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    Interim Award

    [1].
    WE, THE UNDERSIGNED ARBITRATORS, having been designated in accordance with the arbitration agreement entered into between the above-named parties and dated December 29, 2008, and having been duly sworn, and having duly heard the proofs and allegations of the Parties, do hereby, DECIDE, as follows:
    [2].
    By application dated February 8, 2013, Ecopetrol, S.A. ("Ecopetrol"), one of the Respondents in this arbitration, sought what is, in effect, an Order of Specific Performance obliging the Claimant ("Offshore" or "Seller") to reimburse Ecopetrol for certain Value Added Taxes ("VAT") that Savia Peru S.A. ("Savia"), one of Ecopetrol’s subsidiary companies, was compelled to pay to the Peruvian tax authorities for tax years 2002 through 20071. Savia paid these amounts, totaling some $75.3 million, after the tax authorities determined that Savia owed VAT taxes in each of those years.2
    [3].
    Offshore opposes that application on the following grounds:

    1. There is no legal basis for the panel’s issuance of what would be, in effect, a preliminary mandatory injunction because of, among other reasons, the lack of irreparable harm, the inability to show a likelihood of success on the merits and Ecopetrol’s inability to demonstrate a balance of the equities tipping in its favor;

    2. SPA Section 8.4, properly construed, does not apply to the facts upon which Ecopetrol’s application is based; nor does it, in any event, abrogate the requirement of irreparable harm;

    3. Even assuming arguendo a basis for the grant of the requested relief, Offshore’s obligation to reimburse Savia (not Ecopetrol) was excused by Ecopetrol’s prior breach of the SPA;

    4. Ecopetrol’s application is one intended to provide security for any Award which might eventually be rendered in its favor, and approximately $125 million still resides in an escrow account to satisfy any of the Seller’s obligations if it eventually be determined that monies are owed to Ecopetrol.

    [4].
    In response, Ecopetrol asserts that Offshore is wrong on the facts and misconstrues the nature of its application, which is, essentially, one for the specific performance of SPA Section 7.4(d). That Section- - in contrast to SPA Section 8.3 which applies to non-tax indemnification obligations— requires Offshore to pay any taxes immediately when due.3 Section 7.4(d) (argues Ecopetrol) was a bargained-for right which compels the Seller to pay immediately any taxes attributable to the years when the Seller owned the business and, then, if necessary, to arbitrate any disputes surrounding that payment. Thus, the structure of the SPA, including a proper reading of Section 8.4, assigns the out-of-pocket burden to the Seller while any disputes regarding the ultimate liabilities are being arbitrated. Offshore’s breaches of its payment obligations with respect to taxes improperly places the burden of initial payment upon Ecopetrol—or Savia in this case, a company which is being harmed by the need to finance the tax payments pending the resolution of the arbitration. If Offshore proves to be correct in its assertion that these taxes are not owing by reason of the Respondents’ alleged breach of their obligation to cede control of the tax contests to Offshore, or because there will eventually be no (or very limited) damages because the Peruvian courts will compel the tax authorities to reimburse the amounts that Savia has paid, then Offshore will get its money back. In the meantime, however, it is Offshore and not Ecopetrol that must front the taxes pending final determinations.
    [5].
    Assuming arguendo the relevancy of Offshore’s other asserted defenses to Ecopetrol’s application for interim relief, Ecopetrol further argues that SPA Section 8.4 defines the damages that Savia has sustained and will continue to sustain as "irreparable harm." Ecopetrol denies that it has committed a prior breach of the SPA and asserts that it will likely succeed on the underlying merits, and, further, that the balance of the equities tips in its favor. Ecopetrol also contends that the remaining $125 million presently escrowed will be insufficient to cover the remaining non-tax indemnification claims (a fact that does not seem to be contested by Offshore), not to mention the $75.3 million owing pursuant to SPA Section 7.4(d).
    [6].
    After due consideration, the Tribunal determines that Ecopetrol is entitled to an Order enforcing SPA Section 7.4(d) as written and compelling Offshore to reimburse Savia for the VAT taxes assessed and paid in the years in question. This determination is based solely on what the Tribunal views as the unambiguous language of the SPA regarding the payment of funds in advance of the dispute resolution procedure called for in the parties’ agreement. The Tribunal makes no determination at this time regarding the underlying merits of the dispute, including whether or not Respondents breached the SPA by failing in a timely manner to cede control of the tax contests to Offshore.
    [7].
    SPA Section 7.4(a) provides in relevant part:

    (a) Seller shall indemnify and defend the Purchaser Indemnitees [defined in Section 8.2(a) as, among other entities, "Purchaser and their Affiliates", "Affiliates being defined in Exhibit A to the SPA as including companies such as Savia] and hold the Purchaser Indemnitees harmless from and against (1) all liability for Taxes of any PT Group Member... attributable to (A) any Pre-Determination Date Tax Period,...

    [8].
    Savia is one of the PT Group Members as defined in the second WHEREAS clause of the SPA. Exhibit A to the SPA defines the Pre-Determination Date Tax Period as all taxable years and periods ending on or before the Determination Date, which is, in turn, defined as June 30, 2008. All payments that Savia made to the Peruvian tax authorities that are the subject of this Interim Award are related to periods prior to June 30, 2008.
    [9].
    SPA Section 7.4(d) then provides:

    (d) Any indemnity payment required to be made pursuant to this Section 7.4 will be paid within thirty (30) days after an Indemnified Party makes written demand upon an Indemnified Party, but in no case earlier than five (5) Business Days prior to the date on which the relevant Taxes... are required to be paid... to the relevant Governmental Authority. If the Taxes that are contested must be paid under applicable Law prior to or upon commencement of a contest proceeding, Seller shall pay such Taxes to the applicable Governmental Authority prior to or upon commencement of such proceeding.

    [10].
    It is clear from a reading of these two Sections that the burden of initial payment is upon the Seller and not the Purchaser. If a dispute arises over the matter (such as a dispute regarding the alleged failure of the Purchaser to cede control of the tax contest(s) to the Seller pursuant to SPA Section 7), then the Seller must nonetheless pay the tax authorities while that dispute is pending.
    [11].
    The Tribunal is mindful that the case law compels an applicant for a mandatory preliminary injunction in a court of law to carry a heavy burden. This, however, is an arbitration. Arbitrators are not bound to the standards for interim relief set forth in the cases and, may, in appropriate situations, even grant relief that would be unavailable in a court of law .See, e.g., Sperry International Trade v. Government of Israel, 432 F.Supp. 901 (S.D.N.Y.), aff’d, 689 F.2d 301 (2d Cir. 1982). This is especially true in the instant case by reason of SPA Section 10.7(b) which grants the Tribunal broad power to fashion appropriate relief, a power repeated in the
    [12].
    International Dispute Resolution Procedures of the AAA under which this arbitration is being conducted. See, Articles 21(1) and 21(2).
    [13].
    Indeed, the Tribunal reads SPA Section 8.4 as expressly permitting the panel to grant the relief sought. We do not read that Section as restrictively as Offshore urges and instead agree with Ecopetrol that Section 8.4 grants a party "the right to seek specific performance of this Agreement without the necessity of proving the inadequacy of money damages as a remedy." The parties bargained for this provision and are entitled to its enforcement.
    [14].
    Moreover, Offshore is not excused from its obligations under Section 7.4 by reason of Ecopetrol’s alleged prior breach, even if such a breach occurred. Offshore argues that Ecopetrol’s failure to cede control of the tax contests to Offshore excuses Offshore’s obligation to reimburse Savia for taxes paid pending the results of the arbitration. The doctrine that performance of a contract obligation is excused by the other party’s prior breach only applies to the situation of material breach. While the failure to cede control, if such occurred, may well have had costly consequences, such a failure in the Tribunal’s view would not constitute a "material breach" in the context of the overall sales transaction evidenced by the SPA such that the breach would excuse Offshore’s performance of its obligation under Section 7.4. See, Morgan Stanley v. Discover Fin, Servs., No. 603017/08, 2010 WL 334854 (Sup. Ct., N.Y. Cnty. Jan. 4, 2010).
    [15].
    Further, while both Ecopetrol and Savia are substantial companies, the need to finance over $70 million, even temporarily, can well affect a business of any size. The application, therefore, is granted.
    [16].
    WHEREFORE, for the reasons set forth above, Offshore is ORDERED to reimburse Purchaser (including Ecopetrol and/or Savia) for the payments that Savia has made to the Peruvian tax authorities for VAT taxes asserted to be due for the tax years 2002 through 2007 inclusive. This reimbursement shall be made on or before the 30th calendar day after the issuance of this Interim Award.
    [17].
    This Interim Award does not in any way resolve the underlying merits of the dispute among the parties, including, without limitation, whether Offshore would ultimately be entitled to, among other relief, the return of the amounts paid pursuant to this Order by reason of the Respondents’ breach of the SPA, or otherwise.
    [18].
    We hereby certify that, for the purposes of Article 1 of the New York Convention of 1958, on the Recognition and Enforcement of Foreign Arbitral Awards, this Interim Award was made in New York, New York, U.S.A.
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