It is necessary that the affairs of... IPAC... be centralized in a company under the name of "The Continental Shelf Oil Company of the Islamic Republic of Iran" which is to operate under the supervision of a Board of Directors appointed by the Ministry of Oil.
The Respondents neither offered any evidence in rebuttal, nor disputed the Claimants' proof. Based on the evidence before it and absent any challenge by the Respondents, the Tribunal finds, for purposes of establishing the Tribunal's jurisdiction, that IPAC was by the date of the Algiers Accords an entity controlled by the Government of Iran and, therefore, that claims directed against IPAC are claims against "Iran" as defined in Article VII, paragraph 3, of the Claims Settlement Declaration.
1. Whether Eastman was entitled to charge OSCO higher prices for Dailey Jars rented after 1 November 1978.
2. Whether NIOC is justified in refusing to pay for rentals and services on allegedly inactive rigs.
3. Whether contract 280's volume discount is applicable to the rental of Dailey Jars.
Original discountable amount.. US$2,980,315.75
Discountable amounts of non-payable invoices:
--force majeure.................. (30,226.00)
--post-29 July 1979.............. (15,494.50)
--miscellaneous issues............... (68.00)
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Revised discountable amount... US$2,934,527.25
A reduction in the volume discount that is proportional to this reduction of US$45,788.50 in the discountable amount yields a reasonably accurate revised discount. The Tribunal therefore decides that the volume discount should be US$153,052.
Total of all invoices US$1,578,084.46
NIOC's payments to Eastman (863,797.00)
Eastman concessions in response to NIOC's Memorial (27,524.17)
Corrections7 (874.68)
Non-payable invoices:
--force majeure period (60,622.00)
--post"29 July 1979 (22,628.50)
--miscellaneous issues (35,783.60)
Volume discount (153,052.00)
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Gross amount due US$413,802.51
Contractor's tax deduction (5.5%) (22,759.14)
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Net amount due US$391,043.37
The Tribunal therefore awards the Claimants US$391,043 for the Eastman Invoice Claim. Interest on this sum will run from 19 November 1981, the date of the Statement of Claim.
If any Jar is lost and is not recovered while in the custody of a customer of [Eastman], it will, upon being invoiced by [Dailey], pay the full sales price of said Jar in accordance with the then current price of the Jar, plus the restocking charges and handling charges....
9.01 It is anticipated that from time to time after delivery of Shock Tools to [Eastman], the same be lost or abandoned by [Eastman's] customers during the course of drilling or otherwise. [Eastman] shall promptly notify OPI of such loss and upon being invoiced therefor by OPI it will pay to OPI the export sale price for such lost Shock Tool as set forth in Schedule "A" hereto less Twenty (20%) per cent.
On completion of the Services or on early termination of the Contract as provided for under these General Conditions [Eastman] shall export the Service Plant in accordance with [OSCO's] Materials Procedure in Schedule II hereto or use the Service Plant on another contract with [OSCO] or, with the permission of [OSCO], pay the appropriate customs duties and charges on the Service Plant and obtain a release from the customs authorities which will permit the use thereof for third parties or their sale in Iran....
Before export from Iran of any item of Service Plant originally imported by [Eastman] in the name of NIOC, [Eastman] shall submit to [OSCO's] Representative one original and two copies of a "Request to Export"... signed by [Eastman] together with a copy of the original Customs Import Djawaz8 for each of the items appearing on the "Request to Export."
Paragraph C of the same article, in pertinent part, further provided as follows:
Upon receipt of the "Request to Export" approved by [OSCO's] Representative and endorsed by the NIOC Materials organisation, [Eastman] shall effect shipment in accordance with [OSCO's] directions....
In March or April, 1980, individuals stating that they represented the Oppressed People's Foundation came to Eastman's offices and confiscated the keys to the Eastman office, gate, truck and staff house. I recall that these individuals showed me a document indicating that NIOC should be given Eastman's tools. They did not give me a copy of the document. Subsequent to this confiscation the gate to Eastman's yard and offices were [sic] locked and I was not allowed access to the Eastman equipment.
At the Hearing, Bavarsai confirmed to a large extent these statements. However, he was not able to identify more precisely the persons who took control of Eastman's yard in early 1980. Bavarsai testified that he did not remember who signed the document purportedly authorizing the confiscation of Eastman's equipment. Further, when asked on which grounds he concluded that the individuals stating that they represented the Foundation actually had the authority to take over Eastman's facility and equipment, Bavarsai explained that since the document he was shown by these persons was "officially typed in Farsi and signed," he assumed that it was an "official letter" from the Foundation. Bavarsai then rectified a previous statement, made in his affidavit, and said that a copy of this letter actually was given to him, and that he sent it to Eastman's office in Athens. The Claimant asserts that it has searched its files but has not found any evidence of such a letter. The Tribunal notes that this document is not in evidence.
The original prerequisite for tool export was to follow instructions contained in the "Materials Procedure" clauses in our contract. It required copies of import forms and an inventory to accompany the permission to export forms. We complied fully with this requirement.... (emphasis added)
(1) the requirement that Eastman establish credit with OSCO;
(2) a reconciliation of Eastman's invoices with OSCO's payments;
(3) the issuance of a letter to this effect by Dabir Hajian Tehrani, a high-ranking NIOC official; and
(4) finally, the examination of Eastman's export request by a three-man NIOC committee in Tehran ("the Conditions").
The establishment of the Conditions by NIOC is described in the two McMillan affidavits (see supra, para. 32). In his testimony at the Hearing, McMillan fully confirmed these statements. The Claimant also offered contemporaneous documentary evidence on this point, among which the Tribunal considers the McMillan Memorandum to be of particular relevance. In October 1979, McMillan reported to his supervisor in Athens on the subject of Eastman's tool export application. This report stated that:
We complied fully with this requirement [i.e. to follow the provisions in OSCO's Materials Procedure regarding tool export].... Then came the stipulation that we sign our original contract effective May 1977 through April 1980. We did this. Next, OSCO stated that it would be necessary for EW to establish credit with OSCO; we did this via clearance of invoices. Now however, they insist that a full reconciliation be issued by them and a cover letter be issued by Assistant Vice-President and Deputy Chairman, Mr. Tehrani.... Our "case"--application for tool export--will be presented to a three-man N.I.O.C. committee on November 1, 1979 in Tehran, by Mr. Sadri himself, a member of the committee. He stated very strongly to me that OSCO had illegally withheld permission to export, procedure for which is outlined in our contract....
We still do not agree with you[r] contention that our drydocking of Sept 76 does not fulfill our requirement to drydock this vessel [Maryam] however for the sake of good relations with IPAC we will agree to pay a fixed amount prior to the vessel going on drydock.
Noting that IPAC had "previously agreed to compensate [Seahorse] for downtime," Seahorse offered to pay US$17,941 for the drydocking of the Maryam. This amount represented the average cost per vessel of drydocking the Ladan and Laleh, US$34,225, minus US$16,284 for accumulated downtime. The telex also informed IPAC that the surveyor's estimate for the cost of repairs to the Ladan and the Laleh was US$1,830 and US$3,570, respectively. Seahorse called these amounts "reasonable" and agreed to pay them. IPAC rejected this offer and continued to withhold payment of the July 1978 invoices.
Invoice No. Subject Amount
----------- -------------------------- -------------
12755"23 Laleh, July 1978 US$ 29,140.00
12757"23 Ladan, July 1978 29,140.00
12907"23 Ladan repairs 14,550.57
12908"23 Laleh repairs 7,199.99
12759"23 Maryam, July 1978 32,612.00
13297"23 Coral Seahorse survey 100.84
10408"38 Coral Seahorse credit (1,135.47)
10587"38 Emily L. credit (67.40)
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TOTAL CLAIMED BY SEAHORSE: US$111,540.53
Invoice No. Subject Amount Payable
----------- ----------------------- --------------
12755"23 Laleh, July 1978 US$27,537.00
12757"23 Ladan, July 1978 27,537.00
12907"23 Ladan repairs 0.00
12908"23 Laleh repairs 7,199.99
12759"23 Maryam, July 1978 30,818.00
13297"23 Coral Seahorse survey 100.84
10408"38 Coral Seahorse credit (1,135.47)
10587"38 Emily L. credit (67.40)
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TOTAL OWED TO SEAHORSE: US$91,989.96
The Tribunal awards Seahorse US$91,990 for the Seahorse Invoice Claim. In view of the dispute between the Parties over these invoices and other charges, the Tribunal decides that the interest on this amount should run from 19 December 1979, the date of IPAC's telex to Seahorse, see supra, para. 132.
It is our intent to have Fast Shipping present IPAC with the final SIO clearance certificates at which time we would like IPAC to present a check to Fast Shipping in the name of Eastern Offshore Boats for the amounts retained.
Have paid off to insuance [sic] and obtained clearance which delivered to IPAC who require 2/3 weekstime [sic] to deliver your cheque to us stop shall keep you advised of any development.
Considering that the matter of SIO refund is only a portion of total funds due from IPAC, and considering current exchange regulations we are unable to see how payment of SIO to Fast Shipping would satisfy our claims. Therefore, we cannot authorize you to make any payments to Fast Shipping in settlement of our accounts.
The record contains several subsequent communications between the Parties. See supra, paras. 127, 132, 134. In none of them, however, do the Parties mention Seahorse's retention money.
THE TRIBUNAL AWARDS AS FOLLOWS:
A.
(i) The Respondents, THE ISLAMIC REPUBLIC OF IRAN and NATIONAL IRANIAN OIL COMPANY, are obligated to pay to the Claimant, EASTMAN WHIPSTOCK MANUFACTURING, INC., the amount of Two Million Four Hundred Fifty Three Thousand Six Hundred Thirty Eight United States Dollars and Fifty Cents (US$2,453,638.50), plus simple interest at the rate of 9.5 percent per annum (365-day basis), calculated as follows:
on US$391,043 from 19 November 1981;
on US$322,092 from 19 January 1980;
on US$1,740,503.50 from 10 February 1980,
up to and including the date on which the Escrow Agent instructs the Depository Bank to effect payment out of the Security Account.
(ii) The Counterrespondent, EASTMAN WHIPSTOCK MANUFACTURING, INC., is obligated to pay to THE NATIONAL IRANIAN OIL COMPANY the amount of Two Thousand One Hundred Sixty Nine United States Dollars and No Cents (US$2,169), plus simple interest at the rate of 9.5 percent per annum (365-day basis) from 15 March 1981 up to and including the date on which the Escrow Agent instructs the Depositary Bank to effect payment to EASTMAN WHIPSTOCK MANUFACTURING, INC. out of the Security Account.
(iii) The other Counterclaims of THE NATIONAL IRANIAN OIL COMPANY against EASTMAN WHIPSTOCK MANUFACTURING, INC. are dismissed for the following reasons:
the Counterclaim for breach of contract, for lack of proof;
the Counterclaim for reimbursement of advance payments, on the merits;
the Counterclaims for social security premiums and taxes, for lack of jurisdiction.
The Escrow Agent is requested to calculate the amounts due under this Award to EASTMAN WHIPSTOCK MANUFACTURING, INC. and to THE NATIONAL IRANIAN OIL COMPANY, and to instruct the Depositary Bank to make payment out of the Security Account to EASTMAN WHIPSTOCK MANUFACTURING, INC. of the net amount due to EASTMAN WHIPSTOCK MANUFACTURING, INC. after offset of the amount due from EASTMAN WHIPSTOCK MANUFACTURING, INC. to THE NATIONAL IRANIAN OIL COMPANY.
(iv) Each Party shall bear its own costs of arbitration.
B.
(i) The Respondent, IRANIAN PAN AMERICAN OIL COMPANY, is obligated to pay to the Claimant, SEAHORSE FLEET, INC., the amount of Two Hundred Twenty Four Thousand Nine Hundred Thirty United States Dollars and No Cents (US$224,930.00), plus simple interest at the rate of 9.5 percent per annum (365-day basis), calculated as follows:
on US$91,990.00 from 19 December 1979;
on US$132,940.00 from 19 November 1981,
up to and including the date on which the Escrow Agent instructs the Depositary Bank to effect payment out of the Security Account.
(ii) The Counterrespondent, SEAHORSE FLEET, INC., is obligated to pay to the IRANIAN PAN AMERICAN OIL COMPANY the amount of Fifty Three Thousand Seven Hundred Sixty Three United States Dollars and No Cents (US$53,763.00), plus simple interest at the rate of 9.5 percent per annum (365-day basis), calculated as follows:
on US$37,745 from 13 November 1980;
on US$15,247 from 24 June 1980;
on US$771.00 from 22 July 1983,
up to and including the date on which the Escrow Agent instructs the Depositary Bank to effect payment to SEAHORSE FLEET, INC. out of the Security Account.
(iii) The Counterclaim of THE IRANIAN PAN AMERICAN OIL COMPANY for social security premiums and taxes is dismissed for lack of jurisdiction.
The Escrow Agent is requested to calculate the amounts due under this Award to SEAHORSE FLEET, INC. and to THE IRANIAN PAN AMERICAN OIL COMPANY, and to instruct the Depositary Bank to make payment out of the Security Account to SEAHORSE FLEET, INC. of the net amount due to SEAHORSE FLEET, INC. after offset of the amounts due from SEAHORSE FLEET, INC. to THE IRANIAN PAN AMERICAN OIL COMPANY.
(iv) Each Party shall bear its own costs of arbitration.
C. This Award is hereby submitted to the President of the Tribunal for notification to the Escrow Agent.
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