ arbitration agreement is contained in Article 30 of the Conditions of Contract, cited above.28
137.
In its Interim Award of 2 February 2007, the Tribunal, having considered the detailed briefs of the Parties on questions related to jurisdiction, declared that it had jurisdiction to adjudicate the present dispute.29

VI. THE PARTIES’ RESPECTIVE CLAIMS

138.
The following is a summary of the Parties’ respective claims, as established on the basis of their written submissions and evidence.

A. THE CLAIMANT’S CLAIMS

139.
The Claimant, NANSC, requests a declaration that it is entitled to terminate the 3-Lot Contract, the Amendment to the 3-Lot Contract and the 4-Lot Contract as well as damages in the amount of US$50,836,234.64 due to fundamental breach of contract by the Respondent.30
140.
The Claimant summarizes the Respondent’s various breaches in its Notice of Arbitration:

16. Specifically, Claimant will establish that, among other breaches, Respondent has failed timely, properly or at all (a) to provide and maintain financial guarantees contemplated by the Agreements; (b) to design, build, test, package, invoice, insure, ship, install, commission and maintain hardware according to contractual specifications; (c) to design, build, package, invoice, insure, install, commission, test, license, and maintain software according to contractual specifications; and (d) to train Claimant’s personnel to operate and maintain the equipment supplied.

17. Additionally, Claimant will establish that Respondent has sought to overcharge Claimant for services either not provided at all or provided otherwise than in accordance with the terms of the Agreements.31

141.
The Claimant presents sixteen principal claims in its Statement of Claim, many of which are broken down into numerous sub-claims, for a total of forty-nine discreet claims, as follows:

1. Claim One/1: Undelivered radar support system ("RSS") in the amount of US$180,091.50

2. Claim One / 2: Undelivered radar output analysis tool ("ROAT") in the amount of US$21,698.00

3. Claim One/3: Undelivered automatic site selection ("ASS") in the amount of US$53,977.10

4. Claim One/4: Undelivered data link analysis tool ("DLA") in the amount of US$26,988.55

5. Claim One / 5: Undelivered RSS sensor models in the amount of US$30,000.00

6. Claim Two / 1: Undelivered frequency generators under the 4-Lot Contract in the amount of US$743,432.00

7. Claim Two/2: Undelivered remote control and monitoring system ("RCMS") under both the 3-Lot Contract and the 4-Lot Contract in the amount of US$198,247.00

8. Claim Three: Voice Communication Switching System ("VCSS") tinder both the 3-Lot and 4-Lot Contracts in the amount of US$346,703.40

9. Claim Four / 1: Undelivered bypass recording and playback servers in the amount of US$241,144.00

10. Claim Four / 2: Undelivered flight strip printers in the amount of US$27,818.00

11. Claim. Four/3: Unsupplied air carrier billing units ("ACBs") in the amount of US$562,667.00

12. Claim Four / 4: Unsupplied furniture in the amount of US$893,508.00

13. Claim Five: Failure to supply test equipment and tools under the 3-Lot and 4-Lot Contracts in the amount of US$394,268.00

14. Claim Six: Failure to supply documentation under the 3-Lot Contract and the 4-Lot Contract in the amount of US$261,040.00

15. Claim Seven / 1: Microwave subsystems removed from the scope of work under the 3-Lot and 4-Lot Contract, representing the amount of [US$240,934.10 per Statement of Claim / US$242,926.00 per Post-Hearing Brief]

16. Claim Seven / 2: MV/LV transformers removed from the scope of work under the 3-Lot and 4-Lot Contracts, representing the amount of US$205,593.00

17. Claim Seven / 3: Uninterruptable power supply units ("UPS") removed from the scope of work under the 3-Lot and 4-Lot Contracts, representing the amount of US$320,463.00

18. Claim Seven/4: Voltage regulators ("VR") removed from the scope of work under the 3-Lot and 4-Lot Contracts, representing the amount of US$134,080.00

19. Claim Eight: Failure to replace the diesel generator at the El-Arish site in the amount of US$58,149.00

20. Claim Nine: Failure to supply twelve HVAC units access ladders to sites under the 3-Lot and 4-Lot Contracts in the amount of US$81,132.00

21. Claim Ten: Failure to supply spare parts under the 3-Lot and 4-Lot Contracts in the amount of US$2,324,458.00

22. Claim Eleven / 1: Delay penalty under the 3-Lot Contract and 4-Lot Contract in the amount of US$6,485,009.29

23. Claim Eleven / 2: Extending the letters of credit under the 3-Lot and 4-Lot Contracts in the amount of US$558,242.43

24. Claim Eleven / 3: Damages Due to Delays in Achieving Cost Recovery Under the 3-Lot and 4-Lot Contracts in the amount of US$3,699,041.16

25. Claim Eleven/4: Damages due to delays in providing radar service under the 3-Lot and 4-Lot Contracts in the amount of US$4,491,957.60

26. Claim Eleven / 5: Cost of supervision team used during the execution of the 3-Lot and 4-Lot Contracts in the amount of US$2,798,700.00

27. Claim Eleven / 6: Technical consultant fees in the amount of US$359,500.00

28. Claim Twelve: Containers rent and storage charges incurred during the performance of the 3-Lot and 4-Lot Contracts in the amount of US$610,387.90

29. Claim Thirteen: Non-performance of certain 3-Lot Contract works in the amount of US$111,170.00

30. Claim Fourteen / 1 Supply of ASR-10 instead of ASR-12 at all 4-Lot Contract aites in the amount of US$1,034,080.00

31. Claim Fourteen / 2: Maintenance of Respondent’s PSR under the 3-Lot and 4-Lot Contracts in the amount of US$1,816,920.00

32. Claim Fourteen/3: Programmable output format under the 3-Lot and 4-Lot Contracts in the amount of US$350,000.00

33. Claim Fourteen/4: Failure to provide an MSSR upgradeable to Mode S in the 3-Lot and 4-Lot Contract sites in the amount of US$187,500.00

34. Claims Fourteen/5, 6 and 7: Failure to provide Radar data production rates, Range accuracy, and Range coverage under the 3-Lot and 4-Lot Contracts for a total amount of US$2,364,555.00

35. Claim Fourteen / 8: Plot output rate under the 3-Lot and 4-Lot Contracts in the amount of US$ 364,000.00

36. Claim Fourteen / 9: AMS VCRI requirements in the amount of US$3,092,743.36

37. Claim Fourteen / 10: Unsupplied AMS capabilities in the amount of US$4,135,843.00

38. Claim Fourteen / 11: Voice recording and playback in bypass mode under both the 3-Lot and 4-Lot Contracts in the amount of US$ 608,032.00

39. Claim Fifteen / 1: Undelivered VCSS depot maintenance training under the 3-Lot and 4-Lot Contracts in the amount of US$194,202.00

40. Claim Fifteen / 2: Undelivered in-site familiarization training under the 3-Lot and 4-Lot Contracts in the amount of US$1,021,768.00

41. Claim Fifteen / 3: Undelivered domicile furniture and equipment under the 4-Lot Contracts in the amount of US$600,539.00

42. Claim Fifteen / 4: Undelivered maintenance engineers for the 3-Lot and 4-Lot Contracts in the amount of US$111,928.00

43. Claim Fifteen / 5: Factory acceptance tests cancelled / conducted in absence of the Claimant for the 3-Lot and 4-Lot Contract sites in the amount of US$487,240.00

44. Claim Fifteen / 6: Undelivered trainees’ lodging under the 3-Lot and 4-Lot Contracts in the amount of US$293,720.00

45. Claim Fifteen / 7: Undelivered site integration tests ("SITs") under the 3-Lot and 4-Lot Contracts in the amount of US$1,530,470.00

46. Claim Fifteen/8: Undelivered DEC radar support under the 3-Lot and 4-Lot Contracts in the amount of US$ 139,247.00

47. Claim Fifteen / 9: Unattended operation in the amount of US$1,000,000.00

48. Claim Fifteen / 10: Undelivered program management and program engineering management under the 3-Lot and 4-Lot Contracts in the amount of USS7,677,792.00

49. Claim Sixteen: Reliability, Maintainability and Availability in the amount of US$3,736,087.95

142.
The Claimant’s above claims amount to a total of US$57,192,199.64. From this sum, the Claimant subtracts the sum of US$2,993,768.00 which it submits was withheld from the Respondent’s invoices under the 3-Lot and 4-Lot Contracts. The Claimant also subtracts the amount of $3,362,197.00 representing the value of the Respondent’s performance letter of credit.32
143.
The Claimant claims from the Respondent the sum of US$50,836,234.64 plus interest and costs in the present arbitration.

B. THE RESPONDENT’S COUNTERCLAIM

144.
The Respondent requests that the Claimant’s claims be dismissed in their entirety, and presents its own counterclaims against the Claimant for breach of contract.
145.
The Respondent submits that the Claimant’s claims are unsupported by any evidence and is thus entirely unfounded:

13. Claimant has yet to prove any actual Contract specification that was not met by Northrop Grumman- Claimant similarly has yet to prove that any particular Contract item was not delivered. Instead of putting forth specific and definitive facts supporting its argument, Claimant offers no witness testimony, misstates facts, and distorts the evidentiary record. Northrop Grumman shipped, delivered, and installed all ATC System equipment, spares, and contractually required documents. Evidence substantiating NANSC's statement is in no record before this Tribunal, and this has never been rebutted by anything other than lawyer's arguments.

14. After shipping all required equipment, Northrop Grumman successfully delivered and installed the ATC System equipment at all seven sites. Claimant issued, albeit delayed, Provisional Acceptance at all seven sites. As stated in the Contract and discussed at the Hearing, Provisional Acceptance follows numerous contractual tests that must be met, and in turn, show the sites are fully operational precisely because those tests have been met. Thus, after Provisional Acceptance, there is "nothing left... [because] the system is completely ready to be used."33

146.
The Respondent summarizes the various contractual breaches of the Claimant as follows:

Specifically, Claimant repeatedly delayed contract performance by, inter alia, failing to timely provide the Contract down payment and letter of credit; and coercing additional equipment and services from Northrop Grumman. As a result, Northrop Grumman experienced increased labor and equipment costs and was prevented from completing the 3-Lot and 4-Lot Contracts under the contractual timeline. Claimant also repeatedly breached the 3-Lot Contract and 4-Lot Extension by, inter alia, demanding that Northrop Grumman supply services and equipment beyond the scope of the 3-Lot Contract and 4-Lot Extension, and refusing to pay Northrop Grumman monies owed.34

147.
More specifically, the Respondent claims:

a. Damages due to the Claimant’s delays and the Respondent’s provision of out-of-scope work under the 3-Lot Contract and the Claimant’s repudiation of the 3-Lot Settlement Agreement

b. Damages due to the Claimant’s delays and loss of concurrency under the 4-Lot Contract

c. Direct costs due to the Claimant’s failure to pay for out-of-scope work under the 4-Lot Contract

d. The Claimant’s withholding of payments owed to the Respondent and the Claimant’s improper draw-down of the Respondent’s performance guarantee

e. The Claimant’s failure to pay for the design for the construction of an external building and the provision of this design to a third party in breach of contract

148.
According to the Respondent’s Statement of Defence and Counterclaim, the Respondent claims damages from the Claimant in the total amount of US$46,986,430.00 as well as the costs associated with the present arbitration.35
149.
The Respondent subsequently revised its claim in the Witness Statements of Mr. Donald Wilhelm and Mr. John Murray. The Witness Statement of Mr. Murray provides the following comparative table detailing the Respondent's revised claims:36

Counterclaim Cost ElementCounterclaim AmountRevised Amount
Profit & Interest On 3-Lot Settlement Agreement $7,615,356 $7,615,356
3-Lot (combined with 4 Lot impact) Material Increases Due to Loss of Concurrency $2,398,070 $6,206,848
3-Lot Labor Cost increases Due to Loss of Concurrency $3,400,000 $3,428,406
4-Lot Delay Damages Period One - 6.5 months $700,000 $745,038
4-Lot Delay Damages Period Two -15 Months $6,200,000 $6,208,650
4-Lot Delay Damages Period Three - 6 Months $900,000 $993,384
4-Lot Tower Extensions $306,000 $298,303
Additional RF Test Generator $75,467 $101,582
Additional Step Down Transformers $42,464 $57,158
Egyptian Travel $83,435 $112,307
FM 200 Fire Protection Systems Installation $197,832 $266,291
Generator Modifications $41,056 $55,263
Temporary Access Road $167,317 $225,217
Live Fire at Borg El-Arab $68,508 $92,215
Land Mines at El Arish $62,736 $84,446
Fiber Optic Access Points $24,742 $33,303
4-Lot Mid-Point Escalation $2,300,000 $3,968,327
4-Lot Material Cost Increase $3,350,836 See combined 3 Lot and 4 Lot impact above
Advanced Payment Bond Fees $35,694 $42,830
4-Lot Banc du Caire Fees $421,849 $287,268
Delay in Payments due to Delay of Performance Milestones $6,058,800 $11,410,063
Drawdown of the 4-Lot Performance Bond $4,817,036 $5,117,858
Withheld 3-Lot Invoices $785,609 $795,298
Withheld 4-Lot Invoices $3,985,437 $3,801,528
Misappropriation of Design $2,832,408 $2,780,738
Drawings
Total $46,870,652 $54,727,677

VII. SUMMARY OF THE PARTIES’ ARGUMENTS

A. THE CLAIMANT’S POSITION

150.
The Claimant’s evidence consists of more than 480 documentary exhibits, including contractual documents and correspondence.
151.
The Claimant has submitted no witness statement in support of its claim. As noted earlier, it submits that "[it] is quite convinced that this Arbitration is totally confined to legal and document matters, which need no Witness or Expert opinion."37 Accordingly, no witness was presented at the hearing to give evidence on behalf of the Claimant although it did cross-examine the Respondent’s witnesses.
152.
The Claimant submitted detailed comments on the Respondents’ Witness Statements in its first Post-Hearing Brief.38 The following is a summary of the Claimant’s comments.
153.
With respect to the Witness Statement of Mr. Donald Wilhelm, the Claimant alleges that any affirmation regarding events that occurred prior to Mr. Wilhelm taking over responsibility for the 3-Lot and 4-Lot Contracts in March 200039 is not within his personal knowledge.
154.
As for Mr. Wilhelm’s chart illustrating the delay damages suffered by the Respondent,40 the Claimant notes errors in the dates referenced in the chart, including the date of the Parties’ technical interchange meeting ("TIM") held on 16 August 199741 and the dates of the various acceptance tests for the 4-Lot Contract sites held between September and December 2001.42
155.
The Claimant denies the witness’ assertion that the 3-Lot Settlement Agreement constitutes a final settlement of the 3-Lot Contract, stating that the 3-Lot Settlement Agreement only lists specific items to be waived with no reference to a global settlement to the 3-Lot Contract.43
156.
The 3-Lot Settlement Agreement itself is considered by the Claimant to prove that the Respondent continuously failed to timely carry out its undertakings under the 3-Lot and 4-Lot Contracts. Pursuant to the 3-Lot Settlement Agreement, the Claimant agreed to waive any existing or potential liquidated damages for delay, which damages represent the only delay penalty available to the Claimant.44
157.
The Claimant denies Mr. Wilhelm’s statement that the price of the 3-Lot Contract was US$32,482,261.00 and the price of the 4-Lot Contract was US$44,038,843.00 as the contract itself states that the 3-Lot Contract price is US$30,900,000 (increased to US$32,403,885.00 after Amendment No. 1 of 11 June 1998)45 and the 4-Lot Contract states that its price is US$43,821,759.46
158.
The Claimant submits that Mr. Wilhelm contradicts himself in that he states at paragraph 15 of his Witness Statement that the proposed concurrency was 22 months while in paragraph 52 Mr. Wilhelm, states that the Respondent "assumed a 34-month period during which the 3-Lot and 4-Lot efforts will be running concurrently."47
159.
The Claimant denies that the MOU signed by Mr. Wilhelm on behalf of the Respondent and General Kato on behalf of the Claimant constitutes a formal agreement.48 According to the Claimant, it was not. intended as a contract.
160.
With respect to final acceptance of the 3-Lot Contract, Mr. Wilhelm states that final acceptance under the contract was "intended to occur automatically at the end of the 12 month guarantee period" while the witness maintains that the Parties explicitly agreed that the 3-Lot Settlement Agreement constitutes "final acceptance".49 The Claimant submits that the 3-Lot Settlement Agreement was signed while the warranty period for certain 3-Lot Contract sites was still running.
161.
With respect to the 4-Lot Contract delay losses, the Claimant submits that Mr. Wilhelm’s chart should be dismissed as being a further undated illustration representing the Respondent’s 4-Lot Contract delay damages without documentary support.50 The Claimant also notes that the 4-Lot Contract was signed on 15 September 1998 whereas the chart shows losses beginning in June 1998.51
162.
In his Witness Statement, Mr. Wilhelm states that the Respondent was forced to use its own capital to finance the 3-Lot and the 4-Lot Contracts.52 This statement contradicts the witness’ earlier statement that the Respondent had to borrow money to finance the project.53
163.
The Claimant also notes that the Mr. Wilhelm states that "Northrup Grumman completed all 21 training courses for the Claimant’s personnel in fibre optics"54 but that none of the courses listed in the Parties’ contracts relate to fibre optics.55
164.
The Claimant comments on the cross-examination of Mr. John Murray.56 During the hearing, Mr. Murray testified that he could not identify any contractual stipulation requiring concurrency between the 3-Lot and 4-Lot Contracts, but that the 4-Lot Contract was priced assuming concurrency and that this was to the knowledge of the Claimant. In response to questions regarding Mr. Wilhelm’s letter of 24 May 2000,57 Mr. Murray testified that the Respondent advised the Claimant of the need for its personnel to be working on both contracts on a concurrent basis.
165.
With respect to the evidence of Mr. Paul Mason, the Claimant, notes firstly that Mr. Mason states that he negotiated with Engineer Adalet and Engineer Youssef in a meeting held between 2 and 6 May 1997.58 According to the Claimant, Engineer Adalet did not attend this meeting as she was out of the country at that time.59
166.
The Claimant considers some of Mr. Mason’s affirmations in his Witness Statement to be paradoxical. The witness first states that the "RSS tool is used to determine the radar coverage [...] and has nothing to do with the radar operability once the radar site is selected. [...] RSS is not used during radar operations, thus a radar can function without ii "60 and subsequently, "I personally used the RSS output plots at the 3-Lot site Sharm El Sheikh and 4-Lot site Aswan, during the flight testing."61
167.
Mr. Mason states that the Respondent provided the modified RSS tool to the Claimant in April 200062 and that "ROAT was delivered to NANSC [...] at the same time the RSS was delivered."63 On the other hand, Mr. Simoni states that "in early February 2002, Northrop Grumman shipped the ROAT PC to NANSC."64 According to the Claimant, the RSS was shipped in April 2000 and the ROAT PC was shipped in February 2002 and that these two components cannot have been delivered at the same time.
168.
During his cross-examination, Mr. Mason testified that he did not have direct knowledge of the fact that a piece of equipment was delivered to the Claimant or not. What was to his personal knowledge was that all requirements for the systems were tested and all components functioned. Mr. Mason had personally conducted the flight test for the 3-Lot and the 4-Lot Contract sites.65
169.
With respect to the Witness Statement of Mr. Robert Warns, the Claimant notes that while Mr. Warns addresses the delays suffered by the Respondent due to the release of equipment from customs, he does so without any reference to documentation.
170.
The Claimant notes that Mr. Warns’ states that Article 2.4 of the 3-Lot Contract, which provides that the "E.C.A.A. reserves the right to increase or decrease quantities for [...]"66 was drafted specifically to allow the Claimant to expand the contract to additional airport sites at the same price as the 3-Lot Contract.67 The Claimant denies this assertion and points out that the first sentence of the 4-Lot Contract reads that the contract is issued pursuant to Article 27 of the 3-Lot Contract, and does not make any reference to Article 2.4 of the 3-Lot Contract. The Claimant notes that the witness failed to provide any documentary evidence supporting his assertion that the Claimant was aware of the possibility of adding additional airport sites to the 3-Lot Contract.
171.
Mr. Warns also states that the Parties agreed to add an option 80nm coverage at an additional cost.68 The Claimant contends that the Respondent initially included this 80nm coverage option in its Technical Proposal and that the Claimant’s acceptance of such an option was not a change of specifications. Moreover, the Claimant alleges that the witness failed to state that this option was no longer available and that the Claimant did not in fact exercise this option at all.
172.
The Claimant notes that Mr. Warns states that a number of payment milestones under the 3-Lot Contract were to be paid by the Claimant upon completion of specific items such as for site design and documentation, TMA room facilities, roadways and utilities, building foundation, structure and masonry, and site structure.69 The Claimant states that none of these milestones are listed in Article 6 of the 3-Lot Contract.70
173.
Mr. Warns states as follows in his Witness Statement "Northrop Grumman also was required to provide spare LRU’s and piece parts for the equipment during a two-year warranty period. Thus, Northrop Grumman had no obligation to ensure the availability of spares free-of-charge after the warranty period. Thereafter, Northrop Grumman agreed to provide spares to NANSC at a fixed price and Northrop Grumman guaranteed that spares would be available for a minimum period of twenty years after Site Acceptance Test ("SAT"). "71 According to the Claimant, the Respondent failed to satisfy any of the obligations emphasized by Mr. Warns himself. Mr. Wilhelm’s letter of 14 July 2008 states clearly that "all AMS 2000 parts on NANSC’s list are out of production’ and "ASR-12 radar has not been in production since 2000"72 The Claimant contends that the Respondent failed to satisfy its obligations and also failed to notify the Claimant of the fact that spare parts were out of production prior to any of the sites being provisionally accepted.
174.
With respect to the Witness Statement of Ms. Jean Denise Gaylord-Person, who did not appear before the Tribunal, the Claimant states that the witness’ affirmation that she installed the bypass recording feature at each of the 4-Lot Contract sites is incorrect. The record of the site acceptance tests as reflected in the Minutes of the AMS Aswan Site Acceptance Test,73 the AMS Alexandria-Borg El Arab Site Acceptance Test,74 the AMS Site Acceptance Test for Tabah,75 and the AMS Site Acceptance Test for El Arish,76 all include remarks by the Claimant of non-tested system components.
175.
The Claimant states that the Respondent had a contractual obligation to deliver an ACB unit and notes that the witness admits that the AMS systems installed by the Respondent did not include an ACB unit.77 According to Ms. Gaylord-Person, there was no requirement to have an ACB unit. This was a feature that could be purchased but was not required to operate the ATC system.78
176.
With respect to the evidence of Mr. Kirby Neal, the Claimant alleges that certain affirmation in his Witness Statement are incorrect. The witness states that "in January 2000, he became the Egyptian in-country Northrop Grumman ATC System Program Manager [...] the ATC System installation at 3-Lot site Sharm El Sheikh was nearly complete, and the ATC system installation at the other 3-Lot sites was significantly under way."79 According to Mr. Neal’s letters to the Claimant in August 2000, the Respondent requested permission to transfer various spare parts and equipment from the Claimant’s spare parts warehouse, the CANC, to the 3-Lot Contract sites.80 As a result, according to the Claimant, the statement is contrary to the witness’ own letters.
177.
Mr. Neal also states "the tests are supposed to occur in order - ICAO Test, SAts, and Flight Tests - because each test builds on the former test, but a successful Flight test conclusively shows that the other testes would have been successful."81 According to the Claimant, this is incorrect because there are additional tests which Mr. Neal does not list, such as factory acceptance tests, site integration tests and functional demonstrations and analysis tests.
178.
Contrary to Mr. Neil’s Witness Statement, the Claimant states that spare parts were not held up at Egyptian Customs.82 The Claimant states that the Respondent fails to provide any documentary support for the repeated allegation of delayed release of equipment from customs.
179.
Mr. Neal states that he attempted to transition performance to the 4-Lot Contract in mid-to-late 2000, but that he was unable to do so.83 The Claimant notes that the Respondent undertook to refurbish and provide a new gate construction for the Claimant’s 4-Lot Contract equipment storage building during a meeting held on 20 September 2000,84 and that Mr. Neal was in. attendance at this meeting and was thus well aware that any delay in starting the 4-Lot Contract was a consequence of the Respondent’s failure to timely complete its equipment storage preparation.
180.
In his Witness Statement, Mr. Neal states that "NANSC demanded that all the 4-Lot system equipment be in Egypt by December 2000"85 and the Respondent met this request. The Claimant submits that this is incorrect as can be seen from the Respondent’s letter of 8 April 2001, which states that shipment no. 7 was delivered to Alexandria Port in January 2001.86
181.
Mr. Neal further states that "in April 2001, my engineers began fully installing the 4-Lot ATC System equipment."87 However, the witness’ own letter of 15 May 2001 acknowledges receipt of some 4-Lot Contract equipment from the Claimant. As a result the Respondent could not have begun installing equipment in April 2001.88
182.
With respect to the Witness Statement of Mr. Myron Rosen, who did not give oral evidence, the Claimant notes that the witness learned that a copy of the conditional down payment letter of guarantee "was delivered to a Northrop Grumman employee in Egypt with a handwritten Arabic notation."89 The witness asserts that, as per the Parties’ contracts, Arabic was not the official language of correspondence. According to the Claimant, the Respondent’s knowledge of the handwritten notation is evidence of the fact that the Respondent was aware that the Claimant rejected the down payment letter of guarantee. Although many of the Respondent’s employees have extensive knowledge of Arabic, none of the Respondent’s representatives discussed the annotation with the Claimant. The Claimant also notes that the down payment letter of guarantee was submitted by hand and without a covering letter, contrary to the requirements on correspondence.
183.
With respect to the Witness Statement of Ms. Fatin Badir, who did not give oral evidence, the Claimant denies that Ms. Badir was the Respondent’s Office manager in Cairo from 1997 to 2006 as per the introductory paragraph of her Witness Statement.90 The Respondent’s Cairo office was not established until 21 January 1998, so it was impossible to have an office manager prior to that date.91
184.
Ms. Badir states that the Respondent delivered flight strip printers to the Claimant.92 The Claimant notes that the first page of the exhibit referred to by the witness states "Notes regarding shipment: (example): 1. Temporary import / Item is a failed unit being returned to Northrop Grumman ESSS for servicing."93 The document therefore proves that the equipment delivered to the Claimant was faulty and needed to be shipped back to the United States. The witness has not provided any evidence that these faulty items were fixed and shipped back to Egypt and remitted to the Claimant.
185.
Ms. Badir also states that the Respondent submitted all required documentation to the Claimant.94 The Claimant states that only 10 pages out of the 88 pages submitted as supporting evidence are signed as received.
186.
The witness further contends that the Respondent fulfilled its obligations to provide the Claimant with the required 3-Lot Contract spare parts.95 The Claimant states that none of the 77 pages submitted as supporting evidence comply with the contractual description of spare parts as per Article 6.1 of the minutes from technical meeting of May 1997 which states in part "Northrop Grumman agreed about the concept of supplying one spare part set on each site plus one set at the central workshop in Cairo. Each set shall include at least one item of each type of model and any other component used in the radar system, sufficient for two years support."96 According to the Claimant, twenty items out of thirty-two items listed as spare parts for the Hurghada site were either not tested, not on hand at the time of testing, failed during testing or were moved to or from other sites before or after the test. Similar comments were made with respect to spare parts for Sharm El Sheikh and Luxor.97
187.
With respect to the 4-Lot Contract spare parts obligation, Ms. Badir states that the Respondent fulfilled its obligation in this regard.98 The Claimant states that the supporting evidence lists spare parts which were never tested and that some of the spare parts were found to be missing.99
188.
Ms. Badir also affirms that the Respondent delivered all furniture to the Claimant.100 The Claimant states that the evidence submitted consists of invoices submitted by the Respondent requesting payment for furniture without proving any actual delivery of furniture.
189.
With respect to the Witness Statement of Mr. Robert Mercier, who did not appear as a witness, the Claimant notes that in support of the Respondent’s delivery of ASR-12, the witness refers to various shipping documents dated 3 November 2000 and 16 November 2000.101 The Claimant states that this demonstrates that the Respondent had not yet shipped the ASR-12 some 20 months after receiving the Claimant’s down payment and letter of credit under the 4-Lot Contract.
190.
With respect to the provision of spare parts, the Claimant states that evidence referred to in Mr. Mercier’s Witness Statement does not mention the provision of any ASR-12 spare parts which is considered by the Claimant to be a main component of the ATC System.102
191.
With respect to the Witness Statement of Mr. Kenneth Leidy, who did not appear as a witness, the Claimant notes that the evidence referred to by Mr. Leidy in support of his statement that factory acceptance tests and installation was conducted at each site for the voice communication switching systems that Mr. Leidy helped design for the Respondent.103 According to the Claimant, this exhibit provides for the installation testing procedure and does not bear the signature of the Claimant’s representatives.
192.
Mr. Leidy also states that he "was informed" that the Respondent’s contractor ORASCOM was delayed as a result of finding land mines in the process of mapping out the fiber optic link.104 The Claimant states that this demonstrates that the witness had no direct and personal knowledge of these events.
193.
With respect to the Witness Statement of Mr. Patrick Kelly, who did not appear as a witness, the Claimant states that this witness relates information which is not to his personal knowledge. By using the past tense, the witness is speaking of events that took place likely before he started working for the Respondent on the 4-Lot Contract. According to the Claimant, any information about the events which took place prior to Mr. Leidy working on the Egyptian airports is not within his direct and personal knowledge and should be disregarded. Moreover, the Claimant states that the witness submitted no documents in support of his Witness Statement and that all of his statements are therefore valueless.
194.
With respect to the Witness Statement of Mr. Cyril Morris, who did not appear as a witness, the Claimant notes that Mr. Morris states that he worked with Primary Engineer Nagy Youssef Samuel while the Primary Engineer for the Claimant was Youssef Abdelmaqsoud Salem.105
195.
In reference to Mr. Morris’ statement that he attended meetings with Engineer Youssef and Engineer Adalat regarding voltage regulators, the witness refers to letters dated 17 July 2002, 25 July 2002 and 21 July 2002.106 Engineer Youssef had already retired by this time and was no longer working for the Claimant. Moreover, the letters are addressed to General Assad Darwish, Engineer Sabry Aly Hussein and Engineer Magdy Abass, all working for the Claimant. Neither Engineer Adalat nor Engineer Youssef is mentioned in any of this correspondence.
196.
Mr. Morris states that "NANSC complained that the El Arish generator batteries did not hold their charge. Indeed, the El Arish generator battery had been improperly stored in a container in the direct sunlight at the Cairo Air Nagivation Centre ("CANC") for almost 6-months due to NANCS's delays in equipment release [...] the exposure to the elements likely diminished the generator batteries performance, thereby resulting in problems overall in the generator."107 The Claimant alleges that this statement is inaccurate. If the batteries were stored in the CANC, then they must have already been released from customs at the Alexandria Port. According to the minutes of in-site inspection and receipt of containers by the Respondent,108 and the Respondent’s letter of 24 February 2001,109 the Respondent received the 4-Lot Contract equipment containers from the Claimant on 29 March 2001. According to the Claimant, the said generators and its batteries were in the possession of the Respondent from 29 March 2001 until its installation seven months later on 13 November 200L110 Finally, according to the Claimant, the Respondent changed the generator batteries on numerous occasions and yet the problems with the generators persisted.111 As a result, the batteries were not the cause of the generator failures.
197.
The Claimant also notes that Mr. Martin Simoni wrote on behalf of the Respondent on 6 March 2002 that "the pattern of failures is well within the normal range during the system phase of operation"112 which, according to the Claimant, contradicts Mr. Morris’ opinion that the failure in generator testing was due to the Claimant’s faulty testing.113
198.
In its second Post-Hearing Brief, the Claimant makes various submissions with respect to points of law.114 According to the Claimant, the laws of the United Nations Convention on Contracts for the International Sale of Goods is to be applied only when Egyptian laws are silent or insufficient to resolve a legal question. This follows from the Egyptian laws being mentioned first at Article 30 of the 3-Lot Contract and the Commercial Laws of the United Nations being mentioned second.115
199.
The Claimant acknowledges that Article 210 of the Egyptian Civil Code allows for the Tribunal to deem contractual works to be accepted by a co-contractant. The Claimant submits that this can only be done if the evidence leads to this conclusion.
200.
Article 25 of the 3-Lot Contract specifies the applicable period of guarantee following provisional acceptance. The Claimant states that this article must be interpreted strictly such that the contracted works must "be free from defect in material and workmanship for a period f 12 months after the provisional acceptance, as evidenced by the signature by ECAA on the provisional acceptance document [...]."116 The Claimant states that there was never a 12-month period that was free from defect after provisional acceptance so as to allow the Respondent to claim the fulfilment of this obligation.
201.
The Claimant rejects the Respondent’s reliance on Article 148 of the Egyptian Civil Code, which article provides that a contract must be performed in compliance with the requirements of good faith. The Claimant submits that good faith has no application to the present dispute.
202.
In response to the Respondent’s position that a simple offer does not create enforceable obligations under Egyptian law, the Claimant states that in the circumstances an offer was made by the Respondent and accepted by the Claimant.117 According to the Claimant, the acceptance was identical to the offer made by the Respondent in March 1997.
203.
The Claimant states that there is no disagreement between the Parties with respect to the rule that an amendment of a contract can be implied or express. The Claimant states that there was no agreement, either express or implied, for an amendment of the contracts and that Article 90 of the Egyptian Civil Code is therefore irrelevant
204.
The Claimant denies the Respondent’s claim of breach contract and good faith resulting from the Claimant drawing down the Respondent’s 4-Lot Contract performance bond. The Claimant states that there is no evidence of a promise made to the Respondent not to draw down the performance bond and that the concept of misuse of right in Egyptian law is irrelevant to this argument.
205.
The Claimant states that Article 35 of the 3-Lot Contract which defines force majeure does not provide the Respondent with any right to claim damages, but rather only holds the Respondent free from liability in the event of force majeure. The Claimant furthermore alleges that force majeure cannot be claimed without a factual basis.118 The Claimant submits that the acts referred to by the Respondent are "normal" acts within the course of the execution of the contract.119

B. THE RESPONDENT’S POSITION

206.
The Respondent’s evidence consists of 340 documentary exhibits, thirteen Witness Statements and six viva voce witness testimonies.
207.
As noted above, the following witnesses appeared before the Tribunal on behalf of the Respondent during the Hearing: (i) Mr. Robert J. Warns; (ii) Mr. Kirby A. Neal; (iii) Mr. Donald C. Wilhelm Jr.; (iv) Mr. Paul Mason; (v) Mr. Martin Simoni; and (vi) Mr. John F. Murray.120
208.
Mr. Kirby Neal, the Egyptian in-country Northrop Grumman ATC System Program Manager between 2000 and 2003, provided evidence with respect to the numerous tests which were conducted on each of the 3-Lot Contract and 4-Lot Contract airport sites prior to their delivery to the Claimant. In particular, Mr. Neal testified that a factory acceptance test ("FAT") was first conducted on all components in the location in which they were built. The FATs were witnessed by members of the Claimant who would travel to the factory in the United States and approve the equipment prior to its shipment to Egypt. Once the equipment arrived in Egypt, it was sent to the site and installation tests were conducted throughout the installation. Following all installation tests, an integration test would be conducted to ensure that all equipment worked together. Following the integration test, the Respondent would conduct a site acceptance test in the presence of the Claimant’s representative. The Claimant’s representative would be a subject matter expert and would approve and sign the site acceptance test. Mr. Neal testified that site acceptance tests were performed at every site under the 3-Lot and 4-Lot Contracts. Finally, following the site acceptance test which evidenced all the individual components working together, a flight test was conducted in which the Claimant provided a test aircraft that followed a usual flight. Mr. Neal testified that at the time of the site acceptance tests, the site was fully operational.121
209.
Mr. Neal identified and explained the site acceptance test documents submitted in evidence.122 Mr. Neal testified that site acceptance tests were signed for each of the air space management systems under the 3-Lot and 4-Lot Contracts.123
210.
Following the site acceptance test and flight test, the Claimant was contractually required to issue provisional acceptance. Mr. Neal testified that provisional acceptance would be a period of time in which the Claimant would use the site for one year and benefit from a one-year warranty period.124
211.
Mr. Neal provided evidence to the effect that provisional acceptance was finally granted by the Claimant for Sharm El Sheikh on 28 September 2000, for Luxor in December 2000 and for Hurghada in June 2001.125
212.
Mr. Paul Mason, the Respondent’s Lead System Engineer for the Egyptian air traffic control systems, provided similar evidence with respect to the successful completion of all required tests at all airport sites under both the 3-Lot and 4-Lot Contracts.126
213.
Mr. Neal also testified to the MOU signed between Chairman Kato for the Claimant and Mr. Wilhelm for the Respondent. According to the MOU, the Claimant was to provide provisional acceptance by 30 September 2000.127 Moreover, the Parties agreed that the Claimant would pay all outstanding 3-Lot Contract invoices following the Respondent’s re-submission of these invoices. Mr. Neal testified to the fact that he sent all outstanding 3-Lot Contract invoices the day after the signature of the MOU, as evidenced by his letter of 30 August 2000.128
214.
Following the conclusion of the MOU on 29 August 2000,129 the Claimant failed to pay the outstanding invoices under the 3-Lot Contract.130
215.
According to the Respondent, the Parties engaged in further negotiations which culminated in the signature of the 3-Lot Settlement Agreement on 10 November 2001.131 In his Witness Statement, Mr. Kirby Neal stated the following with respect to the conclusion of the 3-Lot Settlement Agreement:

29. In the weeks following the PMR, Mr. Simoni, Chairman Raafat, and I, among others, reached a mutual agreement on behalf of the parties to cancel all remaining 3-Lot issues previously identified at the PMR. NANSC agreed to waive approximately $2.3 million worth of potential claims, and Northrop Grumman agreed to waive approximately $4.2 million worth of potential claims. At the time, I understood that the parties were fully resolving the 3-Lot effort.

30. On November 10, 2001, Mr. Simoni and I signed the 3-Lot Settlement Agreement on behalf of Northrop Grumman. At the time of execution, the parties agreed that the 3-Lot Contract was concluded (with the exception of any warranty items already ordered). The parties agreed that NANSC would provide the Final Acceptance Certificate for all the sites after execution of the 3-Lot Settlement Agreement. In addition, the parties waived all future 3-Lot related claims, and NANSC agreed to pay all outstanding invoices as well as custom duties taxes previously paid by Northrop Grumman. After Mr. Simoni and I signed the 3-Lot Agreement, Chairman Raafat insisted that all of his lead engineers sign the agreement. Once this was complete, Chairman Raafat signed the agreement and gave us one of the two originals.132

216.
Mr. Donald Wilhelm, Vice President of Northrop Grumman’s International Command and Security Systems, testified with respect to the 3-Lot. Settlement Agreement.133 Mr. Wilhelm stated that following the PMR meeting of September 2000, the Parties worked diligently to resolve all outstanding issues under the 3-Lot Contract. General Kato for the Claimant and Mr. Wilhelm for the Respondent met in order to come to a final agreement on the 3-Lot Contract.134
217.
Mr. Wilhelm addressed in detail the provisions of the 3-Lot Settlement Agreement. Mr. Wilhelm also testified to the fact that despite reiterating its undertaking to pay the Respondent for the invoices under the 3-Lot Contract, the Claimant had yet to make full payment for the Respondent’s work under the 3-Lot Contract.135
218.
According to Mr. Wilhelm, General Kato had complete authority to sign the 3-Lot Settlement Agreement on behalf of the Claimant, stating that General Kato was in charge of the entire operation on behalf of the Claimant.136
219.
Mr. Martin Simoni, Program Manager for the Egyptian air traffic control program between April 2000 and June 2002, provided evidence with respect to the Claimant’s signature of the Provisional Acceptance Certificates for the airports under the 4-Lot Contract.137 Mr. Simoni testified that when signed by both Parties, provisional acceptance meant that all contractual obligations were complete to the satisfaction of both Parties in accordance with the contract. Mr. Simoni further testified to the absence of any annotations of outstanding requests or issues on the provisional acceptance certificates for the 4-Lot Contract sites.138
220.
Mr. Wilhelm provided evidence with respect to the Respondent’s claim for delay and disruption experienced under the 4-Lot Contract, as well as his preparation of a diagram reflecting these delays.139 Mr. Wilhelm testified that a significant delay was incurred due to the Claimant’s failure to deposit the contractually required down payment and performance guarantee. According to Mr. Wilhelm, the Respondent was continuously being reassured by representatives of the Claimant that the contract would be effective at any moment.140 While the 4-Lot Contract provided for the provision of the guarantee on or before 15 November 1998, the Claimant did not complete its obligations in this regard until 1 June 1999.141
221.
Mr. Wilhelm also testified with respect to delays in site selection and the Claimant’s request for multiple site location surveys and layouts. While in actuality the Respondent suffered a period of approximately 22 months of delay, one of the things that Mr. Wilhelm undertook was to lay out all the delay periods and find overlaps between the delays to reduce the claim for delays to a total of 15 months.142
222.
During his cross-examination, Mr. Wilhelm clarified that consistent with his stated position in his letter of 4 February 2001,143 the Claimant was responsible for the majority of the delay associated with the 4-Lot Contract but the Respondent was responsible for the majority of the delays associated with the 3-Lot Contract.144
223.
With respect to loss of concurrency in the Respondent’s performance of the 3-Lot Contract and the 4-Lot Contract, Mr. Wilhelm’s letter of 24 May 2000, states that the Claimant refused to provide parallel support to both contracts on a concurrent basis:

Meetings were held today with Northrop Grumman personnel (Kirby Neal, John Murray, General Meawi and John Jackson) and ECAA Personnel (General Bagoury, Eng. Nagi Samual and Eng. Youssef Abdelmaksoud) to finalize parallel support for the 3-lot and 4-Lot program activities.

ECAA personnel at the meeting stated that they would not provide parallel support for the 3-lot and 4-lot programs. Their intentions as stated were to complete the 3-lot sites prior to providing any concurrent effort for the 4-lot Factory Acceptance Testing (FAT) activities. They indicated a desire to slip the planned FAT for radar testing scheduled to begin on May 30, 2000 to mid July. [...]145

224.
Mr. Murray, Director of Business Management for the Respondent, testified that the Claimant refused to provide the personnel in support of activities of both the 3-Lot and 4-Lot Contracts. The Respondent had however, priced the 4-Lot Contract assuming that the 3-Lot Contract and 4-Lot Contract could be executed on a concurrent basis. The Claimant, in failing to pay the down payment and performance guarantee within the contractually required 60 days from the signature of the contract, denied the Respondent the ability to begin execution of the 4-Lot Contract on a timely basis. Mr. Murray testified that the Claimant was aware that the pricing of the 4-Lot Contract was made assuming concurrency.146
225.
During his cross-examination by the Claimant, Mr. Wilhelm referred to the Claimant’s reasons for its non-payment of various invoices submitted by the Respondent, stating that General Kato told him on a number of occasions "that there was no money to pay" the Respondent.147
226.
With respect to the Claimant’s draw down of the Respondent’s performance bond on 2 January 2003 in the amount of US$3,362,197, the evidence includes the Claimant’s instructions to Scotiabank Inc. by letter of 2 January 2003148 and Mr. Wilhelm’s correspondence to His Excellency Air Marshal Ahmed Shafik also dated 2 January 2003.149 In his witness statement, Mr. Wilhelm said:

After explicitly promising not to do so in a meeting attended by myself in December 2002, NANSC drew down Northrop Grumman’s performance bond on January 2, 2003 in the amount of $3,362,000. On that same day, I wrote to NANSC’s Minister of Civil Aviation, Air Marshal Ahmed Shafik, asking him to assist Northrop Grumman recoup the draw down amount. After NANSC refused to pay back the draw down amount, I traveled to Egypt to meet directly with NANSC representatives, including Chairman Ibrahim A. Manna. Although NANSC admitted that it had agreed that it would not draw down the bond, nevertheless they were unwilling to pay it back. This is another example of NANSC’s bad faith in its dealings with Northrop Grumman arising directly out of funding shortages due to the mismanagement of program funds.150

227.
Mr. Wilhelm testified at the Hearing that during a meeting in December 2002, the Claimant assured him that they would not draw down the performance bond issued by the Respondent. On 2 January 2003, Mr. Wilhelm discovered that the Claimant drew down the performance bond in its entirety. Mr. Wilhelm wrote a letter on the same day to His Excellency Air Marshal Ahmed Shafik, then Minister of Civil Aviation, complaining about the draw down of the Respondent’s bond and requesting his immediate assistance. According to Mr. Wilhelm, there was no basis for the draw down of the Respondent’s guarantee, especially in light of the fact that the Claimant had already issued provisional acceptance under all airport sites, and the Parties were in the warranty period of the contract.151
228.
With respect to the Claimant’s comments on the Respondent’s Witness Statements, the Respondent replies in general terms as follows:

53. Claimant’s fifty-eight page "rebuttal" of Northrop Grumman’s October 15, 2009 witness statements, initially filed and stricken from the record in November 2009, amounts to nitpicking and fails to rebut any of Northrop Grumman’s defences or counterclaims. It is readily apparent that Claimant’s witness-by-witness response was prepared long before the Hearing and relates not at all to the live testimony. Claimant’s sole focus on the written witness statements is an admission that it utterly failed in its cross-examination of Northrop Grumman’s witnesses at the Hearing. [...]

55. Claimant’s comments on Northrop Grumman’s witness statements generally fall into three categories: (1) minor points on Northrop Grumman’s witnesses’ recollection of particular dates more than ten years old; (2) false issues raised by Claimant’s misinterpretation of a witness statement; (3) minor errors that were acknowledged and corrected during the witnesses’ live testimonies which Claimant studiously ignored in its brief. None of Claimant’s comments goes to the substance of Northrop Grumman’s witnesses that (1) all seven ATC Systems were successfully installed and (2) at considerable delay and cost increase caused by Claimant. [...]152

229.
The Respondent also provided detailed responses to each of the Claimant’s comments in an annex to its Post-Hearing Brief.153

VIII. ORAL EVIDENCE

230.
The Tribunal recalls that the Parties initially agreed on the procedures for the conduct of the present arbitration. Procedural Order No. 1 of 28 October 2008 provided for the simultaneous submission of Witness Statements by the Parties as well as the simultaneous submission of rebuttal Witness Statements. Witnesses were to testify before the Tribunal at a hearing on the merits.
231.
The Claimant however chose to submit no witness statements and called no witness before the Tribunal at the Hearing. The Claimant chose instead to rely on extensive documentary evidence in support of its numerous claims, all of which has been taken into consideration by the Tribunal.
232.
The Respondent submitted thirteen Witness Statements in addition to extensive written evidence. Six witnesses appeared before the Tribunal at the Hearing on behalf of the Respondent. Before analysing each of the Parties’ respective claims, the Tribunal considers it important to review the testimonial evidence of certain of these witnesses.154
233.
Mr. Robert Warns was responsible for negotiating the 3-Lot Contract on behalf of the Respondent. Mr. Warns testified as follows regarding the parties’ negotiation of the Bills of Quantity:

MR WARNS: Appendix A is a list of the equipment that was going to be provided under the 3-Lot contract at a summary level.

MR O'BRIEN: When was this document submitted to NANSC?

MR WARNS: At the time of contract signing.

MR O’BRIEN: May 1997?

MR WARNS: That's correct.

MR O'BRIEN: Let me jump forward to the period of June 1998. Would you go to that exhibit, please, this is R-31. What is this document?

MR WARNS; This is the detailed BOQ which takes the simplified version, at the top it says it's an ASR-12 radar, and what comprises of that radar and the pieces that will be delivered that make up that radar.

MR O’BRIEN: So in May of 1997, you had one BOQ?

MR WARNS: That's correct.

MR O'BRIEN: You described for us the process where you were negotiating with NANSC through technical meetings and the requirements are being applied, is that correct?

MR WARNS: That’s correct.

MR O'BRIEN: So, does this BOQ capture those changes?

MR WARNS; Yes, it did.

MR O'BRIEN: This again this BOQ was submitted in what time period?

MR WARNS: This was submitted in October of 1998.

234.
Mr. Kirby Neal, the Respondent’s Egyptian in-country ATC System Program Manager between 2000 and 2003, provided the following evidence with respect to the approval process of the work performed under the 3-Lot and 4-Lot Contracts:

MR O’BRIEN: Did Northrop Grumman complete the ATC installation for the 3 and 4-Lots during your time?

MR NEAL: Yes, we did.

MR O’BRIEN: Were there any tests that were required to be performed?

MR NEAL: There were several tests.

MR O’BRIEN: Let me ask, for the Tribunal’s purposes, could you please start from the first test and walk through each of the tests?

MR NEAL: The first test was the factory acceptance test, which was done on individual components, such as the radar or the generator at the factory, where they were built. This was witnessed by members of NANSC, who would travel to the factory.

The factory acceptance test was required to be complete in order to get permission to ship the equipment into country. Once the equipment arrived in country, it was sent to the site and we would begin installation and check out. The installation and check out; we would inventory the equipment, we would install it by Northrop Grumman engineers, with the help of NANSC engineers. It would be thoroughly installed and tested.

As you know, the three major components are communications, radar and AMS. Each of these would be checked out thoroughly and then there would be an integration test to ensure that they would work together. Following the integration test, we would do a site acceptance test.

The site acceptance test was a test that had been previously approved by NANSC and it would thoroughly check out each one of the major components and it was witnessed by a subject matter expert from NANSC and the test was signed.

[...]

The site acceptance tests were performed on every single major component at every single site.

THE PRESIDING ARBITRATOR: And it was preceded by the factory acceptance test, is that correct?

MR NEAL: That is right. The factory acceptance test was for NANSC to ensure that what they were buying - because they would demonstrate one of the actual items that was being shipped over here. If they went to a factory for the radar, that radar was the radar that would come to Egypt, it was not a sample.

THE PRESIDING ARBITRATOR: I understand.

MR O’BRIEN: To be clear, Mr Neal, after the factory acceptance test, you mentioned the installation and check-out test?

MR NEAL: Right. The factory acceptance test preceded the shipment of the equipment, the installation and check out would thoroughly check out the operation to prepare for the site acceptance test.

The site acceptance test was a formal test witnessed by NANSC, signed off by NANSC. Then, following the site acceptance test that showed that all of the individual components would work together, the site acceptance test was followed by the flight test.

MR O’BRIEN: What happens in the flight test stage?

MR NEAL: The flight test involves NANSC providing a test aircraft that follows - again it is a test that is previously approved and it follows a particular set of tests that are checked out to ensure that the entire system works together.

MR O’BRIEN: You also mentioned the site acceptance test. Is the site operational at the site acceptance test stage?

MR NEAL: Yes.

MR O’BRIEN: Was it incumbent on Northrop Grumman to get a site acceptance test certificate signed by NANSC?

MR NEAL: Yes.

MR O’ BRIEN: Did you get those?

MR NEAL: Yes, we did.

MR O’BRIEN: Could you please look at exhibit 5, Mr Chairman. Can you describe for the Tribunal what this document is?

MR NEAL: This is the site acceptance test cover sheet for the Airspace Management System at Sharm El Sheikh.

MR O’BRIEN: If I could turn your attention to page 11, can you describe to the Tribunal what is here, within this site acceptance test document, what kinds of items are being discussed on this page?

MR NEAL: As you can see at each step, they would perform a particular step that was part of the function of the AMS system and they would check it off if the results of that test met what the expected results were. It would pass or fail.

MR O’BRIEN: If we could turn to page 12, please.

MR NEAL: Again, it is basically a checklist of all of the functions of the AMS to ensure that it is performing everything that it is supposed to perform.

MR O’BRIEN: Let me show you two other pages, 13 and 14. What are these?

MR NEAL: Additional checklists showing that it performed, for example, a display control and the standby status window.

MR O’BRIEN: Go to the signature page of exhibit R-5, please, if you could blow up the whole page.

THE PRESIDING ARBITRATOR: That is page 71?

MR O’BRIEN: I believe that’s correct. Yes. It is 71, yes, sir.

MR NEAL: The Northrop Grumman representative was our engineer who performed the test and Engineer Shoukry was the NANSC subject matter expert for the AMS. He would witness the test and sign off that it had been completed successfully.

MR O’BRIEN: So, is this the signed site acceptance certificate for Sharm El Sheikh?

MR NEAL: That is correct.

MR O’BRIEN: Did you obtain SAT site acceptance test certificates for all 3-Lot sites?

MR NEAL: Yes. There were two copies made; one we would deliver to NANSC and one we would keep in our site manual.

[...]

MR O’BRIEN: Was NANSC using the system at this point?

MR NEAL: Well, remember the site acceptance test is a prerequisite for the flight test. The flight test ensures that the entire system works together and then following flight tests, there was nothing left but provisional acceptance in which that is when the system is completely ready to be used.

The provisional acceptance would be a period of time in which NANSC would use the site for a year and we would have a one-year warranty period. Immediately following delivery of the flight test results, we would submit a certificate to NANSC for provisional acceptance.

MR O’BRIEN: So did you get provisional acceptance on the 3-Lot sites?

MR NEAL: No, we did not.

MR O’BRIEN: But that was required after the completion of all testing, right?

MR NEAL: The flight test proved that the site was operational and ready to be used. NANSC used the site, but they still did not give us - they did not sign a provisional acceptance certificate.

MR O’BRIEN: Do you know why?

MR NEAL: No, we don’t.155

235.
Mr. Paul Mason, Lead Systems Engineer for the Egyptian Air Traffic Control at Northrop Grumman, provided similar evidence with respect to the successful completion of all required tests under the Parties’ contracts:

MR PETERSON: To your knowledge, did Northrop Grumman meet all Air Traffic Control program requirements?

MR MASON: Yes.

MR PETERSON: Where was this verified?

MR MASON: It was verified throughout the testing program, mainly the flight tests that were conducted. All the systems were run against a standard FA flight test verifying the performance of the system met the standards.156

236.
Following the signature of the Parties’ MOU on 29 August 2000.157 the Claimant did not pay the Respondent’s outstanding invoices under the 3-Lot Contract as had been conveyed in the MOU.158 Mr. Neal testified in this respect as follows:

MR NEAL: They agreed that they would pay the outstanding 3-Lot invoices that had not been paid following our resubmittal of the invoices.

MR O’BRIEN: Northrop Grumman was required to resubmit the invoices?

MR NEAL: Yes.

MR O’BRIEN: Did you do that?

MR NEAL: Yes, we did. We did that the next day.

MR O’BRIEN: I want to point you to exhibit R-293. If you could tell the Tribunal, what is this document?

MR NEAL: This is a covering letter that I sent along with the invoices when I submitted them the next day after the MOU was signed. These were the open 3-Lot invoices that had not been paid.

MR O’BRIEN: So again NANSC required you to resubmit the invoices and you did so the next day?

MR NEAL: Yes.

MR O’BRIEN: Did NANSC pay you after you resubmitted those invoices?

MR NEAL: No.

MR O’BRIEN: Were you able to get provisional acceptance after the memorandum of understanding?

MR NEAL: The provisional acceptance at Sharm El Sheikh was granted 28 September. We did not receive provisional acceptance at Luxor until December and they did not sign the certificate for Hurghada until the following June 2001.159

237.
The Parties engaged in extensive negotiations in order to resolve various issues under the 3-Lot and 4-Lot Contracts. Mr. Donald Wilhelm, Vice President of Northrop Grumman’s International Command and Security Systems, testified as follows with respect to the negotiation and conclusion of the 3-Lot Settlement Agreement:

MR KAVANAUGH: I would like to direct your attention next to a document which is exhibit R-15 and ask you if you can identify that document for me, please.

[Exhibit R-15 displayed]

MR WILHELM: I can, sir. It is a 10 November 2001 letter, and it represents the final 3-Lot agreement between Northrop Grumman and NANSC.

MR KAVANAUGH: What was your involvement in getting this document executed?

MR WILHELM: Subsequent to the PMR in September 2000, we worked very diligently to resolve all the issues that could be resolved. We still had some open items relative to equitable adjustments that we were asserting, and we directed our teams, General Kato and myself, to meet in country and attempt to resolve all the open issues. This document reflects the final agreement on the 3-Lot and the resolution of those issues.

MR KAVANAUGH: Looking at the first page of this document and the paragraphs 1,2 and 3, can just summarise [sic] for me the major items that you were attempting to resolve?

MR WILHELM: Paragraph 1 states that NANSC agrees to waive any liquidated damages under the contract associated with the 3-Lot. Liquidated damages was their remedy for any deficiency on Northrop Grumman's part in the contract. So, they figured number 1 was to waive their liquidated damages if any.

Number 2, they agreed to waive potential claims that they had asserted for certain specifics items.

Number 3, we agreed to waive specific claims associated with similar and specific claims.

Number 4, NANSC agreed to pay the customs duties and taxes that they owed us on equipment that we had delivered and to make proper payment to us for the remaining unpaid invoices under the 3-Lot program.

MR KAVANAUGH: The last full paragraph before the signature page, what was your understanding of any additional work that might be required, how any additional work under the 3-Lot contract would be acquired?

MR WILHELM: The language that we agreed upon, after considerable discussion, was that if any work was required by the contract, any remaining work was required by the contract, we would perform that work, but if there was a request for any additional work, apart from the contract requirements, then Northrop Grumman would submit a proposal that was appropriate for the work being requested and the intent of being paid for that additional effort.

MR KAVANAUGH: Turn to page 2 of this document. I believe that you have already talked about these. Can you just describe what these two columns of items represent?

MR WILHELM: Sure. The lefthand column entitled NANSC represented the claims, requests for equitable adjustment, that they asserted against Northrop Grumman, and they totaled USD 2,379,641. The righthand column is the NGOSCO list of requests for an equitable adjustment that they had to resolve and they totaled USD 4,220,539.

Then there was also some agreed upon scope that had not yet been paid, or a portion of it had been paid, some of it had not been paid relative to changes in tower height, and we also had taxes and duties that were paid.

MR KAVANAUGH: So, at the time that this was signed, did you feel as though it was finally resolved with the exception of those two payment issues, everything that was to be done under the 3-Lot?

MR WILHELM: Actually, NANSC required us. prior to the execution of this agreement, to have performed all the work specified in this agreement. In other words, they refused to sign it until we had demonstrated we had already done the work. So the work in here that was called out was not prospective in nature on our side. The only prospective portion of this agreement, the only thing that remained open, after the parties had each waived their claims against each other, was really to receive the final payments that were due to us for customs fees, dues and invoices.

MR KAVANAUGH: Were those paid in accordance with this agreement?

MR WILHELM: No.

MR KAVANAUGH: Have they been paid to this day?

MR WILHELM: No.160

238.
Mr. Wilhelm testified as follows with respect to Chairman Kato’s authority to conclude the 3-Lot Settlement Agreement on behalf of the Claimant:

THE PRESIDING ARBITRATOR: Did he represent to you that he had authority to negotiate with you a settlement of the 3-Lot programme?

MR WILHELM: Absolutely, he absolutely had that authority. The chairman at that time was a Chairman Raafat that worked for General Kato and General Kato was in charge of that entire effort and he was the one that interfaced with concerning the details that were necessary in order to achieve that agreement.

THE PRESIDING ARBITRATOR: Did he at any time say to you that the memorandum of understanding or the settlement agreement were not being respected, not being adhered to by NANSC because he had lost any of his authority?

MR WILHELM: Are you referring to the 3-Lot, sir?

THE PRESIDING ARBITRATOR: Yes.

MR WILHELM: No, he never repudiated the 3-Lot agreement. We always considered it the final agreement, he always stood by it. There was never any deviation on his part of the 3-Lot agreement.

THE PRESIDING ARBITRATOR: In answer to question from Mr Kavanaugh, and I didn't quite understand the full answer, you said: One day he said "I can direct people to do things but I can't make them do it", or words to that effect.

Could you expand a little on that?

MR WILHELM: General Kato felt his job was to provide the overall leadership to NANSC and ECAA, depending on what job he held at what time.

When I would complain about the fact in this series of MOUs that were signed, starting in August of 2000 and ending with the November 2001 MOU that was signed on the 3-Lot representing the final agreement - when we would talk about the fact that these interim agreements and going back to the August 2000 agreement were not upheld and were not performed by NANSC he would say to me, "Mr Wilhelm, I signed the document. It is up to my people to make these things happen. I cannot make the individual items happen. They have to make them happen." And that was true.

There was a significant disconnect between the direction of the senior management in the execution of written agreements and what happened and he would simply explain to me, "I can’t go out and make these items that are agreed to in the documents happen. My people have to do that and if my people don't do that, then we will, go back and we will create another agreement to try and make it happen."

We were very patient with that process because normally in our country when you sign a document, you do it. We don’t have this evolutionary non-performance that you see here.

So when we signed these documents, I guarantee you on our side of the equation we were executing them.161

239.
With respect to the Claimant’s contractual requirements following the receipt of

Provisional Acceptance of the Respondent’s work and completion of the one year warranty period, Mr. Wilhelm testified as follows:

MR KAVANAUGH: Was it your understanding, I think you testified earlier, that at end of the guarantee period that you would receive, as a matter of course, final acceptance certificates?

MR WILHELM: That is all it was. It was perfunctory. As soon as you got the provisional acceptance, the warranty period started. The warranty ended at the end of 12 months and at the end of 12 months your final acceptance took place.

What we experienced was an inordinate amount of delay in getting provisional acceptance because everybody understood that, when provisional acceptance took place, the warranty started.

So, we agreed, at several points of time, completion of provisional acceptance for the one-month shadow period where NANSC could test the system, use the system, make sure that it met all its requirements. In many, many cases those one-month periods stretched into five, seven, eight months, thereby extending our warranty and extending our obligations for warranty, for which we have not really claimed in this submittal to this Tribunal.

MR KAVANAUGH: Is it your belief that you, Northrop, delivered all seven sites operational and in accordance with the 20 specifications?

MR WILHELM: It is my belief and conviction that everybody agreed that we had done that.

MR KAVANAUGH: Therefore, have you gotten final acceptance certificates on any of the seven sites as we sit here today?

MR WILHELM: No, sir.162

240.
With respect to the 4-Lot Contract, Mr. Martin Simoni, program manager for the Egyptian air traffic control program between April 2000 and June 2002, testified regarding the signature of Provisional Acceptance Certificates:

MR GREEN: I would now like to introduce exhibit R-24. Could you look at these, there are four of them, and identify what they are for us, Mr Simoni?

[Exhibit R-24 displayed]

MR SIMONI: The one on the screen is the provisional certificate for Taba.

MR GREEN: The next one?

MR SIMONI: The next document is the 9 provisional certificate for El Arish.

MR GREEN: And the next one?

MR SIMONI: The next one is the provisional certificate for Borg EL-Arab.

MR GREEN: And the final one?

MR SIMONI: The final one is the provisional certificate for Aswan.

MR GREEN: Mr Simoni, under the contract, what did these provisional certificates mean?

MR SIMONI: When signed by both parties it meant that all contractual items were completed in accordance with the contract to include installation, testing, spares, logistics, training, so forth and so on, and it was closure for provisional acceptance for the sites.

MR GREEN: What remained after the signing of the 4-Lot provisional acceptance?

MR SIMONI: The only thing that remained was the one-year warranty period for the sites.163

241.
Mr. Wilhelm testified with respect to the delay and disruption experienced by the Respondent during the performance of the 4-Lot Contract:

MR KAVANAUGH: Aside from the concurrency, were you also suffering other delays under the 4-Lot program?

MR WILHELM: We were. We actually had a significant set of delays in the program. I already mentioned the delay in the effectivity date of the contract. The real issue with that delay and the real issue with the subsequent delays was that we were in constant contact with NANSC and we were trying to understand when the contract would be effective because we had the people associated with performance of the contract ready to perform the contract, they did not perform the contract, and we were repeatedly assured by NANSC that the contract would be effective at any moment.

So, the first delay was delay in contract effectivity.

We signed the contract with the expectation that we were going to get the money associated with the 4-Lot to make it effective in late 1997. Unfortunately, when the money did not come and we did not get a stand down relative to a partial stop work on the program, we continued to anticipate that the money would be coming any day.

It was not until the middle of the December when we held another PMR, December of 1998, it was disclosed to us that NANSC had not yet received the funding from USAid. However, they guaranteed they would receive the funding by the end of December and we would have the effective contract. That is in the minutes of that meeting. Unfortunately, again, the promise was not kept. The funds were not provided until May of 1999.

MR KAVANAUGH: Was this funding requirement actually a contract provision, a contract requirement?

MR WILHELM: It was. The contract extension for the 4-Lot required the downpayment to be made 60 days after the contract extension was signed.

MR KAVANAUGH: I am going to direct your attention, in order to facilitate explaining the other delays you have experienced, to exhibit R-323 and ask you to idenfy that.

[Exhibit R-323 displayed]

MR WILHELM: This is my chart. Financial made this chart a number of years ago. The top line of this chart represents the contract as the contract was signed and the plan to execute the contract extension for the 4-Lot.

The second line reflects the delay in the downpayment of 6.5 months. It was supposed to be there 11/98. It actually occurred on 6/99. By the way, it is important to note that that extension of the L/C was paid for by NANSC, who fully recognised that they were responsible for that delay and paid the extension.

Then, as I already mentioned, in one of the other letters NANSC refused to support the 4-Lot activity in significant nature because of the fact that the 3-Lot had not yet been completed. So, as a consequence, we suffered 2 unplanned delays in the accomplishment of the FAT attendance, approval of generators that had changed because manufacturers no longer built them.

Site selection: There was a great deal of vacillation by NANSC in terms of sites. They were unsure of where they wanted to put sites, and we had to go through multiple site layouts, multiple site location surveys, and that delayed the program as well as some approvals associated with things like fire alarms. It was actually about a 22-month period of delay.

One of the things that I did was I laid out all the delays and then I looked for the overlap of delays and we reduced the delay period from 22 months to 15 months in our request for equitable adjustment. I believe that to be accurate.

The process that I use is: I lay out the schedule, then I lay out our costs against the schedule to see if the costs match the periods under which we experienced impact. If we experienced impact and the costs do not line up, then we do not have a basis for a claim. So thecosts have to be there and marry up with the periods of delay in order for us to claim compensation. So, we did that with regard to those delays.

Once the 3-Lot was complete, things moved along. However, we were in essence in an accelerated schedule because NANSC refused to relax the schedule of the program that was remaining. We had constructive acceleration where the front end of the schedule we were not able to perform because we could not get their support, and we then had to do all the work in a much shorter period, costing us a lot more with regard to people and material, a lot more inefficiencies.

When we finally got through that period, we delivered all the equipment, and we have recovered a good deal of this program scheduling, I might add, which saved everybody a lot of money.

But, unfortunately, NANSC did not have the money to pay for the equipment to come out of customs in Egypt. So, once again, we were assured, on virtually a daily basis, that they would pay the customs fees to release the equipment.

Instead, the equipment sat in customs for a period of approximately six months, and, finally, as we could not handle the impact to the overall program any longer, we paid the fees ourselves in order to get the equipment out, even though it was a contractual responsibility of NANSC to do so.164

242.
Mr. Neal provided a different explanation for the delays experienced under the 4-Lot Contract:

DR EL-AWA: In paragraph 35 of your witness statement you said your engineers had started installation in the follow-up sites in April 2001. The first provisional acceptance occurred or was signed on 19 March 2002. Do you have any explanation for this lengthy period, from April 2001-March 2002, for the installation of the Lot?

MR NEAL: Yes.

DR EL-AWA: As you remember, the original period in the contract is three months. Now, this took about a year.

MR NEAL: The problem with the 4-Lot was 21 that the equipment arrived in Egypt in December of 2000 at their request. However, it was not released from Customs until the end of April of 2001. So we were not able to do anything and in order to finish a site, for example, we could not install a radar system in the radar building until the air conditioner was installed on the roof. So if the air conditioner or the tower was still in Customs, we could not begin installation. There was a large delay in starting the installation and even in April, when the equipment came out, it did not all come out at the same time. So we would have a radar, for example, antenna at a site, but the tower would still be in Customs. You cannot install a radar antenna if you don't have the tower erected. So the delay in releasing the item from Customs basically stretched the entire 4-Lot installation out to over double of what we had originally intended.

DR EL-AWA: Thank you, sir. In this case it was more than double, it was a year instead of three months.165

243.
During his cross-examination, Mr. Wilhelm clarified that, consistent with his stated position in his correspondence of 4 February 2001,166 the Claimant was responsible for the majority of the delays associated with the 4-Lot Contract but the Respondent was responsible with the majority of the delays associated with the 3-Lot Contract:

DR EL-AWA: Can you divide this delay and disruption between the two parties? What is the responsibility of the Respondent and that of the Claimant to this delay and disruption? Who is responsible for whatever part of it?

MR WILHELM: Are you talking about in terms of the work or are you talking about dollars? What are you talking about?

DR EL-AWA: No, I am talking about the delay and disruption.

MR WILHELM: I have made clear, I think in a number of the pieces of communication that you have, that Northrop Grumman was responsible for a significant portion of the delays and disruption in the 3-Lot. Conversely, NANSC was responsible for most, if not all, the delays and disruption -

DR EL-AWA: I am only limiting it to 3-Lot, sir, and in your letter, which is C-451, dated 4 February 2001, you say that the Respondent is responsible for approximately 80 per cent of these losses and Northrop Grumman, the Respondent, which is not in agreement, is responsible for 80 per cent of these losses, while NANSC, the Claimant, is only responsible for approximately 20 per cent. Are you still standing by this statement or have you changed it?

MR WILHELM: There’s no conflict in my statement. I asked you whether you were talking about dollars or you were talking about the scope of the work and you said it doesn’t make any difference.

This letter is relative to dollars. It is talking about who is responsible for dollars, not the total degree of disruption under the contract. It is simply saying that NANSC, in this letter, is responsible for 20 per cent of the dollars; we are responsible for 80. The letter also says that NANSC is responsible for 80 per cent of the delays in the 4-Lot and we were responsible -

DR EL-AWA: So the Respondents were responsible for 80 per cent of the delay in payments as 4-Lot contract?

MR WILHELM: Not payments, sir; costs.

DR EL-AWA: For 80 per cent of the delay costs?

MR WILHELM: Of the cost increase, sir; the cost increase.

DR EL-AWA: The cost increase?

MR WILHELM: Yes, sir. At that time, that was in February of 2001, it was 80:20 on the 3-Lot and it was 20:80 on the 4-Lot.167

244.
Mr. Simoni provided the following testimony in respect of the Respondent’s unpaid invoices in response to questions from members of the Tribunal:

PROFESSOR ELKHOLY: I would just like to ask you about the problems you mentioned in your report. You said that you made 47 trips to Egypt and that you have appointed two men to help you, General Menawi and Nabil Shoukry?

MR SIMONI: Yes, sir.

PROFESSOR ELKHOLY: And that all this did not work because one man was an obstructionist. That is Engineer Youssef.

This looks a little bit strange. Can you please explain some more, because this Engineer Youssef is interested to see his project finished, completed. But why should he be an obstructionist and is he the only one there. You have these 47 trips and these two men appointed to help you. All this did not work. Can you please explain some more because to my mind it looks a little bit strange.

MR SIMONE I will give you a couple of examples, sir.

THE PRESIDING ARBITRATOR; Go ahead.

MR SIMONE When I first came here in May of 2000, we stated to the ECAA at the time, now NANSC, that we were going to accelerate the 4-Lot and get it installed as quickly as possible.

After we met, we met all the team from the NANSC side, I met with my in-country program people, I immediately went back to Baltimore to start putting a schedule together for factory acceptance tests for the various equipments. One of them was the radar, the ASR-12 radar.

At that time I asked the ECAA to come in, around a June/July time-frame, and it took an actual MOU between Mr Wilhelm and General Kato to say that we would run that test in September, that delayed from June, July and August and we did not test it until September. So, that was one delay. That was one obstructionist delay.

PROFESSOR ELKHOLY: Yes, but my question is the following: If I am an obstructionist, I have to give some reasons —

MR SIMONI: I never got reasons.

PROFESSOR ELKHOLY: -- or a pretext or call it whatever you like. What were the reasons given --

MR SIMONE Sir, I never got the reasons.

THE PRESIDING ARBITRATOR: Let the question be put.

PROFESSOR ELKHOLY: -- to have this obstructionist position?

THE PRESIDING ARBITRATOR: Now answer.

MR SIMONI: Sir, I never got the reasons.

We were trying to work mutually to get these things installed as quickly as possible, and many FATs were delayed. In fact, I ran some FATs without the customer present, which was allowed by the 4-Lot.

PROFESSOR ELKHOLY: And with all your efforts you could not overcome this obstructionist approach?

MR SIMONI: No, sir.

DR EL-KOSHERI: What are the other examples that you mentioned?

MR SIMONI: Other examples were the VCSS. We asked them to come in on a certain date and they could not come in on that date. We asked for another date and then another date and then finally we got a date, but it took many, many efforts to get them to the United States for testing.

THE PRESIDING ARBITRATOR: At the end of paragraph 13, which my colleague questioned you about, Mr Simoni, the reference to Engineer Youssef in the last sentence, you say: Unfortunately, Engineer Youssef continued to delay this program until his departure just after 3-Lot provisional acceptance was granted, which leads me to ask two questions initially. Did you ever complain to Engineer Youssefs superior about the fact that, from your perspective he, Engineer Youssef, was an obstructionist?

MR SIMONI: I did not use that term, but I did talk to General Kato, yes.

THE PRESIDING ARBITRATOR: What did you tell General Kato?

MR SIMONI: That the program was being delayed.

THE PRESIDING ARBITRATOR: And did you point a finger at Engineer Youssef?

MR SIMONI: Yes, sir, I did.

THE PRESIDING ARBITRATOR: And what did General Kato answer?

MR SIMONI: I believe shortly thereafter he was removed from the program. There was no answer from General Kato.

THE PRESIDING ARBITRATOR: But shortly after you complained he was removed from the program, is that your evidence?

MR SIMONI: Yes.

THE PRESIDING ARBITRATOR: After his departure, did the relationship with NANSC improve?

MR SIMONI: It improved a little bit, yes.168

245.
During his cross-examination by the Claimant, Mr. Wilhelm referred to the Claimant's reasons for its non-payment of various invoices submitted by the Respondent:

DR EL-AWA: Thank you, sir. You brought me to my next question, which is about money. You said during your testimony today that NANSC didn't have enough money to pay the Customs and now you have mentioned again the money that NANSC doesn’t have to conduct this. How do you know that NANSC doesn't have money?

MR WILHELM: If you go back and look at the entire performance of the 3 and 4-Lot, it is punctuated with a large number of events where NANSC did not have the money to perform its required responsibilities. When I talked to General Kato on several occasions about why work was not being done, I was told directly that money wasn't available.

Let's go back for a minute and just remember a couple of things. When the contract extension for 4-Lot was not effected, we waited six and a half months for the down payment while being assured by NANSC that the money was in their bank and available to Northrop Grumman on almost a daily basis. They never received the money until six and a half months after they claimed they had it.

When we tried to get them to attend sites here in-country, ECAA personnel to go to sites in-country, we were repeatedly told they did not have the money to do so and Northrop Grumman had to pay for transportation for NANSC personnel to attend site acceptances.

We were required to pay Customs' fees and duties. We were required to pay bank fees and duties that were the direct responsibility, clearly called out in the contract, as NANSC responsibilities.

We had our hardware sit in Customs for six months because NANSC could not come up with the money to pay the Customs' fees. There was a serious shortage of money on the NANSC side in the performance of this contract. It wasn't a secret. It isn't an abstract conclusion. It is a fact.

DR EL-AWA: It is not secret, but it is not written anywhere that anybody told you personally or told any of your colleagues?

MR WILHELM: I just testified they did.

DR EL-AWA: It is not written.

MR WILHELM: They did tell me directly. General Kato told me on a number of occasions that there was no money to pay for not only the activity I have just described, but the additional funds necessary to reimburse us for the additional work that we did.169

246.
With respect to the Claimant’s drawdown of the Respondent’s performance bond on 2 January 2003 in the amount of US$3,362,197.00, Mr. Wilhelm wrote in his Witness Statement:

After explicitly promising not to do so in a meeting attended by myself in December 2002, NANSC drew down Northrop Grumman’s performance bond on January 2, 2003 in the amount of $3,362,000. On that same day, I wrote to NANSC’s Minister of Civil Aviation, Air Marshal Ahmed Shafik, asking him to assist Northrop Grumman recoup the draw down amount. After NANSC refused to pay back the draw down amount, I traveled to Egypt to meet directly with NANSC representatives, including Chairman Ibrahim A. Manna. Although NANSC admitted that it had agreed that it would not draw down the bond, nevertheless they were unwilling to pay it back. This is another example of NANSC’s bad faith in its dealings with Northrop Grumman arising directly out of funding shortages due to the mismanagement of program funds.170

247.
During the Hearing, Mr. Wilhelm described the Claimant’s draw down of the Respondent’s performance guarantee in the following words:

MR WILHELM: We entered into a period after the provisional acceptances were accomplished at the end of 2001/middle of 2002 where in 2002 we started an intense dialogue with NANSC relative to the resolution of the 4-Lot issues. We made very good progress in the latter-part of 2002. In the third quarter of 2002, I went in country and we reached agreement that our parties would agree to a fixed schedule for the resolution of the remaining items, and I would meet with the Minister at the end of 2002 and the two of us would resolve any issues that the two teams had been unable to resolve.

We received a request at the end of 2002, in December, that our performance bond was about to expire. So, we were asked to extend our performance bond an additional three months to permit the execution of the agreement for the 4-Lot. We were told by the Chairman of NANSC, by the deputy chairman of NANSC, that our bond would not be drawn down and that this extension was simply necessary to assure them that we would in good faith execute the settlement for the 4-Lot program.

My team remained in country to mid December and reached agreement on most items. There were some items that we did not reach agreement on. NANSC stated that they had to consult with their attorneys at the end of 2002, in order to obtain approval to pay us any additional moneys, and they asked that our team come back to the United States and we would be called back at the beginning of 2003 to execute the 4-Lot agreement. Instead, we found out, when we returned from our holiday shut down at the end of 2002 that NANSC, without notice, without following the requirements for bonds, had drawn down our performance bond on the program and we were, as I said, very shocked, very disappointed.

MR KAVANAUGH: I would like to refer you, then, to exhibit R-28 and ask you to identify that particular document.

[Exhibit R-28 displayed]

MR WILHELM: As I indicated, shortly after coming back to the office in January, we were notified on January 2 of the draw down of our performance letter of credit in the amount of USD 3,362,197.

I wrote this letter, dated January 2, the same date as the bond was drawn down, to His Excellency Air Marshall Ahmed Shafik, who was the Minister of Civil Aviation at that time, complaining about the fact that it had been done without notification or warning. I pointed out that we were assured, by senior management, including the Chairman and Vice Chairman of NANSC, that this would not be done, that it was done, and I asked in my letter for an immediate review by Minister Shafik of the situation. I explained the pretence that was offered to us as to why the meeting was adjourned in great detail, and I simply asserted that the Egyptian party had suddenly, and without warning and provocation from Northrop Grumman whatsoever, acted in a manner that was inconsistent with our written and oral agreements.

MR KAVANAUGH: At the time of this draw down of this performance bond, was there any work left to be done on the 4-Lot extension?

MR WILHELM: That is the really interesting part. The provisional acceptance had already taken place, and so we were in the warranty period of the contract. The way that warranty period works, final acceptance is automatic after a year, after provisional acceptance takes place, and there was virtually no way that we understood why this was taking place. It was very difficult period for us.

MR KAVANAUGH: As a result of this letter or anything you did subsequent to this letter, was the money that was drawn down eventually returned to Northrop Grumman?

MR WILHELM: No, sir. The last I knew of the draw-down money I was made aware that there was a separate bank account. NANSC produced a document that showed there was a separate bank account with that money in the bank account. But we never received our 3-Lot and 4-Lot payments, and I never received assurance, a similar assurance, on the 3-Lot and 4-Lot payments that had not been paid, that there was a bank account with those funds in that bank account.

MR KAVANAUGH: But, as we sit here today, have any of those funds been received, to your knowledge, by Northrop Grumman?

MR WILHELM: No, they have not.171

248.
Before analyzing, in turn, the Claimant's claims and the Respondent's counterclaims, the Tribunal wishes to stress again, that in doing so, it has considered the totality of the evidence in the record, including documentary and oral evidence.

IX. FINDINGS OF THE TRIBUNAL

249.
The Tribunal recalls that, on 1 April 2010, prior to the Parties’ submission of their Post-Hearing Briefs, it sent to the Parties a list of questions to be addressed in their Post-Hearing Briefs.172
250.
The Tribunal notes that both Parties, in their Post-Hearing Briefs, did, in fact, address these questions directly or indirectly in formulating their Claims and Counterclaims respectively.
251.
Many of the Claims and Counterclaims depend upon the first question raised by the Tribunal for discussion in the Parties’ Post-Hearing Briefs in relation to the order of precedence of the Parties’ contractual documents and the extent to which these may have been amended.
252.
The Tribunal will determine the order of precedence of the Parties’ contractual obligations at this time, before addressing each of the distinct Claims and Counterclaims.
253.
The Tribunal recalls the terms of Article 32 of the 3-Lot Contract which is incorporated by reference into the 4-Lot Contract:

Article Thirty-Two: Order of Precedence

1. Conditions of Contract

2. Statement of Work

3. Supplier’s Technical Proposal

4. Tender Technical Specification173

254.
The Claimant submits that the Respondent’s original Technical Proposal of March 1997 which includes a Bill of Quantity for the 3-Lot Contract only, is the item referred to as the third document in the order of precedence.174
255.
The Claimant further submits as follows:

The Respondent’s Technical Proposal which composes of Exhibits C-2, C-3 & C-4 constitute pre-contractual documents in the sense that they were prepared and submitted to Claimant by Respondent prior to signing the 3-Lot Contract.175

256.
Finally, according to the Claimant, the Technical Proposal was "never varied by the parties through subsequent agreements."176
257.
The Respondent submits that the Technical Proposal and Bill of Quantity of March 1997 was submitted during a "proposal phase, and contained various options regarding the potential final requirements that were to be negotiated in the final 3-Lot and 4-Lot Contract formulation."177
258.
According to the Respondent, the Parties engaged in extensive negotiations that had the objective of tailoring the original proposal to the Parties’ technical requirements and preferences. The Respondent submits that a cross reference matrix was used to negotiate the details of the Parties’ technical requirements and that the Bills of Quantity were refined by mutual agreement of the Parties. In this regard, the Respondent refers to the written and oral testimony of Paul Mason and Robert Warns.178
259.
Mr. Warns states as follows in his Witness Statement:

It is my understanding that NANSC alleges that Northrop Grumman’s Cost and Technical Proposal is the final document detailing certain Contract specifications. This is not true. Northrop Grumman submitted the Cost and Technical Proposal in response to NANSC’s tender. After Northrop Grumman submitted its Proposal, the parties extensively negotiated the 3-Lot technical specifications and cost for same at the Technical Interchange Meeting and subsequent Program meetings.179

260.
The Tribunal notes that the Parties 3-Lot Contract of 10 May 1997, included in appendix another Bill of Quantity for the 3-Lot Contract.180 Similarly, the 4-Lot Contract of 15 September 1998 also included in appendix a Bill of Quantity.181
261.
As a result, the Bill of Quantity in the Respondent’s original Technical Proposal was not definitive.
262.
The Tribunal also accepts the testimony of the Respondent’s witnesses with respect to the further negotiation of the Parties’ technical requirements following the signature of the Parties’ contracts.182
263.
The Tribunal notes that the Respondent submitted to the Claimant a "complete Bill of Quantity for the 3-Lot and 4-Lot contract and associated extension" on 8 April 1999.183 This is the latest Bills of Quantity for both of the Parties’ contracts in the record of these proceedings.
264.
The Tribunal determines that the 3-Lot and 4-Lot Contracts, referred to as the Conditions of Contract in the order of precedence, including their respective Bills of Quantity as they stood on 8 April 1999, are first in the Parties’ order of precedence.
265.
The Tribunal notes that there is no dispute between the Parties regarding the existence or the appropriate weight to be given to the Statement of Work,184 which is the second document in the contractual order of precedence.185
266.
With respect to the Technical Proposal, the Tribunal recalls that this document is listed third in the order of precedence. The Tribunal notes that the Technical Proposal itself states in the Preface to the "Specification for the Upgrading of Approach and Termination Area Control for Luxor, Hurghada, and Sharm El Sheikh International Airports":

[...] this document contains low-level detail that is more a description of specific implementation than a set of operational requirements.186

267.
Despite the fact that this proposal was subsequently refined and negotiated, the Tribunal determines that the Technical Proposal remains one of the governing documents. In accordance with the order established by Article 32 of the Parties’ contracts, the 3-Lot and 4-Lot Contracts and Bills of Quantity and the Statement of Work supercede the Technical Proposal.
268.
The Tribunal will now proceed to review, analyze and determine each of the Claimant’s Claims and the Respondent’s Counterclaims in the light of the totality of the evidence before it, oral and documentary.

A. THE CLAIMANT’S CLAIMS

1. Claim One/1: Undelivered Radar Support System in the Amount of US$180,091.50

269.
The Claimant claims that the Respondent failed to provide RSS software to the Claimant contrary to the Respondent’s Technical Proposal and claims a total amount of US$180,091.50.187
270.
The Claimant refers to its requests for the delivery of software development tools188 as well as an airway bill of 17 June 2002 listing the delivery of RSS software as evidence of the Respondent’s failure.189 In particular, the Claimant refers to its letter of 20 April 2000 which states:

NGOSCO is, also, kindly reminded to make sure that the Instructor will bring with him the latest RSS build that contains expanded Datalink Functions and an improved process to assist the operator in building maps from DTED data, load it and include it in the curriculum training.190

271.
The Respondent submits it delivered the contractually required RSS Support System, which includes all the necessary hardware and software on 28 July 1999, as evidenced by the shipping invoices,191 as well as its request to the Claimant of 22 July 1999 that it approve said shipment.192
272.
Mr. Mason, who appeared before the Tribunal as a witness on behalf of the Respondent, states as follows in his Witness Statement:

[...] I bought the RSS tool on behalf of Northrop Grumman to provide to NANSC.193 The RSS was first shipped to Baltimore where training for NANSC personnel was conducted.

While the RSS was still in Baltimore, I used the RSS tool to create a site coverage report including coverage diagrams for every 3-Lot and 4-Lot site to determine the best location for the radars. This was a requirement in NANSC’s specifications and could not have been accomplished without the use of the RSS or an equivalent tool. This site coverage report, including several plots for possible radar locations, was given to NANSC. None of this would have been possible if the RSS did not include its operational software. The software resided in the Sun workstation and was in the Sun workstation when it was shipped to Cairo.

[...]

Northrop Grumman used the RSS tool output plots at the flight test at every 3-Lot and 4-Lot site. I personally used the RSS output plots at 3-Lot site Sharm El Sheikh and 4-Lot site Aswan during the flight test.194

273.
On the basis of the totality of the evidence, the Tribunal finds that the Respondent delivered all contractually required RSS software. The Claimant’s Claim One/1 is dismissed.

2. Claim One / 2: Undelivered Radar Output Analysis Tool in the Amount of US$21,698.00

274.
The Claimant claims that the Respondent failed to deliver radar output analysis tool software in accordance with the Respondent’s Technical Proposal, and claims a total of US$21,698.00. The Claimant claims that the Respondent’s delivery of the ROAT hardware does not prove the supply of the necessary software.195
275.
The Respondent claims that ROAT consists of a computer which included all necessary ROAT software. The Respondent refers to its letter of 18 February 2002 which states that shipment "#5123 consists of an OMT with Radar Output Analysis Tool Computer"196 as well as the Claimant’s letter of 11 April 2002 requesting the Respondent provide the password to log into the ROAT computer.197
276.
Mr. Mason states the following with respect to ROAT in his Witness Statement:

It is my understanding that NANSC alleges that Northrop Grumman did not deliver the Radar Output Analysis Tool ("ROAT"). The ROAT is a software program installed on a PC running windows. The purpose of ROAT is to analyze data collected from the ASR-12 radar to measure, among other things, the probability of detection aircraft, aircraft code validation, false alarm rates within the radar’s coverage, and other performance capabilities. ROAT runs on a Microsoft Windows computer. Although NANSC did not have a requirement for ROAT in its technical specifications, I offered this tool to NANSC as an additional feature that could be used by engineers in Cairo to analyze data recorded from each of the ASR-12 sites and thus measure the ASR-12 performance. ROAT was delivered toNANSC on a Microsoft Windows computer at the same time the RSS was delivered.

Northrop Grumman not only provided NANSC the ROAT on a PC but Northrop Grumman also used a copy of the ROAT software during flight test at every 3-Lot and 4-Lot site. I personally used the ROAT during the flight test analysis at Sharm El-Sheik and Aswan.198

277.
On the basis of the totality of the evidence, the Tribunal finds that the Respondent delivered the contractually required ROAT. The Claimant’s Claim One / 2 is dismissed.

3. Claim One/3: Undelivered Automatic Site Selection in the Amount of US$53,977.10

278.
The Claimant claims the Respondent failed to provide automatic site selection software, contrary to the Parties’ agreement during the Technical Meeting held between 2 and 6 May 1997. The Claimant relies on a handwritten list entitled "Additional Items" included at the end of the Minutes from Technical Meeting which includes the item "Site Selection" as proof of the Parties agreement to add this feature to the contract.199 The Claimant claims a total of US$53,977.10 for one undelivered automatic site selection software system.200
279.
The Respondent submits that the Claimant never exercised its option to add the ASS feature to the contract. The content of the Minutes of Technical Meeting state that site selection is a feature which may be added by the Claimant.201 The Respondent denies being under a contractual obligation to supply ASS but states that it nevertheless delivered this feature as part of the RSS software in an effort to placate the Claimant and receive withheld 4-Lot Contract payments.202
280.
The evidence includes the Respondent’s letter of 23 September 1998 which states in part:

The data link software is not installed. The price included additional sums equal to $56818 and $28409 for Automatic Siting and Data link software, respectively. Refer to Task ID 232 (Deliver Data Link Analysis Software) and Task ID 321 (Deliver Site Selection Software) in the Monthly Reports. The Company’s representatives stated that they will check this issue with the Company’s responsible offices- who was on vacation at the time of training- and will notify ECAA later. [...]203

281.
Having reviewed the evidence, the Tribunal finds that the Claimant has not discharged its burden of proof in respect of this claim. The Claimant’s Claim One/3 is accordingly dismissed.

4. Claim One / 4: Undelivered Data Link Analysis Tool in the Amount of US$26,988.55

282.
The Claimant claims the Respondent failed to provide data link analysis software, contrary to the Parties’ agreement during the Technical Meeting held between 2 and 6 May 1997. The Claimant relies on a handwritten list entitled "Additional Items" included at the end of the Minutes from Technical Meeting which includes the item "Data Link. Analysis" as proof of the Parties agreement to add this feature to the contract.204 The Claimant claims a total of US$26,988.55 for one undelivered automatic data link analysis software.205
283.
The Respondent submits that the Claimant never exercised its option to add the DLA feature to the contract. The content of the Minutes of Technical Meeting state that site selection is a feature which may be added by the Claimant.206 The Respondent denies being under a contractual obligation to supply ASS and states that it used its own equipment to conduct a DLA during the Site Acceptance Tests conducted at each site.207
284.
The evidence includes the Respondent’s letter of 23 September 1998 which states in part:

The data link software is not installed. The price included additional sums equal to $56818 and $28409 for Automatic Siting and Data link software, respectively. Refer to Task ID 232 (Deliver Data Link Analysis Software) and Task ID 321 (Deliver Site Selection Software) in the Monthly Reports. The Company’s representatives stated that they will check this issue with the Company’s responsible offices- who was on vacation at the time of training- and will notify ECAA later. Data Link Analysis software should be provided [...]208

285.
Having reviewed the evidence, the Tribunal finds that the Claimant has not discharged its burden of proof in respect of this claim. The Claimant’s Claim One/ 4 is accordingly dismissed.

5. Claim One/5: Undelivered RSS Sensor Models in the Amount of US$30,000.00

286.
The Claimant claims 10% of the value of the complete Radar Support System owing to Respondent’s failure to provide an ASDE sensor model for the Claimant’s RSS, for a total claim of US$30,000 .00.209 The Claimant refers to the Respondent’s Technical Proposal210 as well as the Respondent’s written confirmation of 7 December 1997 that it would supply the ASDE at the Claimant’s request.211
287.
The Respondent claims that its Technical Proposal simply provided an explanation of the RSS technology and its ability to work with and be compatible with many different types of radar systems and sensor models, and that the Claimant mistakenly treats the description as a contractual obligation. In any event, the Respondent submits that it delivered the sensor models as part of the overall RSS tool.
288.
The evidence reveals that the Claimant did in fact receive the claimed ASDE software. The Claimant’s letter of 23 September 1998 regarding the RSS states in part as follows:

Therefore, ECAA hereby requests that NG should undertake the necessary actions and arrangements to complete the following listed training tasks to enable ECAA to make the utmost utilization and benefit of the designed capabilities of the RSS system: [...]

4. Training on how to use the system with ASDE equipment. [...]

7. ECAA Trainees noticed that the RSS software included analysis of, only, the effect of sea surface but does not include analysis of the effect of ground surface on the Radar Performance (vertical lobbing...) except for ASDE. [...]

289.
On the basis of the totality of the evidence, the Tribunal finds that the Respondent delivered the requested ASDE sensor models. The Claimant’s Claim One/5 is accordingly dismissed.

6. Claim Two / 1: Undelivered Frequency Generators Under the 4-Lot Contract in the Amount of US$743,432.00

290.
The Claimant claims the estimated value of two additional Frequency Generator spares at each of the 4-Lot Contract sites, for a total of US$743,432.00. The Claimant refers to the Respondent’s agreement "to supply one additional set of Freq. Gen. modules at each of the three sites" in reference to the 3-Lot Contract,212 and claims that this agreement was applied to the 4-Lot Contract. The Claimant refers to the correspondence of 9 September 1998 regarding the 4-Lot Extension Contract which states that with respect to redundancy, the Respondent "will abide by the agreements reached with ECAA"213 and the Respondent’s subsequent statement on 15 October 1998:

Northrop Grumman agreed to provide a second set of Frequency Generator spare modules at each of the seven sites.214

291.
The Respondent submits that following the Claimant’s suspension of Factory Acceptance Testing, it agreed to provide one additional Frequency Generator spare per 3-Lot site. The Respondent submits that this agreement created no similar obligation under the 4-Lot Contract.215
292.
On the basis of the Respondent’s statement on 15 October 1998 that it was going to provide a second set of frequency generator modules at each of the seven sites, the Tribunal finds that there was an agreement to provide these under the 4-Lot Contract. The Claimant claims eight frequency generators whereas the agreement was to provide an additional set of frequency generators at each of the four 4-Lot Contract sites.
293.
Accordingly, the Tribunal finds the Respondent liable to the Claimant for the cost of four frequency generators in the amount of US$371,716.00.

7. Claim Two / 2: Undelivered Remote Control and Monitoring System Under Both the 3-Lot Contract and the 4-Lot Contract in the Amount of US$198,247.00

294.
The Claimant claims the value of twenty-one operator maintenance terminals (OMTs) for the 3-Lot and 4-Lot Contract sites for a total of US$ 198,247.00. The Claimant claims that the original OMTs installed at the 3-Lot Contract locations were unacceptable and that the Respondent agreed to replace these, at no additional cost, with upgraded OMTs that were to be installed under the 4-Lot Contract.216 The Claimant refers to the Respondent’s letter of 8 August 2001 wherein it states:

Return of the OMTs It was agreed to replace the 3-Lot OMTs with the same style delivered on the 4-Lot during TIM#1. However, the replacement OMTs will not be shipped unless NGOSCO gets written authorization to ship the 3-Lot replaced OMTs back to the U.S.217

295.
The Claimant provided authorization to ship the old OMTs back to the U.S. on 15 August 2001.218
296.
The Respondent states that its agreement to upgrade the 3-Lot Contract OMTs was conditional on the payment of outstanding 3-Lot Contract invoices, and there is no contractual requirement to provide the upgraded OMTs to all seven airport sites. The Respondent refers to its letter of 13 November 2001 quoting the total cost to upgrade all OMTs.219
297.
The evidence is to the effect that on 21 October 2000 the Parties had a agreed on the resolution of a number of open or outstanding items under the 3-Lot Contract as well as the Claimant’s payment of unpaid invoices. The Respondent’s letter of 22 October 2000 states as follows:

Please find attached the list of open items on the 3-Lot. The values assigned to the various tasks are assumed to be imebedded in invoices that have been submitted for the 3-Lot. As agreed in our meeting yesterday with you, Gen. Manawi, Mr. John Jackson, Mr. Mike Bums and myself, you agreed to approve all outstanding unpaid 3-Lot. invoices after deducting the value of the 3-Lot open items.220

298.
The list of open items shows 0US$ as the value to replace the OMT PCs with the same to be used as the 4-Lot Program.
299.
The Tribunal considers that this list was drafted for the purposes of the Claimant deducting amounts from the 3-Lot invoices and not as a quote for the price of upgrading the OMTs. There was therefore no agreement between the Parties that this upgrade would be performed at no additional cost. The Respondent provided the Claimant with a price quote for upgrading the OMTs and there is no evidence that the Claimant ever accepted this proposal. The Claimant’s Claim Two / 2 is dismissed.

8. Claim Three: Voice Communication Switching System Under Both the 3-Lot and 4-Lot Contracts in the Amount of US$346,703.40

300.
The Claimant claims that the Respondent failed to deliver certain hardware components of the Voice Communication Switching Systems installed at all of the sites under the 3-Lot and 4-Lot Contracts. The Claimant claims a total of US$346,703.40 for undelivered TEDs, foot switches, dual jack modules, loudspeakers, operator headsets, operator handsets, firmware support and recording cartridges.221
301.
The Claimant refers to items 5.1.2, 5.1.4, 5.1.7, 5.1.8, 5.1.9 and 7.1 of the Bill of Quantity of March 1997 as well as the mention in the Minutes of Technical Meeting that 50 recording cartridges per site will be supplied.222
302.
The Respondent submits that the VCSS hardware components at issue were waived by the Claimant under the 3-Lot Settlement Agreement. With respect to the 4-Lot Contract, the Respondent submits that the required quantity of components was indeed supplied to the Claimant and that the Claimant improperly relies on the 3-Lot Contract Bill of Quantity of March 1997 in its claim, whereas the Bills of Quantity of 8 April 1999 reveal that a lesser quantity of VCSS hardware components was to be provided.223
303.
The Tribunal considers the Parties’ 3-Lot Settlement Agreement to be valid and binding on the Parties. The 3-Lot Settlement Agreement states that the Claimant waives "any potential claim [...] for BOQ items of 9 TEDs, 30 handsets, 2 Foot Switches, 29 Dual Jack Modules, 11 Loud Speakers and 20 Recording Tapes [...]."224 The Tribunal finds that the Claimant waived any potential claim in relation to these items.
304.
The Tribunal notes that even the Bill of Quantity for the 3-Lot Contract of March 1997 on which the Claimant relies does not include the number of VCSS components that the Claimant claims under this heading,225 and that the Bills of Quantity of 8 April 1999 reflects much lower quantities of VCSS components for the 3-Lot and 4-Lot Contracts than claimed by the Claimant.226
305.
In addition, the evidence includes certificates for all 4-Lot Contract site locations confirming the complete installation of VCSS in accordance with all contractual requirements, all of which are duly signed by a representative of the Claimant.227
306.
On the basis of the totality of the evidence, the Tribunal finds that the Claimant has failed to discharge its burden of proof in respect of its claim for undelivered VCSS components on the balance of probabilities. Claim Three is therefore denied.

9. Claim Four / 1: Undelivered Bypass Recording and Playback Servers in the Amount of US$241,144.00

307.
The Claimant claims the value of the hardware associated with the bypass recording and playback server at all three 3-Lot Contract site locations. On the basis of the Respondent’s price quote of 11 November 2001 for a full "3-Lot Retrofit",228 the Claimant claims a total of US$241,144.00, broken down as follows:229

Site 3 Sites
Hardware
Bypass Processor $ 18,467.00 $ 55,402.00
Cables S 208.00 $ 624.00
Server Switch $ 1,996.00 $ 5,989.00
I&CO $ 59,710.00 $ 179,128.00
Total: $ 80,381.00 $ 241,144.00230

308.
The Claimant submits that the Parties agreed on 29 June 1998 that the bypass recording and playback upgrade would be provided for the 3-Lot Contract at no additional cost:231

On the 7 systems, Northrop Grumman agrees to implement the recording and playback of bypass data displayed on the RCW when the system is operating in the bypass mode.232

309.
The Respondent submits that there is no contractual obligation to supply bypass recording and playback hardware to the 3-Lot Contract airport sites. The Respondent refers to the Responses to Action Items of 13 June 1998 wherein Claimant asked at line item 367: "Is it possible to add the recording feature in bypass mode?"233 and the Respondent answered as follows:

Northrop Grumman has evaluated this request and has determined this change would require a substantial software development effort. Should the ECAA formally request a quote, then Northrop Grumman will provide a cost proposal.234

310.
The Respondent submits that this is further confirmed by the fact that as late as 11 November 2001, the Respondent provided a price quote for the supply of bypass processors for the 3-Lot Contract at US$18,467.00 each.235 According to the Respondent, the Claimant never accepted this offer.236
311.
The Respondent further submits that despite the lack of contractual obligation, it did provide the hardware for the 3-Lot Sites. The Respondent explains as follows:

Three years after the 3-Lot Settlement Agreement, Claimant in bad faith demanded that Northrop Grumman provide an additional bypass feature linked to the playback recorder for the 3-Lot sites. In an unsuccessful effort to facilitate Claimant’s payment of outstanding monies due, Northrop Grumman provided this out-of-scope additional bypass feature. Claimant’s Reply states that Northrop Gramman provided no evidence that it installed this feature at the 3-Lot Sites. Although Claimant accepts Northrop Grumman’s 4-Lot SATs as evidence that this feature was installed for those sites, its Reply dismisses Northrop Grumman’s 3-Lot SATs as well as the 3-Lot Retrofit Certificate as evidence that this feature was installed. The attached invoice demonstrates that this bypass feature was installed at the 3-Lot Sites.237

312.
The Respondent submits shipping document dated 3 February 2001,238 and a letter from the Respondent to the Claimant dated 5 January 2001 enclosing a manual for voice/ data synchronization during playback.239
313.
The Tribunal notes that the evidence also includes a letter from the Claimant dated 12 September 2001 stating:

Please be kindly informed that your representative had received (2) two faulty recording and play back units from Sharm El Sheikh TMA, and NCANS didn’t receive any other alternative recording unit or informed with the status of the faulty units which led to a risky operating condition of this unit. [...]240

314.
The Tribunal finds that the evidence is to the effect that this hardware was supplied by the Respondent but that the equipment was faulty. The Tribunal also notes that the Claimant includes the cost of other items in its claim, whereas the amount claimed for the bypass processor hardware alone is US$18,467.00. The Tribunal grants the Claimant’s Claim Four / 1 to the extent of US$36,934.00, representing the value of two bypass recording and playback processor units.

10. Claim Four/2: Undelivered Flight Strip Printers in the Amount of US$27,818.00

315.
The Claimant claims the Respondent was under an obligation to supply two flight strip printers in every 3-Lot and 4-Lot Contract airport site. The Claimant admits having received one flight strip printer for each site from the Respondent and claims a total value of US$27,818.00 for seven undelivered flight strip printers:

The contractual obligation is to supply two Flight Strip Printers. In fact, Claimant received only one Flight Strip Printers and this is why Claimant is claiming for the other Flight Strip Printers.241

316.
The Respondent submits it delivered the contractually required quantity of flight strip, printers.242
317.
The Tribunal finds that the Price List appended to the 3-Lot Contract as well as the Price List appended to the 4-Lot Contract provides for the delivery of only one flight strip printer to each of the airport locations.243
318.
The Tribunal finds that by the Claimant’s admission, the Respondent satisfied its contractual requirement for the supply of one flight strip printer to each of the seven sites. The Claimant’s Claim Four / 2 is accordingly dismissed.

11. Claim Four/3: Unsupplied Air Carrier Billing Units in the Amount of US$562,667.00

319.
The Claimant claims the Respondent was under an obligation to supply an air carrier billing unit as part of the Airspace Management System installed in each of the seven airport sites in light of the inclusion of this hardware in the AMS Computer Systems Operation Manual.244 The Claimant claims a total of US$562,667.00 by reference to the price of a similar air carrier billing unit.245
320.
The Respondent denies any contractual obligation to supply ACBs to the Claimant. The Respondent submits that the reference to this hardware in an operation manual reflects the fact that this was an option that could have been exercised by the Claimant. No contractual document refers to the supply of ACBs.
321.
The record includes only a partial extract of the AMS Computer Systems Operation Manual prepared by the Respondent for reissue on 22 December 2000. The Claimant relies on page 1 of the document which states:

The basic Egypt Airspace Management System (AMS) comprises the following major hardware components: [...]

• one Air Carrier Billing (ACB) unit246

322.
On the basis of the totality of the evidence, the Tribunal finds that the Claimant has failed to discharge its burden of proof in respect of its claim for the supply an air carrier billing unit. Claim Four / 3 is therefore denied.

12. Claim Four / 4: Unsupplied Furniture in the Amount of US$893,508.00

323.
The Claimant claims the difference in value between the furniture supplied by the Respondent and the total amount attributed to furniture in the 3-Lot and 4-Lot Contracts. The Furniture item is quoted in the 3-Lot Contract Price List at US$765,438.00247 and in the 4-Lot Contract Price List at US$1,020,584.00248 for a total of US$1,786,022.00. The Claimant claims that the value of the furniture actually supplied by the Respondent was US$892,514.00. The Claimant thus claims the difference in value between the furniture actually supplied and the quoted price attributed to furniture for a total of US$893,508.00.249
324.
The Respondent claims that the value quoted under the line item 6.9 "Furniture" in both the Bills of Quantity refers to the selling price of the furniture, including cost of insurance, overhead costs and tracking costs, while the price listed on the shipping documents reflects the cost of furniture.250
325.
Mr. Simoni, who appeared before the Tribunal as a witness on behalf of the Respondent, states as follows in his Witness Statement:

Northrop Grumman provided NANSC all required furniture for the 3-Lot and 4-Lot sites. This was a fixed-price contract in which NANSC paid the contractually agreed amount of the performance prior to Northrop Grumman’s performance. The difference between the price of the furniture stated in the BOQ and the lower price listed in Northrop Grumman’s shipping records was the result of various add-on costs, such as overhead and insurance costs, that were not listed in the invoices. Thus, the actual cost of the furniture is less than the selling price of the furniture.251

326.
The Tribunal is unable to confirm, on the basis of the evidence submitted by the Parties, the actual value of the furniture supplied by the Respondent to the Claimant. As a result, the Tribunal finds that the Claimant has failed to discharge its burden of proof in respect of its claim for unsupplied furniture. Claim Four /4 is therefore denied.

13. Claim Five: Failure to Supply Test Equipment and Tools Under the 3-Lot and 4-Lot Contracts in the Amount of US$394,268.00

327.
The Claimant claims the value attributed to Test Equipment and Tools for item numbers 4.29, 5.1.10, 5.4.4, 6.10, 7.4 and 8.3.2 in the Contractual Documents and Bill of Quantity of March 1997.252 The Claimant claims it never received any of the test equipment or tools under either the 3-Lot or 4-Lot Contracts and claims a total of US$394,268.00.
328.
The Respondent submits that different parts of the ATC system installed required different equipment and tools. The Respondent’s Statement of Work, which is listed second in the order of contractual precedence, and therefore governs the Respondent’s obligations provides:

6.5 Support Equipment and Tools

The Contractor shall provide Special Test Equipment (STE) and Tools which are required to maintain the delivered radar system and equipment. Software maintenance tools required to support Engineering staff to modify, upgrade, update, select radar sites, check and analyze performance of the equipment, shall also be provided.253

329.
The Respondent refers to its letter of 27 May 1999 wherein it clarified the test equipment and tools it would provide the Claimant. In reference to item number 4.2.9, the letter states that the special tools to be provided "are required for maintenance actions on the pedestal equipment"254 With respect to item number 5.4.4, the letter states that no special test equipment or tools were required and that the heading referred to the "required spares" Finally, the letter encloses a list of test equipment and tools corresponding to items number 6.10 and 8.3.2.255
330.
With respect to the Bills of Quantity item number 4.2.9 entitled "Necessary Test Equipment", the evidence reveals that the Respondent provided the test equipment and tools associated with this item under the 3-Lot Contract,256 and the 4-Lot Contract.257
331.
On the basis of the evidence, the Tribunal finds that the Respondent delivered the item number 4.2.9. The Claimant’s claim for this item is accordingly dismissed.
332.
With respect to the Bills of Quantity item number 5.1.10 entitled "Maintenance/Repair Test Equipment (Contractor specified)", there is no evidence in relation to the supply of any test equipment to the Claimant under this heading. The Respondent claims that it "was only obligated to provide the site contractor with a list of recommended tools for the subcontractor's work, which it did."258 The Respondent submits no evidence in support of its argument that it provided a list of recommended tools for purchase by the Claimant. The Bills of Quantity specifies an exact amount of US$8,062.00 per site for this line item.259
333.
The Tribunal finds that the Respondent is liable to the Claimant in the total amount of US$56,434.00 for the supply of item number 5.1.10 of the Bills of Quantity of 8 April 1999 for all seven sites under the 3-Lot and 4-Lot Contracts and the Tribunal so finds.
334.
With respect to the Bills of Quantity item 5.4.4 entitled "Spares/Test Equipment/Misc Hardware", there is evidence that the Respondent provided these items as part of its obligation to provide spare parts generally.260
335.
On the basis of the evidence, the Tribunal finds that the Respondent delivered item number 5.4.4 to the Claimant. The Claimant’s claim for this item 5.4.4 is accordingly dismissed.
336.
With respect to Bills of Quantity item 6.10 entitled "Maintenance/Repair Test Equipment Contractor Specified", the evidence reveals that the Respondent provided this equipment to all 4-Lot Contract sites.261
337.
There is however, no evidence in relation to the Respondent’s supply of this equipment to any of the 3 Lot Contract sites. This line item is priced at US$13,249.00 per site in the Bills of Quantity.262
338.
Accordingly, the Tribunal finds that the Respondent is liable to the Claimant in the amount of US$39,747.00 for the supply of item number 6.10 of the Bills of Quantity of 8 April 1999 for the three sites under the 3-Lot Contract only.
339.
With respect to item number 7.4 of the Bills of Quantity, the Tribunal notes that this item does not appear in the Bills of Quantity of 8 April 1999. The Tribunal notes however, that the original Bill of Quantity for the 3-Lot Contract included in the Respondent’s Technical Proposal of March 1997 features this line item but without any associated cost.
340.
The Respondent submits that item number 7.4 was removed from the Bills of Quantity.263
341.
The Tribunal finds that the Claimant has failed to discharge its burden of proof in respect of its claim for item number 7.4. This claim is accordingly dismissed.
342.
With respect to item number 8.3.2 of the Bills of Quantity entitled "Test Equipment and Tools for Electrical Power Supply", the evidence reveals that the Respondent provided same to all 4-Lot Contract sites264 and 3-Lot Contract sites.265
343.
On the basis of the evidence, the Tribunal finds that the Respondent delivered item number 8.3.2 to the Claimant. The Claimant’s claim for this item is accordingly dismissed.
344.
In accordance with the Tribunal’s findings at paragraphs 333 and 338 above, the Claimant’s Claim Five is granted to the extent of US$96,181.00.

14. Claim Six: Failure to Supply Documentation Under the 3-Lot Contract and the 4-Lot Contract in the Amount of US$261,040.00

345.
The Claimant claims the Respondent failed to supply technical manuals and documentation with all installed equipment and systems contrary to the Respondent’s Technical Proposal and Statement of Work.266 The Claimant claims the value of undelivered documentation in the amount of US$261,040.00.267
346.
The Respondent submits that it delivered all manuals and documentation required by contract, and the Claimant has failed to identify any documentation it did not receive. The Respondent refers to over twenty exhibits evidencing its delivery of manuals and documentation to the Claimant.268
347.
Fatin Badir, who did not appear before the Tribunal but submitted a Witness Statement on behalf of the Respondent, affirms that all required documentation and manuals were delivered to the Claimant.269
348.
Having considered the totality of the evidence, including the Respondent’s evidence of its delivery of training manuals, technical manuals, system and hardware manuals and other documentation,270 the Tribunal finds that the Claimant has not proved that the Respondent failed to supply documentation in breach of the Parties’ contracts. Accordingly, the Claimant’s Claim Six is dismissed.

15. Claim Seven / 1: Microwave Subsystems Removed from the Scope of Work Under the 3-Lot and 4-Lot Contracts, in the Amount of US$240,934.10

349.
The Claimant claims the cost of the microwave radio subsystems the Respondent was obligated to install at the airport sites of Luxor, Aswan and Borg El Arab. The Claimant states that it accepted the Respondent’s proposal of using a fibre optic link instead of a microwave subsystem in Luxor. For the Aswan site, the Claimant instructed the Respondent to use the fibre optic link instead of the microwave subsystem. For the Borg-E1 Arab site, the Claimant claims that the Respondent attempted to change the price and specifications of the microwave subsystem and that the Claimant refused and requested the Respondent adhere to the contractual specifications. The Claimant claims the value of the microwave subsystem, microwave training and microwave spare parts that was never supplied to Borg El Arab, as well as the difference in value between the fibre optic links installed at Luxor and Aswan instead of the microwave subsystems, and claims a total of US$240,934.10.271
350.
The Respondent refers to the Claimant’s direction to install the fibre optic links instead of the microwave subsystems at Luxor and Aswan airport sites.272 As a result, the Claimant cannot make a claim for the Respondent having followed its instructions. In the case of the Borg El Arab site, the Respondent’s performed an independent survey and determined that the installation of either a fiber optic link or a 23GHz microwave subsystem were not feasible. The Respondent offered to install a microwave subsystem with a lower frequency but the Claimant refused this option.273
351.
The evidence reveals that on 8 January 2001, the Respondent explained the following situation at Borg El Arab:

The Borg APQC link

Related to the Borg ADOC you indicated after further evaluation that the only viable option available to the ECAA for the Borg ADOC link was the nearly 20km long microwave link. This is the link that was recently surveyed by our selected microwave subcontractor. Northrop-Grumman indicated that a detailed analysis is underway using the data gathered.

Preliminary results indicate a change in frequency due to environmental conditions will be required to ensure the required link availability at this site. Northrop-Grumman mentioned a system in the 7GHZ band and you indicated a desire to consider a system in the 14GHz band. Either change in frequency will require an approval on your part. In addition, the analysis will provide the required height of the towers needed at each end. Upon completion of the analysis any cost impact from the contract proposed microwave system will be provided to the ECAA.274

352.
Further to the Claimant’s request of 11 March 2001, the Respondent provided the Claimant with a copy of the Microwave Analysis Report prepared by the Tadiran Microwave Networks company.275 On 25 April 2001, the Respondent confirmed that the 25GHZ microwave subsystem would be insufficient for the facility at Borg El Arab and that it awaited approval of the 15GHz system proposed by the Respondent at a revised price. The Claimant repeatedly refused to "accept any deviations from the contract price."276
353.
The Tribunal determines that since the Claimant specifically requested that fiber optic links be installed at the Luxor and Aswan airport sites,277 it cannot now claim the cost difference between this equipment and that of the microwave subsystems. Moreover, the Claimant waived any potential claim in relation to the "Installation of Fiber Optic Interface vs Microwave Interface to ADOC at Luxor" under the 3-Lot Settlement Agreement.278
354.
With respect to the absence of any installed microwave subsystem at the Borg El Arab site, the Tribunal considers that the Respondent is not responsible for the Claimant’s failure to provide a service order or instructions regarding the microwave subsystem to be installed. Differences in the required specifications of equipment were foreseeable between the submission of the Respondent’s Technical Proposal in May 1997 and the choice of location for the airport sites and the analysis of the Borg El Arab location in January 2001.
355.
Accordingly, the Tribunal finds that the Claimant’s Claim Seven / 1 is dismissed.

16. Claim Seven / 2: MV/LV Transformers Removed from the Scope of Work Under the 3-Lot and 4-Lot Contracts, Representing the Amount of US$205,593.00

356.
The Claimant claims the cost of two MV/LV transformers that were not needed for the Luxor or Hurghada airport sites and were instead used for the El Arish and Borg El-Arab sites. The Claimant claims the value of the cost savings to the Respondent for the two transformers in the amount of US$205,593.00.279
357.
The Claimant refers to the Minutes of the Facility Working Group Meeting of 29 February 2000 wherein its agreement regarding the transfer of the transformers is documented as follows:

Use of (2) extra 3 Lot Transformers for 4 Lot - The ECAA has agreed to let NGOSCO use the two extra 3-Lot transformers on the 4-Lot program. The ECAA does not want to trade the transformers for economizers on the HVAC units for the TMA Buildings. ECAA is considering trading the transformers for emergency generators for the TMA buildings.280

358.
The Respondent submits that due to the particular site circumstances, the transformers that had been delivered for Luxor and Hurghada were not needed and the Parties agreed that these would instead be used for sites under the 4-Lot Contract. The Respondent concedes that this meant that "two less 4-Lot MV/LV transformers were required to be delivered."281 The Claimant explicitly agreed to the transfer without reserving its right to any payment for the transformers. In any event, the Respondent submits that the Parties’ contracts are fixed-price, turnkey contracts which cannot be changed by the Claimant.282
359.
The Tribunal finds that the Claimant agreed to transfer two MV/LV transformers purchased under the 3-Lot Contract to 4-Lot Contract sites but did not waive its right to be reimbursed for the two transformers that the Respondent did not need to purchase in connection with the 4-Lot Contract.
360.
Accordingly, the Respondent is liable to the Claimant for the cost of two MV/LV transformers at the price of US$45,339.00 each.283 The Claimant’s Claim Seven / 2 is thus granted in the amount of US$90,678.00.

17. Claim Seven/3: Uninterruptable Power Supply Units Removed from the Scope of Work Under the 3-Lot and 4-Lot Contracts, Representing the Amount of US$320,463.00

361.
The Claimant claims the cost difference between the UPS batteries indicated in the Respondent’s Technical Proposal and those actually installed by the Respondent in both the 3-Lot and 4-Lot Contract sites for a total of US$320,463.00.284
362.
The Respondent submits that it installed a newer, more advanced UPS battery following receipt of the Claimant’s approval of such change.285
363.
The evidence reveals that on 22 January 1998, the Respondent advised the Claimant as follows:

[...] the UPS system model EPS2000 required to be supplied by the contract is no longer in production. This model has been replaced by the Galaxy PW UPS model. Both systems are manufactured by MGE.

In addition, we have attached additional information requested by your Facilities Engineering personnel regarding the Galaxy PW system. [...] Your approval to this change is required by 1 February 1998 inorder [sic] for Northrop Grumman to proceed with the purchase.286

364.
On 25 January 1998, the Respondent advised the Claimant as follows:

The facilities proposal, page 21, paragraph 2, states that "30 minutes Nicad batteries" will be provided with the UPS system. Because of space restrictions in the Electrical room where the UPS system will be housed, the batteries we have proposed (ref. B letter) are 15 minutes. In addition, we have proposed "Sealed Lead Acid Batteries" instead of Nicad. Nicad nowadays are very rarely used, because of technological advances (safety, etc) with the "sealed lead acid batteries". We have discussed this matter with your Facilities Engineering personnel.

We request your kind approval to proceed with use of 15-minutes lead acid batteries.287

365.
Approximately ten months later, on 18 November 1998, the Claimant provided the Respondent with its explicit approval of the new UPS batteries in lieu of the ones specified in the Technical Proposal:

Please be informed that the High Consultancy Committee (HCC) has approved your proposal to provide 15 minutes Lead Acid Batteries with the UPS system instead of the 30 minutes Nicad Batteries.288

366.
On February 18, 2001, the Claimant informed the Respondent that said "batteries shall be rejected by ECAA if the computed back up time is found less than 15 minutes."289
367.
There is no indication in any of the evidence submitted by either of the Parties that the UPS batteries installed by the Respondent failed to meet the stated 15 minute back up time.
368.
In light of the Claimant’s explicit approval of the proposed change in UPS batteries on 18 November 1998, the Tribunal finds that Claim Seven / 3 must be dismissed.

18. Claim Seven / 4: Voltage Regulators Removed from the scope of Work Under the 3-Lot and 4-Lot Contracts, Representing the Amount of US$134,080.00

369.
The Claimant claims the cost of four failed voltage regulators at US$28,555.00 each as well as the cost of providing input and output protection for the three remaining regulators. The Claimant estimates the price of output protection units to be the same as that of input protection units and claims a total of US$134,080.00.290 The Claimant submits that the Respondent failed to provide VRs which met the contractual specifications of the Respondent’s Technical Proposal. The Claimant submits that the regulators installed by the Respondent did not have input and output protection as evidenced by their failures. The Claimant refers to its letter of 2 April 2001 reporting damage to the controller circuit board "during inrush surges" and the VR’s control card being "burnt".291
371.
According to the Respondent the installed VRs met all contractual specifications. The failure of the regulators was the result of the power fluctuations into the Claimant’s airport sites.292 This is reflected in the Respondent’s letter of 29 October 2001:

With regard to the failures that have occurred on the Voltage Regulators, we draw your attention to attachment 1 which is a printout of a voltage surge from the Voltage Analyzer installed at Sharm El Sheikh.

The section of chart shows that at 03:-- am on 12 September 2001 the incoming main power (nominal 380V) experienced a voltage surge of 761.9V and an accompanied current surge of 488 amps from a nominal load current of 73 amps.

The output voltage regulation specification of the voltage Regulator is designed to maintain a nominal 380V plus or minus 5% with input voltage between +15% (437V) and -25% (285V). The voltage surge that was experienced was +200.5%, which is more than double the nominal.

The Voltage Regulator is not designed to withstand such power surges. Northrop Grumman is not responsible for the commercial power to the buildings. It is recommended that NCANS install a surge protector to protect the voltage regulator from these input power surges. A quotation from EM for this type of protective equipment is forwarded under Attachment 2. Recommend you contact them directly for further information.293

372.
The poor power conditions brought to the attention of the Claimant on numerous occasions.294
373.
The Tribunal finds that the Claimant has not discharged its burden of proving that the VRs failures were due to the absence of any contractual specifications. The Tribunal considers that the failures in respect of the regulators may have been caused by the fluctuations in the power supply to the airport sites, which is the responsibility of the Claimant. The Claimant’s Claim Seven /4 is thus dismissed.

19. Claim Eight: Failure to Replace the Diesel Generator at the El-Arish Site in the Amount of US$58,149.00

374.
The Claimant alleges that the failure of a diesel generator occurred during the 12-month guarantee period and that the Respondent was under an obligation to repair this generator. The Claimant claims the amount of US$58,149.00 under this heading.295
375.
The Claimant submits that Generator no. 2 at the El Arish site exploded on 13 November 2002, as reflected in the Status Check and Evaluation Report conducted at the El Arish radar site on 7 and 8 December 2002, which report states:

The site Engineer reported that the Generator no. 2 was totally damaged. We took picture of the armature to capture the damage. Bits and pieces of the magnetic wire and the permanent magnet are scattered in the enclosure. According to this site Engineer, they heard a big bang from the Generator room when this incident happened.296

376.
The Respondent submits that this generator’s failure was due to the Claimant’s improper maintenance and the Claimant’s failure to provide proper power supply to El Arish.297 The Respondent’s defence to this claim is as follows:

142. As an initial matter, Generator No. 2 at El Arish did not fail as Claimant contends. Rather, as clarified in a conversation between Claimant’s engineer, Mr. Ibrahim El Malt, and Northrop Grumman, the generator failed when the battery ran out of power after a 3 Amp. fuse in the micro-processor controller blew due to Claimant’s failure to maintain a proper power source and to perform routine maintenance on the equipment. The commercial power source at El Arish was Claimant’s responsibility. Indeed, it is well documented that throughout 4-Lot Extension performance, the power supply at El Arish was consistently unreliable and led to manifold defects on the equipment supplied and properly installed by Northrop Grumman. Further, this problem was exacerbated by the lack of any back up emergency power supply at El Arish.

143. The depletion of batteries in Generator No. 2 at El Arish was not covered by the warranty guarantee because its failure was due to normal wear and Claimant’s failure to follow product technical specifications. Furthermore, the alleged failure occurred two years after site acceptance, and, thus, this claim is outside the period of guarantee. Nevertheless, in good faith, Northrop Grumman purchased two additional generator batteries for Claimant and hired a driver to take the batteries to El Arish the same day of the aforementioned telephone conversation.298

377.
The Claimant submits that this failure is different from the problems experienced in 2002 with respect to the generator’s battery.299
378.
The evidence in the record includes the Respondent’s letter of 21 July 2002, signed by representatives of both Parties, which states:

Northrop Grumman respectfully refers the NANSC to the successful generator testing inspection that was performed at Al Arish on the 20th August 2001 during which time the generator batteries were tested and accepted. Since then, and due to the many failures of incoming power at 4-Lot sites, battery problems have been experienced at Al Arish and other 4-Lot sites. These failures are not covered by the warranty because they would be classified as abnormal use. In an ongoing effort to maintain goodwill on this project, Northrop Grumman has to date replaced at its own cost, 8 batteries for the generators; 4 at Taba, 2 at Borg El Arab and 2 at Al Arish.

Please find as attachments two (2) additional batteries for Al Arish, making a total of ten (10) extra batteries supplied. Please note that these will be the last battery replacements that Northrop Grumman will provide until satisfactory progress is made on settling our outstanding payments.300

379.
As of the date of the Claimant’s disclosure of the problem with Diesel Generator no. 2 to the Respondent during its status meeting of 7 and 8 December 2002, the Respondent had already supplied, at no cost to the Claimant, a total of ten extra generator batteries to the airport sites under the 4-Lot Contract, including a total of four batteries to the El Arish site.301
380.
Accordingly, the Claimant’s claim for a replacement Diesel Generator at the El Arish airport site must be dismissed.

20. Claim Nine: Failure to Supply Twelve HVAC Units Access Ladders to Sites Under the 3-Lot and 4-Lot Contracts in the Amount of US$81,132.00

381.
The Claimant claims the value of twelve undelivered roof access ladders for a total of US$81,132.00.302 The Claimant submits that it rejected a trial ladder installed at the Sharm El-Sheikh airport site because its design did not comply with international safety standards. The Claimant accepted the Respondent’s design for alternative access ladders but the Respondent refused to install same unless paid an additional amount of US$6,761.00 per ladder. The Respondent did not install the approved ladders despite the Claimant’s repeated requests.303
382.
The Claimant refers to its letter of 21 August 2000 wherein it advised the Respondent that the ladder installed in Sharm El Sheikh "was not safe/suitable for use in case of emergency" and "is not safe/suitable for use by maintenance/repair staff while carrying simple tools."304
383.
The Respondent claims that it offered to install roof access ladders at no extra cost but that the Claimant unreasonably refused same. According to the Respondent these ladders met with the U.S. Government safety standards.305 The Respondent also submits that there is no specific contractual requirement for the provision of any ladders, nor the specific access ladders claimed under this heading.306
384.
In response to