Within the scope of its deliberation on the pre-trial matters, the Arbitral Tribunal examined its jurisdiction both of its own accord and due to the challenge to this effect by the Respondent and responded on the matter with the "Decision on pre-trial Matters" dated July 14, 2011. However, due to the particular importance of the matter of jurisdiction it repeats and confirms its decision on this matter together with the justification which follows:
"1. Summary
(a) During its meeting the Arbitral Tribunal decided in its majority that it has jurisdiction to rule on the disputes which arose from the contested contract between the contesting parties, based on the arbitration agreement (clause) contained in Article 28.3, which is valid and it rejected the opposition of the Respondent pursuant what is more specifically presented in the following paragraphs of the present Chapter D and the findings.
(b) The prevailing opinion as to the justification is presented in the following paragraphs, while the minority opinion and dissenting or supplemental justifications are presented in Chapter F below.
2. The arbitration clause (and applicable law)
The jurisdiction of the Arbitral Tribunal is established firstly in the arbitration agreement ("Arbitration clause") found in Article 28 Par. 3 of Contract No. 020A/03 for the Provision of a C4I Olympic Security System and Related Products and Service between the contesting parties dated May 19, 2003 and states that:
"Any claim or dispute which arises from or in connection with this CONTRACT or its interpretation shall be resolved irrevocably by arbitration, in accordance with the Rules of Arbitration of the International Chamber of Commerce - ICC and shall be adjudicated according to Greek Law. The arbitration shall be conducted in Athens, Greece, by three Greek arbitrators who are appointed pursuant to the Rules of the International Chamber of Commerce (ICC), where one Arbitrator is appointed by the PURCHASER, one Arbitrator is appointedby the SUPPLIER and the thirdArbitrator, who shall act as President, shall be appointed by the two appointed Arbitrators or, in the event of disagreement, in accordance with the aforementioned rules."
3. Challenge of jurisdiction / Authority of the Arbitral Tribunal to judge its jurisdiction
(a) The Respondent with its Supplementary answer dated April 20, 2010 and for the reasons referenced therein, asked that the invalidity of the arbitration clause be recognized and as a consequence the lack of jurisdiction of the Arbitral Tribunal, while moreover with paragraph 14 of the Framework Document dated July 21, 2010 it was agreed that for certain pre-trial matters, among which also is the invalidity of the arbitration clause, a separate discussion shall be held and a separate decision be issued. The Claimant sought the rejection of this request with its documents and briefs which are referenced above under A4 and 5.
(b) The Arbitral Tribunal has jurisdiction to deliberate on the matter of its jurisdiction in accordance with Article 6 paragraph 2 of the Rules of Arbitration of the International Court of Arbitration of the International Chamber of Commerce (ICC). Irrespective, however, of the related request of the Respondent, the Arbitral Tribunal is bound of its own accord to examine and to rule on its jurisdiction, before examining any other pre-trial matter or the substance of the dispute.
4. Applicable Law
Given that according to the arbitration clause as well as the Framework Document (paragraph 10) the place of arbitration is Athens, Greek law is applicable to the arbitration, including insofar as the validity of the arbitration agreement and the jurisdiction of the Arbitral Tribunal.
5. The Constitution of Greece
In accordance with paragraphs 1 and 2 of Article 94 of the Constitution of Greece (hereinafter the "Constitution") :
"1. Administrative differences fall under [the jurisdiction] of the Council of State and the regular administrative courts, as the law provides, with the exception of the responsibilities of the Supreme Court of Audit.
2. Civil disputes, as well as cases of voluntary jurisdiction, fall under [the jurisdiction] of the civil courts, as the law provides."
6. The legislative basis for the inclusion of civil disputes in arbitration of the Code of Civil Procedure
Based on these provisions it is clear that for a dispute, whether administrative or civil, to be excluded from the jurisdiction of the courts defined by the Constitution and for an agreement between the parties on this matter (an arbitration agreement) to be valid it is mandated that this be prescribed by law ("as the law provides"). For civil disputes which are subject to arbitration according to the Code of Civil Procedure (CCivP) it is consistently (and without contrary opinion) accepted that their subjection to arbitration is permitted based on the agreement of the parties pursuant to Article 867 of the Code of Civil Procedure and with its provisions. More specifically, when one of the contracting parties is the Greek State, the subjection to arbitration pursuant to the Code of Civil Procedure is based also on Article 49 Introduction of the Code of Civil Procedure and its provisions.
7. Decision 24/1993 of the Supreme Special Court of Greece for the remanding of administrative disputes to arbitration
(a) For administrative disputes however it has been questioned whether they can be remanded to arbitration (and consequently whether the related arbitration agreement is valid) even if this is provided for or permitted by law and more specifically the issue was raised whether such a law is unconstitutional.
(b) This matter was resolved with decision 24/1993 of the Supreme Special Court of Greece in favor of the opinion that in the true spirit of Article 94 Par. 1 of the Constitution, the lawmaker is not prohibited from allowing the inclusion of administrative disputes in arbitration with the agreement between the parties and the relevant law is not unconstitutional.
(c) Based on the above it is therefore accepted that administrative disputes can also be remanded to arbitration provided the law so permits. However, for administrative disputes there is no general provision which allows the inclusion in arbitration similar to Articles 867 of the Code of Civil Procedure and 49 Introduction of the Code of Civil Procedure and for this reason it is examined each time if there exists a law which permits the inclusion of the specific category of administrative disputes in arbitration because, if there is no legislative basis, the arbitration agreement is invalid as it directly contravenes the above provision of the Constitution.
8. The claims of the contesting parties
The Respondent has already raised the issue of invalidity of the arbitration clause with its Supplementary answer dated 4-20-2010 and it expanded on it more specifically with its briefs and statements which are referenced above (under A5) but also verbally during the hearing proceeding on December 17, 2010, while the Claimant raised objections both in respect of the timeliness and admissibility of the substance of the claim concerned, both with its letter dated 4.30.2010 as well as with its remaining letters, briefs and statements which are referenced above (under A4 and 5 respectively) and verbally during the hearing proceeding of December 17, 2010 and supported the validity of the arbitration agreement.
At this point particular reference is made to the Arbitral Tribunal's own investigation concerning its jurisdiction, while within the scope of this self initiated investigation the related claims of the contesting parties are also answered.
9. The Arbitral Tribunal's self initiated investigation
In light of the above the Arbitral Tribunal must investigate of its own accord during the review of its jurisdiction whether the dispute being presented before it is a civil or administrative dispute, and in the case of the latter whether a law exists which would permit the inclusion of the dispute for arbitration or if there is a legal basis which permits the inclusion of the dispute for arbitration regardless whether the dispute is civil or administrative. Specifically in regard to this latter issue, it must be examined whether Law. 2735/1999 for international commercial arbitration comprises a legal basis for the validity of the arbitration agreement contained in the contested contract, a matter which the Claimant also raised with its statement dated January 21, 2011.
10. Clarification of the interpretation of Article 1 of Law 2735/1999 and its subjection to the interpretation and other provisions
In this regard, the Arbitral Tribunal must rule first on whether there exist conditions for the application of Article 1 of Law 2735/1999 and more specifically whether the present arbitration is international and commercial under the definition of this provision. It is notable that in the adjudication of this matter there is no bearing on the matter of whether the dispute of the contesting parties is an administrative dispute or not and this is because the characterization of a dispute as administrative or not or its characterization as international or commercial or not, is made always in the context (Interpretation) of specific provisions in order to determine if they are truly fulfilled so that their legal consequences may be applicable. Thus, what constitutes an administrative dispute is judged as a rule in the scope of the interpretation of Article 1 Law 1406/1983 or of Article 94 paragraph 1 of the Constitution or possibly also other provisions which contain the term administrative dispute.
In the specific case the subject of interpretation is Article 1 of Law 2735/1999 which in actuality does not contain such a term (in other words "administrative dispute"), but the terms "international" and "commercial." Consequently a dispute which in accordance with other provisions is administrative, can be "international" or "commercial" in the scope of interpretation of Article 1 of Law 2735/1999, without this being contrary to the differing characterization of the same dispute in the scope of interpretation of other provisions. The independent interpretation of Article 1 of Law. 2735/1999 is supported also by the fact that in essence this law incorporates into the Greek legal system an international standard and more specifically the UNCITRAL Model Law on international commercial arbitration.
11. Regarding whether the nature of the arbitration is international or not
(1) In accordance with Article 1 of Law2735/1999oncommercialarbitration "the provisions of this law are applicable to international commercial arbitration, the location of which is in the Greek territory" (paragraph 1), "Arbitration is international when: a) the parties have, at the time of signing of the arbitration agreement, their headquarters in different countries..." (paragraph 2) and concerning the application of paragraph 2 "a) if one party has more than one headquarters, its main headquarters is deemed to be the one which has a closer relationship to the arbitration agreement, b) if a party does not have its own headquarters, its usual place of residence is taken into consideration and in the case of a legal entity the place where it maintains offices" (paragraph 3).
(2) Despite the stipulation of the law (use of the definite article "their headquarters" in Article 1 paragraph 2a) which refers to the true headquarters of a company, where its administration is conducted, as it arises from paragraph 3a of Article 1, the law allows for a business to have multiple headquarters, which are branches (special commercial residences) and not to the location of its central management where important business decisions are made (headquarters) which cannot be more than one.
(3) This arises also from the English model document where the term used is "place of business". This arises also from the prelaunch works of UNCITRAL for the Model law regarding international commercial arbitration (See Detailed Commentary on the draft of the Model Law regarding international commercial arbitration in the Report of the Secretary General at the 18th UNCITRAL Summit in Vienna, 3-21 June 1985 UN doc A/CN.9/264/March 25, 1985, hereinafter Model Law Commentary) where it is referenced that the Model Law does not refer to the principal place of business or to the head office, but to the branch through which a specific contract was assumed (See Model Law Commentary, under Article 1 Par. 26 and 27). This is also evident in the United Nations Convention on the International Sale of Goods (Vienna 1980, Law 2532/1997 Articles 1 and 10) the stipulation of which on this point was followed also by the Model Law regarding international commercial arbitration (See Model Law Commentary, under Article 1 Par. 24) and consequently the Convention on International sales can also be used to assist the interpretation, as well as its respective commentary by the Secretariat of the United Nations (See UN document A/CONF.97/5 hereinafter International Sales Commentary under articles 1 and 9 of the Draft now articles 1 and 10 of the Convention).
(4) Concurrently however the law provides that the location is taken into consideration at the time of signing of the arbitration agreement (Article 1 Par. 2a, Law 2735/1999) and if a business has more than one location, then the one that has a closer connection to the arbitration agreement is taken into consideration (Article 1 Par. 3a Law 2735/1999) and such a closer connection exists when the negotiation of the Contract occurred exclusively at one specific location regardless of where the contract was finally signed (Model Law Commentary, under Article 1 Par. 32, See also Article 1 Par. 2 of the Convention for international sales where it is referenced that if the location in one country is not mentioned in the contract or in earlier transactions of the parties or through prior information, then that location is not taken into consideration (See also Article 10 of the Convention on International Sale and International Sales Commentary, under Article 9 of the draft Par. 7 where it is referenced that fulfillment of the Contract at a later date at another location does not have as a consequence a change of the location which has a closer relationship with the agreement). Finally the law (Article 1 Par. 3b Law 2735/1999) also makes reference to where a legal entity maintains offices, which it considers to be a location. It is worth noting however that the UNCITRAL Model Law does not contain a relevant regulation, which [instead] refers only to customary location.
(5) In the case being adjudicated the contested contract no. 020A/03 dated May 19, 2003, as it arises from its text, was contracted between on the one hand the Hellenic Republic and on the other the company SAIC, which as is referenced in the Contract, has its central offices in the city of McLean of the State of Virginia of the USA. This contract however was signed on behalf of SAIC by the Senior Vice President Steven H. Weiss (via power of attorney) who does not have any established location in Greece. Concurrently no reference is made to a location of SAIC in Greece, to involve it any way with the negotiation and assumption of the Contract. The address Kifisias Avenue 90, Amarousio, Attica, which is referenced in Article 30 of the Contract for correspondence, even if it is the address of the headquarters of the Claimant in Greece at that time, is referenced for correspondence which shall be exchanged after the conclusion of the Contract (namely for the interpretation of the Contract Par. 30.2.1, for the execution of the Contract Par. 30.2.2 and for financial matters of the Contract Par. 30.2.2) and it is not evident that any location of the Claimant in Greece was involved in the negotiation and conclusion of the Contract, while the location which is taken into consideration at the time of signing of the contract and is more closely related to the agreement is the one at which the arbitration agreement was negotiated and concluded.
(6) Consequently the location of the Claimant which is evident from the Contract as being the location where the Contract was negotiated and concluded, which is not invalidated by other information, is the USA which is in a different country from the country of the headquarters of the Respondent and consequently the arbitration is international pursuant to the definition given in Article 1 of Law 2735/1999.
12. Regarding whether the nature of the arbitration is commercial or not
(1) Article 1 Par. 1 of Law 2735/1999 expressly states that the provisions of this law are applicable to international commercial arbitration.
(2) The law does not contain a definition of the term "commercial". However, in the Introductory Report of the law it is referenced, among other things, that:
"The same text of the model law, as drafted by UNCITRAL has in connection with the term "commercial" the following footnote which broadens its conceptual boundaries so that it be considered as "financial" :
"The term "commercial" is given a broad definition, so that it may cover matters which arise from every relationship of a commercial nature, contractual or not. Relationships of a commercial nature include- without being limited to - the following transactions : Every commercial transaction for the provision or exchange of goods or services, distribution agreement, commercial representation or agency, factoring, leasing, project construction, licensing, investment, financing, banking, insurance, licensing or assignment, joint venture and other forms of industrial or commercial collaboration, air sea, rail or road transport of goods and passengers". For legislative reasons this footnote has not been included in the text of the proposed legislation, as it was promoted to various countries in adoption of the model law as national law. However this does not preclude it from being an aid in interpretation of the scope of the term "commercial".
(3) Moreover, in commenting on Article 1, the Model Law Commentary references in this regard that the footnote to the term "commercial" was added as an aid to interpretation of said term (paragraph 16) and expresses the legislative intention that the term "commercial" be interpreted broadly (paragraph 18). Further, it is emphasized that this footnote guides the autonomous interpretation of the term "commercial," that the Model Law does not instruct on the characterization of a relationship as commercial in the national legislation of countries, as does the New York Convention of 1958 "for the recognition and execution of foreign arbitration decisions" (Law 4220/1961) in Article 1 paragraph 3 and that it would be a mistake for national views to be applied to the characterization of a relationship as commercial (paragraph 19). Finally, it is clarified that despite the fact that the Model Law does not reference the matter of state immunity, the Model Law also covers relationships in which a government body or a government entity are parties, under the condition of course that the relationship is of a commercial nature (paragraph 21).
(4) Moreover it has been historically emphasized that the term "international arbitration" without any other qualification, refers to arbitration of (public) international law particularly between states and consequently the addition of the term "commercial" distinguishes this arbitration from the arbitration of international law between states1 and although the involvement of trade is one indicator, this is not however primary as states may also participate in commercial arbitration within the framework of a commercial activity2.
(5) Furthermore, it has been emphasized that the definition of commercial is so broad that it encompasses in essence any financial dispute3 and with this definition of commercial disputes in which public entities participate and which originate from their international commercial transactions,mustbe included in the meaning of international commercial arbitration, since of ten the public nature of these entities does not influence the rules governing a contract or an international arbitration to which they are participants4.
(6) In this case the contested contract is a contract for the sale of goods and provision of services and the arbitration for the disputes arising from it clearly falls within the definition of commercial arbitration, as defined in Article 1 of Law 2735/1999 on international commercial arbitration, as this definition is clarified by the introductory report of the law, by the relevant footnote to the UNCITRAL Model Law and in the Model Law Commentary as above). This autonomous interpretation of the term "international commercial arbitration» in Law 2735/1999 is not influenced by, nor does it influence, any interpretation or characterization of this relationship in the scope of definition of any other law.
(7) Moreover and irrespective of the characterization and subjugation of the present arbitration to Article 1 of Law 2735/1999, at the time the arbitration agreement was concluded (and regardless of its admissibility or validity) but also during the negotiation and conclusion procedures of the supply Contract the Respondent was aware of the disputes that may arise from it as international [and] commercial and for this reason agreed to arbitration by the International Chamber of Commerce (ICC) in connection with which Article 1 paragraph 1 of the Rules of Arbitration defines that the function of the International Court of Arbitration of the ICC is the "the settlement by arbitration of business disputes of an international character."
(8) It is worth noting that the reference to disputes to arbitration according to the Rules of Arbitration of the ICC is included not only in said contested supply contract for the C4I Systems but also in the decision of the Ministry of National Defense which awarded the supply of the C4I Olympics Safety Systems (Φ600/AΠ 9092 Σ.16 May 13, 2003, paragraph 24). It is certain thus that this term was also a negotiated point since in the call for tenders for the provision of the C4I Olympics Safety Systems (Decision MINISTRY of NATIONAL DEFENSE Φ600/44139 Σ.23 September 6, 2002) while a provision is made for the resolution of differences through arbitration (paragraph 16) no reference is made to arbitration of the ICC something which was finally included in the award decision. Consequently these facts must also be taken into consideration in the search for the parties true intents both subjectively (Civil Code 173) as well as objectively (Civil Code 200), which leads to the conclusion that (and irrespective of the direct application of Article 1 of Law 2735/1999) and according to the understanding and intent of the parties the disputes which might possibly arise from the contested contract were commercial, subject to the present arbitration.
13. Law 2735/1999 as a legal basis for the lawful assumption of arbitration agreements
(1) In light of the above (under C11 and C12) the present arbitration comprises an international commercial arbitration according to the definition of Article 1 of Law 2735/1999 and is governed by the provisions of said law.
(2) The question however arises whether Law 2735/1999 forms a legal basis for the assumption of valid arbitration agreements, in other words ifit falls within the scope of the "law" as this term is used in paragraphs 1 and 2 of Article 94 of the Constitution ("as the law provides").
(3) Respectively, it must be noted that for private disputes no matter has arisen nor does it appear that any different opinion or question either in theory or in case law that Law 2735/1999 comprises the legal basis which is required by the Constitution (Article 94 Par. 2) for the removal of private disputes from the jurisdiction of the civil courts and their subjugation via agreement to arbitration. It is worth noting also that it is generally accepted without contradiction or challenge to the contrary that international commercial disputes which in accordance with other provisions (of national law) are characterized as private following the implementation of Law 2735/1999 (which is also newer than the Code of Civil Procedure and more specific since it references only certain private disputes, in other words international commercial ones, while Article 867 of the Code of Civil Procedure refers to all private disputes) are included hence in Law 2735/1999 and not in the Code of Civil Procedure. Consequently the legal basis for the validity of the relevant arbitration agreements is found in this law.
(4) Moreover it does not appear that the matter of whether Law 2735/1999 comprises a legal basis for subjugation to arbitration via agreement has yet been addressed in either the case law or in theory of disputes which under other provisions (such as Article 94 paragraph 1 of the constitution or Article 1 of Law 1406/1983) are characterized as administrative disputes but which at the same time and irrespective of this are included according to the above (under C 10-12) as international commercial [ones] in Article 1, and therefore fall within the scope of application of Law 2735/1999. However, for the sake of consistency, the same solution which was referenced above for private disputes must be given to this issue as well. Indeed, the stipulation of the first paragraph of Article 94 of the constitution which concern administrative disputes ("as the law provides") is identical to the stipulation of the second paragraph which concerns private disputes ("as the law provides") and for private disputes Law 2735/1999 is deemed without challenge and without contradictory opinions that it comprises as per Article 94 Par. 2 of the constitution legal basis for valid arbitration agreements. Consequently, also without challenge it must be accepted that the same law comprises the legal basis which is required by the identically stipulated Article 94 Par. 1 of the constitution for the conclusion of a valid arbitration agreement for this category of administrative disputes, in other words for those which concurrently fall also within the definition of international commercial disputes as per Article 1 of Law 2735/1999 (except those for which - as foreseen by Article 1 paragraph 4 of Law 2735/1999- there exist provisions of laws which specifically exclude them from arbitration, which does not appear to be the case for the contested dispute nor has either of the contesting parties claimed anything along these lines).
(5) The recognitionbyLaw2735/1999 of the arbitration agreement as reasons for removal from the civil courts and subjugation to arbitration of the disputes which fall under Article 1 of said law arises from the sum of its provisions, a prerequisite for which is the subjugation of the dispute to arbitration based on the agreement foreseen by Article 7 of the law but which is also expressly provided in Article 8 of said law (the "negative" result of the arbitration agreement, See also Model Law Commentary, under Article 8, Par. 1), which provides that when an arbitration agreement exists the court before which a suit is brought refers the case to arbitration (provided that the related application is submitted in a timely manner) while Article 9 provides that the arbitration agreement does not prevent the court from ordering protective measures, and consequently by disassociation it is concluded also from this provision that it prevents the adjudication of the essence of the dispute by the courts. Finally, same said Article 7 of Law 2735/1999 does not simply describe the term arbitration agreement but also contains the recognition of it as "the important legal document which comprises the basis and justification of an arbitration" (See also Model Law Commentary, under Article 7, Par. 1 and 2-4).
(6) However remanding to arbitration as per Article 1 Law 2735/1999 of international commercial transactions (in other words international provisions) and the Greek State, serves also the interests of the Greek State since if the possibility of a remand to internationally accepted arbitration did not exist many suppliers or providers of services from abroad would hesitate to participate in tenders or negotiations for contracts with the Greek state, which would deprive the Greek state from the capability of negotiating with more candidates and having more selections of better products and the chance of achieving better terms in its agreements.
(7) For this reason many provisions of Greek legislation make the conclusion of an arbitration agreement more desirable (and other terms of agreements by way of derogation restrictions applied to transactions of a purely domestic nature) in the international transactions of the Greek state. Indicatively we reference the exception from the restrictions Article 49 IntroN Code of Civil Procedure (in other words the existence of an opinion of the plenary of the legal council of state) in the case of international transactions (See Article 8 Par. 1 of Legislative Decree 736/1970 and An (Plen.) 8/1996 EMAvq 1996 p. 1052, EEN 1996 p. 32, ΕΝΔ 1996 p. 448, See also other such provisions below) under r14(13) (e) and Γ14(14)(e)).
(8) The fact that Law 2735/1999 does not make an express reference to administrative disputes cannot support the interpretation that said law does not include such disputes (with the argument that if it wished to include them it would contain a related provision), as Law 2735/1999 incorporates into Greek legislation the UNCITRAL Model Law, in other words an international text which could not refer to distinctions of Greek national legislation and which in fact consciously sought to distinguish the characterization of international commercial disputes from any characterization attributed to them based on the national legislation of any country (See also Model Law Commentary, under Article 1, Par. 19). However it also intended to include disputes with state entities (See also Model Law Commentary, under Article 1, Par. 21). Moreover Law 2735/1999 does not make reference either to private disputes but in spite of that the fact that private disputes are subject to it is not challenged. Finally, Law 2735/1999 - and through it the incorporation into Greek legislation of the UNCITRAL Model Law- cannot be interpreted (in other words questioning the intent of the legislator) with arguments derived from other laws such as Law 2717/1999 (Code of Administrative Procedure), which does not contain a provision for the possibility of subjugation of administrative disputes to arbitration such as the Code of Civil Procedure) in relation to which Law 2735/1999 is also newer and more specific, since as per the above analysis it concerns only one category of administrative disputes, namely those which concurrently comprise international commercial disputes in accordance with Article 1 of said law.
(9) In light of the above given that the present arbitration (irrespective of the characterization of the contested dispute according to other provisions) comprises an international commercial arbitration and that the dispute which is brought before [it] [is] an international commercial dispute [sic.], in accordance with Article 1 of Law 2735/1999, it is not necessary to examine whether the dispute brought before it is a private or an administrative dispute in accordance with paragraphs 1 and 2 of Article 94 of the constitution, since in either case it can be subjected to arbitration via agreement, hence the related arbitration agreement is valid and the legal basis for it consists of Law 2735/1999.
14. The validity of the arbitration agreement in accordance with Presidential DecreeΠΔ 284/1989
(1) Additionally the arbitration agreement (clause) contained in Article 28 of the contested Contract is valid in accordance also with Article 69 paragraph 7 of Presidential Decree 284/19895 for the procurement of the armed services, which was also in effect at the time of signing of the contested Contract (Presidential Decree 284/1989 was abolished by Article 71 of Law 3433/2006) and according to its provisions the contested contract was lawfully assumed.
(2) More specifically Article 1 of Presidential Decree 284/1989 states that: "The present Presidential Decree exclusively regulates the procedures for the supply construction works in provisions of services taking place in the interior and the exterior of the nation under the care of the Ministry of National Defense in execution of any of its needs".
(3) Moreover Article 1 Par. 1 of Law 2292/1995 on the organization and operation of the Ministry of National Defense states that: "National defense includes the sum of operations and activities developed by the state aimed at the protection of the national territory, national independence and sovereignty and the safety of the citizens against any external attack or threat, as well as in supportof national interests", while paragraph 3 of the same Article states that "the chief decision-making body for matters concerning exercising defense policy is the Government Council for Foreign Affairs and Defense (KYSEA)» and Article 3 of the same law (duties of KYSEA) states that KYSEA has the authority to approve "the major supply and production programs for defense means and materials" (element c') and to decide "on matters for the regulation of which the cooperation of more than one ministry is required" (element ιη').
(4) Concurrently Article 5 Par. 1 of Law 2833/2000 states that: "7. The security of the Olympic Games is the responsibility of the Greek police, at the headquarters of which is formed a special agency with the title "Olympic Games Security agency" for the central design and coordination of all those agencies involved in matters of security and order in the preparation and execution of the Olympic Games 2004", while paragraph 2 of the same Article states that: "2. For the execution of its mission the above agency cooperates with all those agencies involved i n the preparation and execution of the Olympic Games 2004. The subject and the manner of the cooperation and anything related thereto are regulated by joint decisions of the Minister of Public Order andthe Minister of Culture andother Ministers as the case may be".
(5) Finally Article 1 of Law 2800/2000 concerning the Ministry of Public Order (now ministry of Citizen protection), states that: "The Ministry of Public Order, within the scope of the constitution andlaws, has as a mission: a) the establishment and maintenance of civil order, b) the protection of public and state safety".
(6) From the above provisions it arises that the security of the Olympic Games was assigned pursuant to Article 5 of Law 2833/2000 to the Greek police and consequently it fell primarily under the jurisdiction of the Ministry of Public Order in accordance also with its organizational law. However, this assignment was not exclusive since from Article 5 of Law 2833/2000 (paragraphs 1 and 2) it arises that the proposed Olympic Games Security agency has the authority for "a nd coordination of all those agencies involved in matters of security and order» (Par. 1) and For the execution of its mission the above agency cooperates with all those agencies involved (Par. 2) among which undoubtedly also is the Ministry of National Defense since the safety of the citizens against any external attack or threat also falls under its duties (Article 1 Par. 1 Law 2292/1995) and security measures of the Olympic Games undoubtedly were aimed at the safety of the citizens from external attack during the Olympic Games.
(7) Consequently KYSEA as the qualified governmental agency for the regulation of matters which fall under the duties of the Ministry of National Defense and for which the cooperation of more than one ministry is required (Article 3 Par. 3 item. ιη' of Law 2292/1995) legally according to the authority of each (a) with its decision dated 1/1.23.2003 it authorized the MINISTRY of NATIONAL DEFENSE to directly negotiate with each participant in a previously unsuccessful procedure for the awarding of implementation of the C4I Olympics Security program in accordance with Presidential Decree 284/1989 by application of articles 6 Par. 2θ, 71 Par. 1b and 73 Par. 1b, 13 and 1ζ of same, which expressly references the decision but also in accordance with the provisions of articles 71 Par. Ιa and 1e, 73 Par. ΐη and 76 Par. 1 and 3, which do not reference the decision, the execution of which decision number Φ.600/9024/Σ3 of 1-29-2003 of the Minister of National Defense was issued with which the implementation of the programs approved (Par. 1b) and the program is characterized as "classified" and "urgent", (b) with its decision a no. 2 of 2-27-2003 it selected the joint venture SAIC Team, as the preferred contractor for the continuation of negotiations and (c) with its decision no. 1/3-13-2003 it decided to award the implementation of the C4I programmed to the joint venture SAIC Team, in the amount of 254,999,000 Euro.
(8) So qualified, the Minister of National Defense (based on the above decisions and the above laws) approved the awarding of C4I Olympics Security systems to the company Science Applications International Corporation (in other words the Claimant) with his decision Φ.600/ΑΠ.9092/Σ.16 of May 13, 2003 relevant to which 26 documents (α' - κστ') are listed which are referenced in the previous procedure, in paragraph 1 of the decision a series of provisions (α-ι) are listed also in Presidential Decree 284/1989 «regarding supply, construction, execution of works of the armed forces» (under η) and its authorizing law namely Legislative Decree. 721/1970 «on Financial Considerations and accounting of the armed services» (under α').
(9) And in light of all of the above there remains no doubt that the contested contract was the subject of a negotiation and was assumed in accordance with the provisions of Presidential Decree 284/1989 and that this occurred lawfully and according to the legal procedures as presented above.
(10) Moreover Article 69 (dispute resolution) of Presidential Decree 284/1989 in its paragraphs 1-6, defines an administrative procedure for the resolution of certain disputes particularly in connection with the receipt of provisions. Given that paragraph 7 states that: "Particularly for provisions of major importance, the resolution of disputes is determined by the related contract. In this case there will be a related provision within the specific terms of the relevant call for tenders," the question is raised whether this provision comprises a legal basis for the validity of the arbitration agreement (clause) included in Article 28 of the contested Contract.
(11) Regarding this matter it must first be emphasized that the letter of the provision of paragraph 7 of Article 69 Presidential Decree 284/1989 is clear («for provisions of major importance, the resolution of disputes is determined by the related contract ») and there is no doubt that the provision of the Olympics Security C4I System is a «provision of major importance», while the resolution of the disputes via arbitration is foreseen both by Article 16 of the 6 September 2002 invitation to express interest (MINISTRY of NATIONAL DEFENSE Decision Φ.600/44139/Σ.23 of Sep. 6, 2002, which was issued in execution of the 12-6-2002 decision of the Cross Ministerial Committee Coordinating Olympic Preparedness -ΔΕΣΟΠ, but also find its legal basis in the above referenced provisions for even a partial authority of the MINISTRY of NATIONAL DEFENSE) as well as a Article 24 of the approval decision of the provision (MINISTRY of NATIONAL DEFENSE Decision Φ.600/ΑΠ 9092/Σ.16 on May 13, 2003).
(12) The Respondent however claims that paragraph 7 of Article 69 of Presidential Decree 284/1989 does not authorize a legal basis for the valid assumption of an arbitration agreement (and consequently the arbitration clause contained in Article 28 of the contested Contract is invalid) because said paragraph must be interpreted narrowly due to its placement in Article 69 which (in its entirety) refers only to the administrative resolution of only certain disputes (particularly in connection with taking receipt of supplies) and consequently a different manner of dispute resolution may be foreseen for provisions of major importance, but always disputes similar to the dispute which are referenced in the previous paragraphs and which concern the receipt of supplies and always with an administrative procedure similar to that foreseen by the previous paragraphs of the same Article 69.
(13) (a) however, the customary interpretation, in other words interpretation based on the position of a provision, which the Respondent attempts despite that a certain cases it comprises an interpretive aid in the search for the meaning of a provision, does not suffice to justify a contradictory interpretation (particularly a provision which is so clear) unless it is combined also with other interpretive approaches and particularly a teleological one.
(b) Moreover even from a systematic view point one cannot disregard that paragraph 7 (in an Article with the title «dispute resolution») was found at the end of the article and obviously intended to clarify (so as to achieve different legal handling, in other words a different manner of dispute resolution) the provisions of major importance, and consequently the a contrario interpretation of paragraph 7 in connection with the previous one is what the legislator intended. Whether this different manner of dispute resolution (which is certainly what paragraph 7 intends to achieve) and which will be agreed upon in the Contract must be subject to certain restrictions (as to the type of disputes, namely regarding the receipt and for the administrative type of resolution) there do not appear to be convincing arguments based on a previous paragraphs.
(c) the fact that later (via Article 31 of Presidential Decree 189/1997) an eighth paragraph was added which concerns once again the dispute resolution committees (costs) it does not convince that paragraph 7 also concerns a similar procedure dispute resolution because on the one hand it does not change the fact that paragraph 7 very intentionally seeks to establish a different manner of dispute resolution for the provisions of major importance, in fact a manner to be agreed upon in the Contract and on the other hand the customary interpretation bears some weight of legislative principle while the addition of a paragraph with a subsequent law after paragraph 7 whereas it possibly should have been included before, can very well comprise a legislative defect.
(d) Moreover the historical interpretation (in other words what was provided by the earlier Presidential Decree 785/1978) may aid in the interpretation taking into consideration that Presidential Decree 284/1989 intended to precisely amend and supplement (and translate) Presidential Decree 785/1978. Indeed, Presidential Decree 785/78 in Article 69 paragraph 6 (in its last section which was respective to paragraph 7 of Article 69 Presidential Decree 284/1989) provided that: «More specifically for provisions of major importance from foreign companies, the Committee shall be constituted as provided in the relevant contract, and be entitled to examine also any dispute relating to the interpretation and execution of the Contract».
(e) From this provision (which is another example of a provision where the legislator favors arbitration for the state in international disputes) the objective is also clear (teleological interpretation) as is the purpose of the amended provision (in other words of paragraph 7 of Article 69 of Presidential Decree 284/1989) and the purpose of the modifications. Indeed it is clear that the last section of paragraph 6 of Presidential Decree 785/78 attempted, for provisions «of major importance» «from foreign companies» for the dispute resolution committee be composed not as foreseen by the Presidential Decree for the other provisions but «as foreseen by the relevant contract» (consequently in accordance with the contract it could also be composed for example as foreseen by the rules arbitration of the ICC) and it could «examine also any dispute relating to the interpretation and execution of the Contract» (in other words to have the breadth of a full arbitration such as that foreseen by Article 28 of the contested Contract).
(f) The reason for such a regulation is clear and is that which is referenced in paragraphs C13(6) and (7) above, namely for major procurements many foreign companies are not willing to accept dispute resolution from the committees of the Presidential Decree and/or the courts (something which in the final analysis worked against the Greek state since it limited its candidate suppliers and thus its capability to achieve good procurements under good terms) and for this reason Presidential Decree 785/78 permitted the committees to be composed in a manner which would be agreed upon and which would have the authority to resolve all disputes arising from the contract. The fact that the above regulation of Presidential Decree 785/1978 (in other words arbitration with the agreed upon committee composition for the resolution of all differences from the interpretation and execution of the Contract) is contained in the last section of paragraph 6 of Article 69 (the remainder of which concerns the administrative resolution of disputes regarding receipt) shows that the position of a provision (systematic interpretation) is a much smaller importance than its letter (literal interpretation) in connection with its purpose (teleological interpretation).
(g) with the amendment of Presidential Decree 284/1989, paragraph 7 of Article 69 in actuality broadened (clearly to the benefit of the Greek state) the previous regulation to firstly, apply to all provisions of major importance (in other words even if they are from foreign companies) and secondly that the agreement regulate not only the composition of committees but generally the manner of dispute resolution (in other words either by the regular courts or by arbitration) and in the event of arbitration the form of the Arbitral Tribunal and the entire procedure without the (new) paragraph 7 imposing any restriction as to the subject of the arbitration.
(h) In light of the above, for Presidential Decree 284/1989 (Article 69 Par. 7) to be interpreted a contrario to Presidential Decree 785/1978 (Article 69 Par. 6) and for the conclusion to be made that with the amendment of Presidential Decree 284/1989 the legislator, despite the clear letter of the provision, did not intend to broaden the previous regulation but rather to limit it so that provisions of a major importance cannot be subjected to arbitration for any dispute and with agreed upon dispute resolution bodies, does not serve any purpose as such an a contrario interpretation must not be accepted without being combined with a teleological interpretation as it leads to erroneous conclusions.
(i) In light of the above it is clear that the limitation of the clear letter and the spirit of paragraph 7 of Article 69 of Presidential Decree 284/1989 is not justified.
(14) (a) Given however that Presidential Decree 284/1989 is a Presidential Decree while forthe valid assumption of an arbitration agreement which transfers a dispute from the courts to arbitration, a law is required (in accordance with Article 94 Par. 1 and 2), that which remains to be investigated is the legislative authorization for Presidential Decree 284/1989 and particularly in connection with its capacity to allow the conclusion of an arbitration agreement for disputes which arise from contracts which are assumed via the procedures of Presidential Decree 284/1989.
(b) In this regard it must be noted that Presidential Decree 284/1989 was issued by authorization of paragraph 5 of Article 50 of Legislative Decree 721/1970. More specifically paragraph 5 provided among other things also the following:
"5. Through royal decrees, issued at the proposal of the Ministers of National Defense and Finance, the following are defined in each case of procurement, constructions and works, conducted in the interior of the nation and abroad under the branch of the armed services:"
"k. The procedure for conducting tenders, their awarding, submission and adjudication of appeals"
"v. The manner of inspection and receipt, rejection of procurement, arbitration, as well as the composition, purpose and functioning of central or regional committees for receipt, inspection and arbitration."
"υ. The specific terms and procedures for procurement originating abroad, by way of derogation of the regulations on provisions for the armed services"
« φ. The fees paid to the participating military, civil employees and persons outside the agency, to the committees conducting the tenders, advising, receipt and arbitration."
«ψ. Any other related provision and detail. »
(c) These provisions, via royal and now presidential decrees, provide authorization for the determination of "the manner... of arbitration" (item n) and make reference to remuneration of "persons outside the agency" participating "in committees arbitration" (item φ).
(d) Again, a contradictory interpretation of the term "arbitration "could not be supported with the justification that the historical and even more so neglectful legislator of Legislative Decree 721/1970 (and more specifically the authorizing provision of paragraph 5 of Article 50) did not give a broader authorization for the manner of arbitration but had in mind (and restricted its authorization) exclusively and only to the restrictive advisory arbitration of Article 16 of development law 654/1937 (Α162) in other words the text which had been legislated 33 years earlier and at a time when a binding arbitration agreement was very limitedly accepted even in private disputes, i.e. [it was only accepted] in commercial ones, (See Code of Civil Procedure namely Law 2/14 Apr. 1834 Apr. articles 106-110)6 and indeed the same authorizing provision (namely paragraph 5 of Article 50 of Legislative Decree 721/1970) has been used as a legal basis for arbitration in the last section of paragraphs 6 of Article 69 of Presidential Decree 785/1978 which concerned procurement from abroad and defined binding arbitration for all disputes arising from the Contract and the composition of arbitration committees based on the agreement of the parties which, as per the above, broadened Presidential Decree 284/1989.
(e) Independently of the above however via section υ of paragraph 5 of Article 50 of Legislative Decree 721/1970 authorization is granted for the regulation of specific terms and procedures «procurement originating abroad, by way of derogation from the regulations on provisions for the armed services» (and this is another provision which provides broader capabilities for the assumption of international contracts, including also arbitration [agreements] by way of derogation of the other provisions) while section ψ states that the issued orders may also foresee «any other related provision» including also an arbitration agreement as a related provision.
(f) In light of the above the legislative authorization for paragraph 7 of Article 69 of Presidential Decree 284/1989 (but also the legal basis for arbitration clauses) is found not only in sections n and f of paragraph 5 of Article 50 of Legislative Decree 721/1970 but also in sections υ and ψ of the same paragraph, which is further reinforced by the fact that the contested contract was concluded based on the special provisions of articles 71, 73 and 76 of Presidential Decree 284/1989 which permit "procurement without following the regular procedures" (Article 71 Par. 1) and with "the direct appointment of procurement without tenders" (Article 73 Par. 1) and without a restriction being placed as to the content of the related contracts, allowing also the arbitration agreement.
(g) In light of the above, paragraph 7 of Article 69 of Presidential Decree 284/1989 constitutes a legal basis for the assumption of a valid agreement for remand to arbitration of disputes which arise from contracts of major importance concluded in accordance with Presidential Decree 284/1989 and hence the arbitration clause which is contained in Article 28 of the contested Contract as well. A further legal basis for the permissibility of said arbitration agreement constitute also articles 71 Par. 1 and 73 Par. 1 which in the interest of the Greek state allow in certain instances (including the one being contested) the direct awarding of a procurement [contract] and without following regular procedures and without restrictions as to the content of the related contracts. Consequently the arbitration clause in Article 28 of the contested Contract is valid.
(h) Moreover, since the Respondent itself included an arbitration agreement both in the initial invitation to express interest as well as in the decision for the awarding of the provision and finally in the contested contract, it is obvious that it itself accepts that Article 69 Par. 7 and generally the provisions of Presidential Decree 284/1989 (in accordance with which the contract was assumed) permitted it to enter into a valid arbitration agreement and within the context of proper administration is not acceptable for it to attempt a different interpretation after the fact and to dispute the reasonable expectations of the other party who relied on the validity of the arbitration clause in Article 28 of the contested Contract, which according to the above was also the subject of negotiations.
15. The decision
In light of all of the above it must be accepted that the arbitration agreement contained in Article 28 of the contested Contract is valid and finds legal basis both in Law 2735/1999 as well as in Presidential Decree 284/1989 Article 69 Par. 7 but also in articles 71 Par. 1 and 73 Par. 1. Consequently, The Arbitral Tribunal has jurisdiction to adjudicate the disputes which arise from the contested contract rejecting claims to the contrary by the Respondent.
