Mr James D Wing
Mr Michael E Hantman
HOLLAND & KNIGHT LLP
701 Brickell Avenue, Suite 3000
Miami, FL 33131, United States
Tel: +1 305 789 7768
Fax: +1 305 789 7799
Mr Adrian Jones1
Mr Gordon McAllister
CROWELL & MORNING
25 Old Broad Street
London EC2N 1HQ
Essex Court Chambers
24 Lincoln’s Inn Fields
London WC2A 3EG,United Kingdom
Tel: +44 207 813 8000
Fax: +44 207 692 0326
The Hon Charles N Brower
20 Essex Street
London WC2R 3AL, United Kingdom
Tel: +44 207 842 6703
Fax: +44 207 842 1270
Mr Ali Malek QC
3 Verulam Buildings
Gray’s Inn London WC1R 5NT, United Kingdom
Tel: +44 207 831 8441
Fax: +44 207 831 8479
29.1 The Parties shall use their best efforts to settle amicably through consultation any dispute, which may arise from, in consequence of or in connection with the performance or interpretation of any provision of this Agreement.
29.2 Pursuant to 29.1 above, where the Parties fail to resolve such dispute through consultation, within one hundred and twenty (120) days of the date on which such dispute was referred, such dispute shall be referred for settlement to and by:
i. the officer of the Company who is then responsible for the Company’s operations; or
ii. such other officer of the Company as may be designated by the Managing Director of the Company; and
iii. an officer of GORTT who is then responsible for the Project, or such other officer of GORTT as may be designated by GORTT, and,
iv. the officer of SURAL who is then responsible for SURAL’s operations, or such other officer of SURAL as may be designated by the President of SURAL as the case may be.
29.3 Pursuant to Clause 29.2 above, such officers referred to at (i) to (iv) may, if they so desire and agree, consult outside experts for assistance in arriving at settlement of such dispute.
29.4 Provided that any of the officers referred to at Clause 29.2 above is at that time a representative on the Board, the person to whom such officer directly reports shall designate an alternate person, for the purposes of this Clause.
29.5 Pursuant to Clause 29.4 above and within sixty (60) days of the date of the referral of any such dispute to such officers referred to at (i) to (iv), where any officer notifies the Parties that the dispute has not been resolved by referral to such officers or otherwise by agreement between the Parties, such dispute shall be referred to arbitration, to be conducted in Miami, Florida.
29.6 The arbitration shall be conducted by a tribunal of three (3) arbitrators (the "arbitration tribunal") in accordance with the rules of arbitration established by the International Chamber of Commerce in the United Kingdom, in effect on the Effective Date and as modified from time to time.
29.7 The English language shall be the language used in the arbitration. The arbitrators shall be fluent in English and all documents submitted to the arbitrators and to the other Party, and any decision and/or opinion of the arbitrators shall be in English.
29.8 The Parties agree that the arbitration tribunal is hereby authorised to consult with and employ attorneys, accountants or experts that may be deemed necessary to assist them in determining issues or matters of law arising in the course of the arbitration.
29.9 The costs and fees of arbitration shall be determined in the sole discretion of the arbitration tribunal and may be assessed or apportioned to either or both of the Parties in the award.
29.10 The Parties agree that the arbitration tribunal shall have no authority to:
(i) award relief in excess of what this Agreement may otherwise provide; or
(ii) award exemplary damages or any other damages not measured by the prevailing party’s actual damages.
29.11 Any arbitral decision and/or award with respect to any dispute submitted to arbitration shall be final and binding upon the Parties and shall not be subject to appeal.
29.12 Each Party consents to the entry of judgment upon and/or enforcement of any such arbitral decision and/or award by any one or more courts of competent jurisdiction.
29.13 Notwithstanding the termination or expiration of this agreement, the provisions of this Clause shall continue in full force and effect provided that any arbitration proceeding was instituted prior to the expiration of four (4) years of the date of termination or expiration of this Agreement.
30. GOVERNING LAW
30.1 This Agreement shall be governed by and construed in accordance with the laws of the Republic of Trinidad and Tobago and, subject to Clause 29, the Parties hereto submit to the exclusive jurisdiction of the Trinidad and Tobago courts in respect of any dispute or matter arising out of or connection with this Agreement".
a. Declaration of Renda Butler (20 January 2014).
b. Rebuttal declaration of Mr Butler (21 February 2014).
c. Declaration of Kenneth S. Julien (21 January 2014).
d. Rebuttal Declaration of Professor Julien (20 February 2014).
e. Declaration of Alexander Preziosi (21 January 2014).
f. Rebuttal Declaration of Mr Preziosi (21 February 2014).
g. Witness statement of Alfredo Riviere (21 January 2014).
h. Rebuttal statement of Dr Riviere (21 February 2014).
i. Stephen Singh (21 January 2014).
a. Witness statement of Adrian Bernard (17 January 2014).
b. Rebuttal witness statement of Mr Bernard (17 February 2014).
c. Witness statement of Leroy Mayers (20 January 2014).
d. Rebuttal witness statement of Mr Mayers (14 February 2014).
e. Witness statement of Colleen Murray (17 January 2014).
f. Rebuttal witness statement of Ms Murray (13 February 2014).
g. Witness statement of Anand Ramlogan SC (17 January 2014).
h. Rebuttal witness statement of Mr Ramlogan SC (14 February 2014).
Ms Martha Fields (paralegal)
Ms Sally Stauffer (paralegal)
Mr Turner (hearing support)
Ricky Diwan QC
Alan Newman QC
Ms. Vyena Sharma (Attorney in the Attorney-General’s office)
The Arbitral Tribunal
The Hon. Charles N Brower
Ali Malek QC
Ms Beverly James
Ms Gina Rodríguez
(a) Trinidad is a Parliamentary Democracy with the executive being the Cabinet headed by the elected Prime Minister. The Executive and Judiciary are separate and independent of each other.
(b) There is a Standing Committee on Energy chaired by the Prime Minister and comprises the relevant Ministers and their Permanent Secretaries such as the Minister for Energy and Energy Affairs; Ministry of Finance and various technocrats such as the Chairpersons and CEO’s of the Petroleum Company of Trinidad & Tobago Limited; National Gas Company of Trinidad & Tobago Limited ("NGC"); National Energy Corporation and the Trinidad and Tobago National Petroleum Marketing Company ("NPMC"). In 2010 the SCE was reconstituted to comprise the Prime Minister as Chair, the relevant Ministers and as necessary, the Chairmen of Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"), NGC and NPMC.
(c) A Sub-Committee of the Standing Committee on Energy is the Natural Gas Export Task Force and this was headed by Professor Kenneth Julien at the time of Alutrint’s3 formation; the membership of the Task Force includes the Permanent Secretaries of the Ministry of Finance; Ministry of Energy and Energy Affairs and various technocrats. The National Gas Export Task Force ceased to operate in 2010;
(d) The National Energy Corporation ("NEC") is a corporation sole wholly owned by the Government of Trinidad and Tobago and was incorporated under the laws of the Republic of Trinidad in 1979. One of its prime mandates is to develop strategies to monetize the country’s natural gas reserves through business promotion and identifying new industries.
(e) The Ministry of Finance and the Economy ("MOF") is the corporation sole that signed the Shareholders Agreement on behalf of the GORTT;
(f) The Ministry of Energy and Energy Affairs ("MEEA") is responsible for the management of the country’s energy and mineral resources. MEEA presented to Cabinet the proposal for the establishment of the Alutrint smelter and recommended that the MOF negotiate the required equity and loan financing for the project, which was accepted by Cabinet".
"Trinidad & Tobago had been exploring the aluminum business for a long time. GORTT met with and discussed developing an aluminum industry in the country for years with many leading aluminum companies. But my observation was what really attracted GORTT to the Sural Group was that we were in the higher valued added downstream business. Some aluminum smelters produce cast primary products known as ‘sows, ingots or billets’. Others (such as the smelters adjacent to Sural's plant in Venezuela) directly ship to Sural liquid feed aluminum at a significant cost savings. Sural takes its liquid aluminum (not sows, ingots or billets) and creates value added rods, bars and aluminum electrical high tension cables, other wire and automotive parts, which it sells as a final product. I attach materials showing the process in graphic form and a film of the Sural plant. The production of bars, rod and cables is called ‘downstream’ activities. While a new smelter itself would create jobs, the downstream portion creates higher value added products, uses more sophisticated technology, requires better-trained employees, is less sensitive to volatile world commodity price risk and otherwise promotes the sophistication and diversity of the economy".
a. The Parties would form an Alutrint Board of Directors comprising three representatives from NEC and two from Sural.
b. Alutrint would be responsible for the smelter, rod mill, wire and cable plant with another company (yet to be defined) responsible for the Wheel Development Centre.
c. Each party would absorb its own expenses in relation to the development of the project. Any fees to be paid to third parties would be shared on a 60% (NEC) and 40% (Sural) basis on expenses for the proposed smelter. An Alutrint Bank Account would be developed into which the corresponding portions of the overall project development budget would be deposited from each Party. The split of costs is in accordance with the projected ownership share of each participant in the smelter project.
"Dr Riviere indicated that meetings were held with CMEC personnel to obtain financing from Exim Bank of China who has shown interest in financing. Exim Bank has indicated that they are willing to go up to US$400 million, which includes downstream facilities and they wish to make this a turnkey job.
Dr Riviere stated that the initial financing was stated at 5.5% but with discussions the rate could be lessened to 4% which he said is the lowest rate. At a rate of 4% savings of $6 million in interest; $400 million based on 125 tonnes per year - port facilities, manufacturing plants/downstream. Chairman stated that equity must be there for working capital.
... Chairman indicated that he would speak to the Minister of Finance on the release of funds.
Mr. P Saith said that he would communicate with Ms Allison Lewis Permanent Secretary in the Ministry of Finance indicating the need to change the interest rate from 5.5% to 4% in the letter to the Chinese Ambassador."
"The total investment for the overall project cost is estimated at approximately $570M USD. Thirty percent (30%) of which will be provided as equity by the shareholders. The remaining seventy percent (70%) that is being sought through project financing, amounts to approximately $400M USD
It is anticipated that this financing will comprise of Buyers Credit and Concessionary Financing to the National Energy Corporation (NEC) supported by Guarantees from the Government of Republic of Trinidad and Tobago (GORRT). The GORTT therefore requests that the EXIM Bank of China consider financing for the project through these two facilities, with a net effective rate of 4% for a period of five to seven (5-7) years. This we believe should make the project commercially viable."
"Call for Equity - CMEC Mobilisation
Members considered Board Paper No. 2006-05-23 on the above and noted the following:
Originally CMEC’s next payment was predicted to have occurred earlier in 2006. Contractually, a $63,750M USD payment was to have become due upon satisfying two main criteria the Concessionary Loan Agreement and the award of a CEC. However, delays on realizing both of these deliverables, coupled with the benefit of construction during the dry season, have fueled CMEC’s request for this advance funding in the sum of $20 M USD.
Approving this equity call would enable a potential pre-construction mobilization prior to the start of the 2007 dry season. The equity injection will also contribute towards the $45M USD commitment required by the EXIM Bank of China which is based on 15% of an assumed $300M USD Export Buyer’s Credit Loan.
The main potential risk associated with this equity payment would be a non-approval of the project after having committed this equity contribution. This risk may be mitigated by conditionally approving the release of required funds subject to an October 17th 2006, granting of a CEC.
A further risk mitigation measure may be to await a formal commitment from the EXIM Bank, before providing the requested equity... The Concessionary Loan may, however, only be available in the second quarter of 2007.
Members noted that a deferred decision would delay the project by three to six months.
The Chairman noted that the above proposals were all subject to the CEC approval and suggested that the company should look to the shareholders for earlier financing.
The Board, having regard to the recommendations put forward, agreed that a note be prepared for consideration by the shareholders of the proposal made in the Board Paper. However, once a CEC is approved, the Board will support the recommendations of the Board Paper."
"With respect to the said call for equity, the deadline expired on August 15, 2007 by which date Corporation Sole had made its contribution in the sum of $12 Million USD. Sural to date has not provided its share in the amount of $8 million USD despite your written commitments to do so by 15 August 2007 (reference email copied to Corporation Sole on July 16, 2007), as well as subsequent promises of October 15, 2007 and November 28, 2007, as articulated and minuted in Alutrint Board meetings.
In the circumstances and in accordance with clause 26 of the Shareholders Agreement, Notice is hereby given to SURAL to rectify this material breach of the Shareholders Agreement. Based on your prior acknowledgements of due dates, we hereby request immediate rectification of the said breach."
"On the matter of outstanding equity owed by SURAL the Chairman confirmed that Corporation Sole by letter dated December 10, 2007 notified SURAL of its breach of the Shareholders Agreement for failure to pay up moneys pursuant to that Agreement."
a. The Shareholders’ Agreement being "suitably modified" to remove Sural’s obligations as a 40% shareholder.
b. Sural being repaid its equity investment in Alutrint and GORTT being provided with 100% ownership of the smelter element of the complex.
c. The establishment of a 60/40 GORTT/ Sural NEWCO to build the rod mill, wire and cable plants.
d. The grant to NEWCO of a 20 year contract for 75,000 tonnes per year at a discounted price from the new smelter once it is in production.
e. Sural being given an option to purchase a 40% share in the smelter to be exercised within 3 years.
"I was concerned that the legal challenges could delay the project for years with resulting cost escalations and with the project burdened by the unbudgeted costs of Alutrint staff that would be severely underutilized. I became even more concerned when GORTT removed Mr. Butler from his position as Alutrint's managing director. The cash draw-down schedule attached to the [the Shareholders’ Agreement] had limited the equity contributions of both Sural and GORTT to a total of US $140 million. That amount would be insufficient if delays caused substantial cost overruns, overruns that were already occurring by the summer and fall of 2007.
While I was searching for a solution, I stated in board meetings that Sural would contribute its US $8 million despite my diminishing confidence that the legal proceedings would be resolved as quickly as GORTT officials confidently predicted (and the inevitable cost overruns which would therefore follow). Sural had already paid approximately US $6 million to Alutrint or for its benefit. I finally concluded that Sural could not pay an additional US $50 million for a project whose construction had not commenced but whose budget assumed it had. The project needed to be restructured".
"On December 18, 2007, Mr. Riviere made arrangements for the payment of the US $8 million so there could be no question of a default, no matter how unjustified the claim was. [...] Two days later the Alutrint board met. Colleen Murray, Alutrint's counsel, informed the board that October 2008 was a possible date for the start of trial concerning the permit. [...] It was further disclosed that Alutrint had been running a deficit simply due to its administrative costs at the rate of US $5.2 million per year and that an additional cash injection from shareholders would be required just to meet expenses through the end of March. These facts cemented Sural’s decision to seek disengagement from the smelter project".
"I am very anxious to receive a response to this letter in order that the necessary legal steps be made to provide for this disengagement before April 10, 2008.
The reason for my anxiety for seeking formal disengagement before April the 10th is based upon the fact that at this date Sural can be unilaterally removed from the entire project, because of not meeting fully its commitment for equity at that date, for reasons already disclosed to you. If this happens the project will be delayed even further as there is no agreement in place between the GORTT and Sural for this investment."
"We have considered your request to restructure the Project due to your inability to meet your equity requirements. We now advise that in accordance with Clause 26.1 of the [Shareholder’s Agreement] dated 3rd July 2007 we are amenable to terminating by mutual agreement. We are prepared to have this termination take effect from 2nd April 2008.
To date we are unable to confirm the exact value of your investment as a full audit of Alutrint Limited’s accounts must first be conducted. Thereafter we will be in a position to refund whatever monies are due to you."
"In response to your letter dated May 23, 2008, we are pleased to submit a binding proposal to be an Equity Partner in the Alutrint Aluminium Complex ("the Proposal") in connection with a potential acquisition of 60% of the Alutrint shares. This proposal is presented by a joint venture ("NewCo") formed by Votorantim Metals Ltda. ("Votorantim") and Sural C.A. ("Sural"), the "NewCo" and GORTT to be referred to herein as the "Shareholders".
The Proposal is subject to the following terms and conditions:
- Negotiation of a mutually acceptable Shareholders Agreement, upon GORTT taking 40% of the project and NewCo the remaining 60%
- Execution of an energy supply contract, on the bases presented in the attached Proposal.
- Execution of Power Plant Construction and Operation Contract by GORTT with an experienced Power Plant Operator.
- Resolution of certain environmental issues with respect to the smelter, port, and power plant as may be identified.
- A negotiated contract for the construction of the smelter project between GORTT, NewCo and CMEC."
"Further to our discussions, this letter will confirm Sural’s commitment to participate, together with Votorantim in the Alutrint Aluminium Complex Project ("the Project"). While we are currently negotiating a memorandum of understanding ("MOU") to set forth the details of our collaboration, at this time we are prepared to commit to the following terms and conditions, that shall remain unchanged regardless of the final terms of the MOU:
1. Votorantim and Sural will be partners in a special purpose company ("Newco") in which Votorantim shall detain 83.5% of the share capital and Sural shall detain 16.5% of the share capital;
2. Upon winning the bid to be submitted to the Government of Trinidad Tobago (GORTT), Newco will be the Joint Venture Partner with the GORTT in the Project, it being agreed that such joint venture will be constituted with 60% share capital detained by Newco and 40% by the GORTT.
3. Votorantim shall pay Sural a transfer fee equal to US$40 million for its participation in the Project contingent on (i) the beginning of the construction of phase 1 (at which time Votorantim will pay US$ 15 million) and (ii) on the execution of the second phase of the Project at which time Votorantim will pay the remaining amount of US$25 million
4. Finally, it is agreed that Sural shall have a put option and Votorantim shall have a call option regarding Sural’s share capital in Newco, to be exercised by either party at a time to be agreed, but no later than 12 months after beginning of the full operation of the Project, it being further agreed that that the exercise price shall be a fixed pre-determined price of US$ 60 million plus the full amount of equity contributed by Sural to the Project."
"After the world financial crisis, the original proposal presented by Votorantim and Sural was left aside and Votorantim entered into direct conversations with GORTT. As a consequence of these conversations the original proposal will be modified, but Sural wants to strongly express that it continues to be, fully committed to the full realization of the aluminium development in Trinidad and Tobago. Sural is prepared to work with GORTT and Votorantim to facilitate the development, construction and operation of the Alutrint Aluminium Complex. In addition, Sural continues committed to the project and would dedicate available funds to Alutech for the construction and operation of the downstream alloy-rod mill, wire and cable plants and the Development Center for which it currently owns state of the art technology and equipment. As discussed previously, this facility would provide a significant economic impact.
To take these 2 ideas forward, Sural wishes to propose the following:
1. According to the unanimous shareholder agreement article 14.1, Sural offers the sale of 40% of its share participation in Alutrint thus providing GORTT with 100% ownership of the smelter complex.
2. GORTT will proceed with Votorantim for the development, construction and operation of the Alutrint Aluminium Complex.
3. GORTT would detail an agreement with Sural in Alutech for the construction and operation of the downstream alloy-rod mill, wire and cable plants and the Development Center.
4. To assure the viability of its downstream investment (item 3, above) Sural would like to have an option to re-enter the smelter project should Votorantim not proceed with future investments in the Alutrint capital base. In the event Votorantim does not acquire additional equity capital beyond its initial 10% and/or were to express a desire to reduce its ownership in the Alutrint Aluminium Complex, GORTT shall give an option to Sural to substitute Votorantim in the Alutrint structure and would also give Sural similar rights as agreed with Votorantim."
"As regards the specific points raised in your letter, the Government accepts your offer for the sale of 40% of the share participation in Alutrint Limited. On the question of whether Sural had complied with the Alutrint equity call made on July 04, 2007 for the sum of US$20 mn and whether that call was met by the joint proposal from Votorantim and Sural is a matter which will be addressed by Minister of Finance.
With respect to items three and four in your letter, I am requesting the Natural Gas Export Task Force to meet with Sural to discuss these proposals.
Notwithstanding the above and in order to expedite the process I would like to suggest that you make an offer to the Minister of Finance for the sale of Sural’s share participation in Alutrint Limited."
"(D) GORTT acknowledges and agrees that Votorantim’s participation as an equity partner in the Project is based on certain conditions and requirements outlined in the Proposal. This Agreement records the mutual understandings and general agreement of Votorantim and GORTT regarding certain of the terms and conditions in the Proposal for Votorantim’s participation in the Project and certain other matters related thereto. This Agreement reaffirms and amends the Proposal to the extent provided herein".
(i) (Clause 2(a) (iii)): "Termination of Sural Participation. Sural shall no longer be a shareholder of Alutrint and shall have no further involvement or participation in Alutrint or the Project. GORTT shall deliver to Votorantim documentary evidence, in form and substance satisfactory to Votorantim and GORTT, as to the full termination of Sural's involvement in the Project and in Alutrint for so long as Votorantim maintains an equity investment in Alutrint. Such termination shall be without prejudice to the possible future involvement of Sural in the development or the aluminium industry or Trinidad and Tobago, it being understood that Votorantim shall have no obligation to guarantee or to promote Sural’s future involvement".
(e) (Clause 2(f)): Termination of Prior Contractual Arrangements. With the exception of the Smelter Construction Contract, GORTT shall have terminated, or shall have caused the termination of, all existing contractual arrangements with Sural and with CMEC relating to the Project (including any equity participation of, or any contractual commitment by or with Sural) executed prior to the date hereof, including, without limitation, the following:
(i) Memorandum of Understanding, dated March 23, 2005, among GORTT, Sural, the National Energy Corporation of Trinidad and Tobago Limited (NEC) and CMEC;
(ii) EPC Contract, dated December 20, 2005, between Alutrint and CMEC;
(iii) [Shareholders’ Agreement], dated July 3, 2007, between GORTT and Sural Barbados Limited;
(iv) Contract Agreement, dated December 20, 2005, between Alutrint and CMEC, together with the Conditions of Contract (including Annexes);
(v) Technical Specifications (including the Alutrint Aluminium Smelter Technical Design Agreement signed November 4, 2005 and the Engineering Proposal for Alutrint Aluminium Smelter Part 1 - Commercial Documents, dated September 21, 2005; and
(vi) Interpretation Agreement, executed as of December 20, 2005, between Alutrint and CMEC.
Any claims arising from the period prior to the signature by Votorantim of definitive documentation relating to the Project will be GORTT’s sole responsibility and obligation, and GORTT shall indemnify and hold Votorantim harmless with regard to any such claims."
"(a) There was in fact no project because of lack of CEC approval and the prospects of the Court of Appeal reinstating the CEC were not promising and indeed in November 2010 the EMA withdrew its appeal;
(b) There were concerns about the issue of HF standards and whether the revised project (250,000 metric tonnes per year) would be able to comply with the required HF standards;
(c) There were concerns about the economic viability of the project".
"Mr Speaker there has been great uncertainty about both the Alutrint and rapid rail projects. There has been much public criticisms of these projects rising from legitimate concerns. In addition to the health and environmental risk, there is also serious concern as to Alutrint’s viability and the optimal use of our gas. This project shall cease and an alternative strategy will be put into place for the south west peninsula."81
"SURAL have [sic] also sent several letters trying to settle the dispute in an amicably way. Attached are the letters sent in April 21, 2010; June 21, 2010; September 24, 2010; and December 6, 2010.
Since SURAL has not received any response, we conclude that GORTT it is not prepared to settle this dispute and thus the parties have failed to resolve this dispute amicably through consultation.
Pursuant to section 29.2 of the Shareholders’ Agreement, SURAL now calls on GORTT to refer the said dispute for further settlement to and by:
(i) the officer of Alutrint Limited who is responsible for the Company’s operations or such other designated officer;
(ii) an officer of GORTT who is responsible for the Project or such other designated officer; and
(iii) an officer of SURAL.
In the event that GORTT fails to respond to this letter within fourteen (14) days from the date hereof, or notifies SURAL that it does not wish to avail itself of the mechanism set out in section 29.2 of the Shareholders’ Agreement then SURAL will be entitled to conclude that all efforts to settle its dispute amicable [sic] has failed and, in accordance with Clause 29, SURAL intends to refer such dispute to arbitration to be conducted in Miami, Florida."
"[w]e have not had an acknowledgement or even a response to our letter of January 11, 2011. We are of the opinion that we have now exhausted all best efforts to settle amicably through consultation the existing dispute between GORTT and SURAL in accordance with Clause 29.1 of the [the Shareholders’ Agreement],
Subsequently, and in accordance with Clause 29.2 of the [Shareholders’ Agreement], the said letter dated January 11, 2011 referred the dispute for settlement in accordance with the procedure set in the USA. The parties are now required to attempt to settle the dispute within sixty (60) days i.e. on or before March 14, 2011 otherwise a party may notify the other that the dispute has not been resolved.
We reiterate our willingness to meet and settle this matter.
Should the current course of conduct continue, i.e. the failure to meet or respond within the next ten (10) days, we will have no choice but to conclude and notify you that the dispute has not been resolved and refer this matter to arbitration to be conducted in Miami, Florida, in accordance with Clause 29.5 of the [Shareholders’ Agreement]."
A. GORTT as part of its programme for national development and economic diversification, is interested in the investment and employment that an aluminium smelter plant and downstream facilities could provide to Trinidad and Tobago and desires to participate in the ownership of such plant and facilities.
B. SURAL is a major manufacturer of aluminium based products including aluminium, alloy rods, aluminium cables and wires, and aluminium alloy automotive wheels and has knowledge and experience in the planning, design, and engineering of an aluminium smelter plant and downstream facilities.
C. The Parties have agreed to form Alutrint Limited a company incorporated under the Companies Act, Chap. 81:01 with its registered office at the Corner of Rivulet and Factory Roads, Brechin Castle, Couva in the island of Trinidad (hereinafter referred to as ‘the Company’) for the purpose of ownership, construction, commission, start-up, operation and maintenance of the Smelter and the market and sale of the Products (hereinafter referred to as ‘the Project’).
D. The Company is a [sic] limited by shares and is at the time of execution of this Agreement authorized to issue an unlimited number of ordinary shares.
E. The Parties have agreed to become shareholders in the Company and subscribe in cash for shares in the Company in the following proportions (hereinafter referred to as ‘the Shareholders Proportions’):
(i) GORTT - 60% of the total issued shares
(ii) SURAL - 40% of the total issued shares
F. The Company and CMBC entered into an EPC agreement on December 20, 2005 for the engineering, procurement and construction, commissioning and start-up of the Smelter.
G. The parties have agreed to enter into this Agreement for the purpose of defining the relationship between the shareholders in the management of, affairs and dealings with the Company".
"‘Smelter’ means the tangible, intangible and real property of the aluminium smelter plant capable of processing a nominal 125,000 metric tonnes of molten aluminium per annum and which includes an anode plant with annual production output of 75,000 tonnes of anodes, a rod mill, wire and cable plant, downstream facilities and such additional common assets as determined by the Board; together with all improvements, modifications and expansions made thereto;"
"5. PROJECT COSTS & FINANCE
5.1 The Shareholders have agreed that total investment cost to build and commission the aluminium smelter plant, anode plant, the rod mill, wire and cable plant, is estimated to be approximately Five Hundred and Forty Million United States Dollars ($540,000,000) (‘Total Investment Cost’).
5.2 The Total Investment Cost will be financed on the basis of a ratio of approximately seventy (70) percent debt and thirty (30) percent equity.
5.3 Equity contribution from the Shareholders shall be in the Shareholders Proportions and amount in the aggregate to approximately One Hundred and Forty Million United States Dollars (US$140,000,000), to be contributed as follows:
5.4 (i) GORTT - 60%
(ii) SURAL - 40%".
This Agreement shall continue in full force and effect from the Execution Date until the earlier of the first to occur of:
(i) the fifth anniversary of the Execution Date provided that the EPC contract has not come into full force and effect as provided for therein; or
(ii) the fiftieth anniversary date of the Execution Date; or
(iii) termination in accordance with the provisions of Clause 26".
"6. CAPITALISATION and DISTRIBUTIONS
6.1.1 From time to time, as and when the Company requires cash, the Company shall call on the Shareholders to subscribe for shares in the Company, by giving forty five (45) days prior written notice to the Shareholders, of its demand and each Shareholder agrees that upon such demand it shall subscribe in cash for shares in the Company provided such calls for cash are in accordance with:
(i) the maximum equity contributions of the Shareholders as outlined in Clause 5.3 and the Cash Drawdown Schedule; or
(ii) such other amount as may be agreed to by all the Shareholders.
6.1.2 Pursuant to Clause 6.1.1, where the Company calls upon the Parties to subscribe for shares in the Company, the Parties shall subscribe in cash for shares in proportion in their shares held in the Company at that time".
"13.1.2 Thereafter the period referred to in Clause 13.1.1 above and for the duration of the Agreement, if
(a) a Shareholder wishes to sell all or part of the Shares it owns in the Company (hereinafter referred to as ‘the Shareholder wishing to self) the Shareholder wishing to sell, shall notify the other Shareholders by a written notice of sale to this effect; or
(b) a Shareholder receives an offer in good faith from a third party (hereinafter referred to as ‘the external offer’) for the purchase of all or part of its Shares owned in the Company (hereinafter referred to as ‘the Solicited Shareholder’) and the Solicited Shareholder wishes to accept such offer, within ten (10) days of the date of the receipt of the external offer, the Solicited Shareholder shall notify the other Shareholders by a written notice of sale to this effect, forwarding a copy of the external offer.
13.1.3 For the purpose of 13.1.2 above, the external offer is considered to be made in good faith, solely if it is accompanied by a letter of credit issued by a bank confirming the availability of the funds required for the purchase of the Shares held by the solicited Shareholder".
"14. FIRST OPTION TO PURCHASE
14.1 If a Shareholder wishes to sell its Shares pursuant to Clause 13.1.2, the other Shareholder shall have a first option to purchase:
(i) the total number of Shares offered by the Shareholder wishing to sell; or
(ii) the total number of Shares considered by the external offer,
for a consideration equivalent to either of the following amounts:
(a) In the case of the Shareholder wishing to sell, at a purchase price being the higher of their fair market value or three times the invested capital paid by the Shareholder wishing to sell, or
(b) In the case of a solicited Shareholder, at the purchase price and terms corresponding to those provided by the external offer.
14.2 For the purpose of 14.1(a), the fair market value shall be:
(i) Such value as agreed between the parties to the sale and purchase of such shares; or
(ii) In the event the parties are unable to agree on the fair market value, within ninety (90) days after the service of the notice of sale, such sum as shall be certified by appraisers appointed by agreement of the parties to such sale and purchase shall be the fair market value on the date when the notice of sale was served. For all intents and purposes, the costs of the appraisers shall be borne in equal proportions by the parties to the sale and purchase of the Shares and in so acting, such appraisers are instructed to act as experts and not as arbitrators and their decision shall (save in respect of manifest error) be final and binding".
26.1 This Agreement may be terminated by mutual agreement of the Parties or by notice in writing by either Party, upon the occurrence of any of the following events:
(i) Material breach of terms and conditions of this Agreement, by either Party, including failure by a Shareholder to perform its obligations to provide cash in accordance with the Cash Drawdown Schedule;
(ii) If a Shareholder (being a company) becomes bankrupt or goes into liquidation whether compulsory or voluntary (except for the purposes of bona fide reconstruction or amalgamation with the consent of the other Shareholder, such consent not to be unreasonably withheld); or
(iii) If a Shareholder appoints an administrator or if a receiver, administrator or manager has otherwise been appointed;
26.2 (i) Subject to clause 26.1 above, the Party claiming the right to terminate shall give written notice to the party in default, specifying the breach complained of and, if capable of remedy, may require remedy of the breach within one hundred and twenty (120) days of the date of receipt of such notice; and
(iii) In the event that the Party in default fails to remedy, or take reasonable action with a view to diligently and expeditiously remedy the said breach, the Party claiming the right to terminate may, after the expiration of the said one hundred and twenty (120) days notice referred to above, terminate this Agreement.
26.3 This Agreement shall terminate immediately if an effective unanimous resolution is passed by the Shareholders to wind up the Company.
26.4 Despite the expiration or termination of this Agreement, it shall continue to bind the Shareholders to such extent and for so long as may be necessary to give effect to the rights and obligations embodied therein".
32.5.1 No failure or delay by any Party hereto to insist on the strict performance of any covenant, agreement, term or condition of this Agreement, or to exercise any right or remedy, consequent upon the breach thereof, shall constitute a waiver of any such breach or any subsequent breach of such covenant, agreement, term or condition.
32.5.2 No waiver of any breach shall affect or alter this Agreement, but each and every covenant, agreement, term and condition of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof’.
"33.1 Any notices and other communications required to be given under this Agreement shall be in writing and shall be delivered by hand, telegram, telex, facsimile or registered mail, addressed to the Shareholder as stated below"
If to GORTT:
Minister of Finance
Ministry of Finance
Eric Williams Financial Complex
Port of Spain
Attention: Permanent Secretary
Fax: (868) 627 6108
If to SURAL:
Sural Barbados Limited
Attention: Managing Director
Fax: (246) 436 5618
With copy to:
AV Francisco de Miranda
Cristal Piso 9 Torre Oeste
Attention: Dr Alfredo Riviere
President & CEO
Fax: 0 11 582 122 855 377
33.2 Each notice sent by any of the methods specified above shall be effective on the date of actual receipt, with notices given by registered mail being deemed received on the date shown in the return receipt.
33.3 Any Party may change its address or the name of its representative for the purpose of receiving notices, by giving at least ten (10) days prior written notice of the change to the other Party".
1.1 Is the law governing the interpretation of the arbitration agreement in clause 29 of the Shareholders’ Agreement  the laws of Trinidad & Tobago (which follows English law) or US law and is this an issue that the Tribunal has already determined at paragraph 22 of its Ruling of 3 June 2014 as being the laws of Trinidad & Tobago?
1.2 Are the staged pre-arbitration consultation provisions of clause 29 of the [Shareholders’ Agreement] conditions precedent to the tribunal’s jurisdiction?
1.3 Did Sural comply with the conditions precedents and if so what dispute or disputes did Sural refer to arbitration?
2.1 Was Alutrint’s purported equity call of 4 July 2007 duly authorized and valid? If so, did this call operate such that Sural was contractually obliged to contribute USD 8 million of the total equity call of USD 20 million (either within 45 days of the written notice pursuant to Clause 6.1.1 of the [Shareholders’ Agreement] or at all?)
2.1.1 Was the purported equity call of 4 July 2007 pursuant to the [Shareholders’ Agreement] or pursuant to the previous 18 May 2005 letter agreement? If it was pursuant to the 18 May 2005 letter agreement, was the capital call binding on Sural on the basis that it was not a party to that agreement, or otherwise?
2.1.2 To the extent the purported equity call was validly made, did Sural’s purported noncompliance constitute a breach of clauses 5 and/or 6 of the [Shareholders’ Agreement]? Further, or in the alternative, was Sural excused from complying with the purported equity call due to budget increases and contemporaneous restructuring efforts and/or did it cure any failure to comply?
2.1.3 Was Sural in material breach of the SA within the meaning of clause 26 of the [Shareholders’ Agreement] or alternatively in repudiatory and/or renunciatory breach of the [Shareholders’ Agreement] by reason of its noncompliance with the purported equity call and/or decision to seek a restructure of the contractual project and not make any further equity contributions? Is the Government precluded from asserting material and/or repudiatory and/or renunciatory breach by Sural by reason of the application of the doctrines of waiver or estoppel, or otherwise; and whether in relation to budgetary increases, the restructuring efforts, and/or failure to give notice of termination of the Shareholders’ Agreement, or otherwise?
2.1.4 If Sural repudiatorily and/or renunciatorily breached, did the Government accept the breach so the [Shareholders’ Agreement] came to end? If so, at what date? Alternatively, did the Government waive any default or is it estopped from asserting a termination of the [Shareholders’ Agreement]by failing to give notice of a termination, and/or by seeking to progress the Votorantim proposal and/or by otherwise affirming the [Shareholders’ Agreement]?
2.1.5 Did the Government repudiate, renounce and/or materially breach the [Shareholders’ Agreement] by refusing to negotiate with Sural under section 14.1 and/or by cancelling the project in September 2010?
2.2 Did the Parties agree to vary the terms of the [Shareholders’ Agreement], such that Sural could sell its interest in Alutrint to the Government, pursuant to the valuation mechanism in clause 14, notwithstanding the five-year restriction on dispositions under clause 14 by reason of the exchange of correspondence of 9 September 2009 and 2 October 2009? This raises a number of sub-issues:
2.2.1 Was Sural’s proposal of 9 September 2009 a contractual offer for the sale of its interest in Alutrint pursuant to clause 14 (Exhibit 165)?
2.2.2 Was the Minister of Energy and Energy Industries’ letter dated 2 October 2009 a contractual acceptance of Sural’s alleged offer of 9 September 2009?
2.2.3 If the letter of 2 October 2009 was an acceptance, was it binding on the Government notwithstanding the requirements of Clause 31.1 of the [Shareholders’ Agreement], which required any variation to be with the written consent of all shareholders?
2.2.4 If there was a binding agreement did it: (i) amount to a variation of the [Shareholders’ Agreement] such that the five-year restriction contained in Clause 13.1.1 of the [Shareholders’ Agreement] no longer applied; (ii) incorporate the valuation mechanism contained in clause 14 of the [Shareholders’ Agreement]?
2.2.5 Did the Government subsequently breach the [Shareholders’ Agreement] by failing to negotiate a valuation of Sural’s interest in Alutrint, pursuant to clause 14?
2.3 Following a change of government in May 2010, did the new Government’s announcement in the budgetary speech of 8 September 2010 that it intended the project to ‘cease’ constitute a renunciation of the [Shareholders’ Agreement] (Exhibit 189)? If not, did any other conduct of the Government constitute a repudiation of the [Shareholders’ Agreement]? If so, at what date was such repudiation capable of acceptance by Sural?
2.3.1 If the Government did renounce and/or repudiate the [Shareholders’ Agreement], did the Sural subsequently accept this renunciation by its letter of 24 September 2010 or otherwise, thereby permitting Sural to assert a claim for damages for loss of interest in Alutrint? [Shareholders’ Agreement]
2.3.2 Alternatively, was Sural precluded from accepting any alleged renunciation and/or repudiation because the [Shareholders’ Agreement] had already come to an end?
2.3.3 Is Sural entitled to rely upon Clause 27 of the [Shareholders’ Agreement] in the context of its case on repudiation and if so did it comply with the conditions precedent to its application?
3.1 To what relief, if any, is Sural entitled, pursuant to clauses 14 and/or 27 of the [Shareholders’ Agreement], as a result of the Government’s alleged refusal to negotiate a valuation of Sural’s interest in Alutrint? This raises a number of sub-issues that are not specifically addressed in this List of Issues but are addressed in the parties’ written submissions.
3.1.1 What is the amount of Sural’s ‘invested capital’ within the meaning of these clauses to the extent the valuation provisions contained therein are applicable?
3.2 To what relief, if any, is Sural entitled as a result of the Government’s alleged repudiation of the Shareholders’ Agreement?
3.3 From what date should Sural’s alleged damages, if any, be calculated?
3.4 Is the Government entitled to claim damages in the sum of USD 5 million (or such sum as the Tribunal may consider due) by way of counterclaim and/or set off in respect of the Government’s alleged payment of USD 5 million in respect of Sural’s purported failure to pay the equity call of USD 8 million?
3.5 How should costs be allocated in these arbitral proceedings?
3.6 Is either party entitled to interest in respect of any of its claims, and if so, at what rate, and for what period?"
a. The first related to a relief seeking the appointment of an appraiser or to oversee an appraiser determination. However this was not being claimed by Sural by the time of the September Hearing and GORTT’s counsel confirmed that the reservation was no longer relevant [V6. 672].
b. The second concerned a claim in respect of the Joint Proposal of 7 June 2008 however this too was not pursued by Sural and it was confirmed by GORTT that the reservation was no longer applicable [V6,673].
c. The third was a reservation to all claims because it was alleged that clause 29.1 of the Shareholders’ Agreement was not satisfied. This reservation is live and it is considered below.
a. Clause 29.1 requires the parties to use their best efforts to settle any dispute through consultation for a defined period of 120 days from the date on which the dispute was referred.
b. A referral under clause 29.1 requires a notice in writing as mandated by clause 33.1.
c. No contractual termination under Clause 26 took place. Clause 29.1 was never invoked and no notice of a dispute requiring consultation under clause 29.1 was ever issued.
d. There was no waiver of the procedure in clause 29.1.
a. It accepts that section 29 of the Shareholders’ Agreement sets out a three-stage resolution process.
b. Stage 1 is contained in section 29.1 and Sural used its efforts to settle disputes amicably. Reliance is placed on Sural’s letter dated 24 September 201097 to the MEEI and a letter dated 8 November 2010 to the MEEI98.
c. Stage 2 is contained in section 29.2. This was invoked in Sural’s letter of 11 January 2011 to the MEEI99. Reliance is also placed on Sural’s letter of 11 February 2011100.
d. Stage 3 is contained in section 29.5. The filing of its Request for Arbitration constituted escalation of the dispute to stage 3.
a. The decision not to award security for costs would have been the same even if the place of the arbitration was Trinidad & Tobago.
b. On the first day of the September hearing [V1.10-V1. 16], Sural requested that witnesses of fact be barred from attending the hearing until after their evidence had been completed. This request was made by reference to Florida and US law, but the Arbitral Tribunal had power to accede to the request both under the ICC Rules and Trinidad & Tobago law. The Arbitral Tribunal acceded to this request for sequestration of factual witnesses and company representatives [V1.26].
c. The Arbitral Tribunal’s jurisdiction to award costs in favour of the prevailing party is not in dispute.
"In its Ruling on security of 3 June 2014, the Tribunal suggested that the reference to courts of Trinidad & Tobago was a drafting error. GORTT does not accept that it is open to the Tribunal to reach this conclusion since it is not a submission made by either party, no evidence has been put forward to suggest this and no application for rectification has been made. In the circumstances, it is submitted that the issue of construction before the Tribunal does require it to reconcile the question of seat of the arbitration with the parties’ choice of the exclusive jurisdiction of the courts of Trinidad & Tobago subject only to arbitration. GORTT submits that this was a designation of the courts of Trinidad & Tobago as the supervisory courts and hence a Trinidad & Tobago seat of arbitration".
"In addition, it is likely that the submission to the exclusive jurisdiction of Trinidad and Tobago courts in clause 30 was an error, since the clause is headed ‘governing law’."
"First, in October 2009, the Government agreed to vary the terms of the Shareholders’ Agreement, such that it could buy out Sural’s interest in Alutrint, pursuant to clause 14.1 before the expiry of the five-year prohibition. Sural offered to sell its interest to the Government under section 14.1 in a letter of September 9, 2009. In a response letter of October 2, 2009, the Government accepted Sural’s offer. The Government then breached the terms of the varied Shareholders’ Agreement, and specifically its obligation to negotiate a purchase price for Sural’s interest, when in September 2010, the Government’s Cabinet announced its intention to terminate the Shareholders’ Agreement.
Second, and in the alternative, Sural contends that the Government’s renunciation of the entire project constituted a repudiation of the Shareholders’ Agreement, which Sural subsequently accepted".
"WHEREFORE, [Sural] respectfully requests judgment against the Respondent the Government of the Republic of Trinidad & Tobago as follows: (a) the amount of US $56.9 million, the value of its 40% interest in Alutrint in September 2010; (b) in the alternative, damages of three times its invested capital of US $5,730,133 totalling US $17,190,399 million; (c) in the alternative, reliance losses of US $5,730,133 of wasted costs; (d) pre- and post-award interest at the Florida statutory interest rate; (e) legal fees, costs, and disbursements; (f) dismissal of the Respondent’s counterclaim; and (g) such other or further relief as the Tribunal deems just and proper."
a. The exchange of letters dated 9 September 2009106 and 2 October 2009107 constituted a binding contract. In particular, reliance is placed on what is said to be an unqualified expression of assent to the terms of Sural’s offer: "[GORTT] accepts your offer for the sale of 40% of the share participation in Alutrint Ltd". This was recognised by GORTT in its Cabinet Minutes dated 4 March 2010108: "The Minister of Energy and Energy Industries, on behalf of [GORTT] accepted the offer by Sural for the sale of its share participation...".
b. The acceptance contained in the letter of 2 October 2009109 was by MEEI acting on behalf of GORTT. It did not have to be by MOF. Even if MEEI lacked actual authority to accept on behalf of GORTT, it had apparent authority.
c. The parties agreed to vary the 5 year restriction in clause 13.1.1 of the Shareholders’ Agreement.
d. GORTT having accepted the variation to the Shareholders’ Agreement and Sural’s offer to sell its shares pursuant to section 14.1, the parties were obliged to try and agree on a purchase price. The terms of clause 14.1 are set out above.
e. The relief sought by Sural is for damages for breach of contract. It asserts that for damages purposes, September 2010 "is the proper date to calculate Sural’s loss" (Sural Pre-Hearing Brief, paragraph 5.8). As to the correct way of measuring loss, Sural contends: "[GORTT’s] repudiation of the Shareholders’ Agreement entitled Sural to damages pursuant to the formula in section 14. The correct method for determining the fair market value of Sural’s interest is, as both parties’ experts have agreed, discounted cash flow, and not loss of profit" (Sural Pre-Hearing Brief, paragraph 4.28). Reliance is placed on the evidence of Mr Stobart.
a. Sural’s letter of 9 September 2009110 was not an offer pursuant to clause 14.1 of the Shareholders’ Agreement. GORTT argues that "By its letter of 9 September 2009, Sural was sounding out the then Prime Minister about various issues of principle it wanted addressed as a means to resolving the parties’ respective positions,and interests and moving forward" (GORTT, Written Opening Submission paragraph 227(1)).
b. An offer pursuant to clause 14.1 had to be addressed to MOF. The letter of 9 September was addressed to the MEEI. Sural recognised this in Dr Riviere’s letter of 26 October 2009111 stating: "Regarding the offer for the sale of 40% of Sural’s share of participation in Alutrint, I have worked with the financial model and I will make an offer to the Minister of Finance, according to the unanimous shareholder agreement article 4.1 (sic)".
c. "The MEEI was in any event not accepting the proposal that was being put forward and that involved a number of elements, which would need to be worked through. Items 3 and 4 of the proposal which were all interlinked and involved major further commitments on the part of GORTT to Sural, and were not agreed to even on an in principle basis" (GORTT, Written Opening Submission paragraph 227(3)). In other words, the proposal was an umbrella proposal involving a number of elements all of which had to be accepted.
a. As to item 1: it was stated that GORTT "accepts your offer for the sale of 40% of the share participation in Alutrint Ltd". But this acceptance was not complete or unqualified, because it was suggested to Sural that it "make an offer to the Minister of Finance for the sale of Sural’s share participation in Alutrint Limited". This suggests that MEEI was proceeding on the basis that no binding offer had been made by Sural and that it would need to deal with the MOF on the issue of any sale under clause 14.1.
b. As to items 3 and 4: the Minister (Mr Enill) stated "I am requesting the Natural Gas Export Task Force to meet with Sural to discuss these proposals". It is therefore clear that there had been no acceptance of items 3 and 4 and therefore the parties were not in agreement on them.
a. The Shareholders’ Agreement at all times remained effective.
b. Sural did not commit any breach of the Shareholders’ Agreement in not paying the equity call. This is because the equity call was invalid. Alternatively, non-payment was not a material breach and Sural remedied any breach.
c. Sural did not abandon or withdraw from the Shareholders’ Agreement or agree to its mutual termination without compensation.
d. If there was any breach of the Shareholders’ Agreement, GORTT subsequently affirmed the contract.
e. The new Government of Trinidad and Tobago decided to terminate the Project and this intention was made manifest on 8 September 2010120 in a budgetary speech. By reason of clause 12 of the Shareholders’ Agreement both parties were under an obligation to promote and develop the business of Alutrint. As stated in paragraph 4.34 of the Pre-Hearing Brief: "The Minister’s budgetary speech would certainly lead a reasonable person to the conclusion that [GORTT] did not intend to fulfil its obligation under Section 12 of the Shareholders’ Agreement".
f. As to acceptance of GORTT’s alleged repudiation, Sural relies on its letters of 24 September 2010121 or 9 February 2012122. If necessary, it also relies on its Request for Arbitration dated 2 July 2012.
g. As to damages: "As with Sural’s primary case set out above, Sural’s damages for [GORTT’s] repudiation of the Shareholders’ Agreement should be assessed by reference to the value of Sural’s interest in Alutrint on September 8, 2010, the date of the breach. On that date, Christopher Stobart states that Sural’s interest was worth US$ 56.9 million"123.
a. It contends that Sural committed a repudiatory breach of the Shareholders’ Agreement by its failure to pay the equity call on 4 July 2007124 and its decision to withdraw from the contractual project (Written Opening Submissions, paragraphs 289-298 and 336). GORTT accepted Sural’s repudiatory breach by conduct (Written Opening Submissions, paragraph 299-312).
b. Alternatively, GORTT’s Request for Proposals together with Sural’s responsive submission of the Joint Proposal of 7 June 2008125 brought the Shareholders’ Agreement to an end by mutual agreement (Written Opening Submissions, paragraphs 313-314).
c. It contends that if GORTT was in repudiatory breach (contrary to its case) then Sural had no right to terminate because Sural was in continuing repudiatory breach of the Shareholders’ Agreement (having disengaged) and could not rely upon any alleged repudiation by GORTT since it could only demand performance from GORTT if it was willing to continue under the Shareholders’ Agreement (Written Opening Submissions, paragraph 338).
d. Sural cannot invoke the clause 26/27 procedure to claim "fair market Value" for the sale of shares. It cannot prove that the contractual project would have been profitable.
a. Mr Mayers’ explained, by agreeing to the shareholders’ agreement, the parties had agreed to Alutrint making equity calls and the draft shareholder’s resolution attached to the equity call of 4 July 2007138 was unnecessary [V3,290-1].
b. Ms Murray described the draft shareholders’ resolution attached to the equity call of 4 July 2007139 as being probably ‘overkill’ [V4. 397].
c. Mr Butler accepted that, as far as he was aware, Sural did not challenge the validity of the equity call and that the purpose of his note attached to the equity call was to emphasise the importance of expeditious disbursement of the monies [V2,178].
a. First, under clause 5.1 of the Shareholders’ Agreement, the budget was not fixed but was "estimated to be approximately" US$ 540 million. Whilst the total equity calls on the shareholders under clause 5.3 was fixed at US$ 140 million, the Shareholders’ Agreement did not preclude the possibility that the budget would increase.
b. Secondly, in order to impugn an equity call by reason of increases to the budget, the Arbitral Tribunal considers that Sural would have had to satisfy the requirements of Force Majeure within clause 23.1 of the Shareholders’ Agreement. Force Majeure is a defined term of the Shareholders’ Agreement and means "an event which the cause of causes are not reasonably within the control of the Party claiming Force Majeure and which cannot be overcome by the exercise of reasonable diligence...." Sural does not argue that it can invoke this clause and the facts are far removed from a situation where this doctrine can be invoked.
c. Thirdly, the Arbitral Tribunal cannot see any principled basis for arguing that there was an implied term of the Shareholders’ Agreement that a budget increase overrode the equity call obligation.
d. Finally, the Arbitral Tribunal does not gain any assistance from the two American cases relied on by Sural. They are fact specific turning on the wording of the contracts considered and do not establish any point of principle applicable in the present case.
a. The board minutes of 26 April 2007142 under "matters for approval" refer to the equity call. It is also referred to in the section "matters arising". It is clear that the equity call was on the agenda for the meeting for approval under the title of "Disbursement of $20MUSD CMEC Mobilisation Fee".
b. The approval was confirmed in the oral evidence relied on by GORTT. Mr Mayers stated this at [V3,294-5] as well as Ms Murray at [V4,395-8] at [V4. 399-401]. The Arbitral Tribunal therefore rejects Sural’s submission that this evidence did not show approval of the equity call.
c. The approval was also confirmed by Mr Butler of Sural who attended the meeting [V2,175].
a. On 3 July 2007143 the Shareholders’ Agreement was executed. In accordance with the Alutrint Board approval of 26 April 2007144 considered above, on 4 July 2007145 Alutrint wrote to Dr Riviere as President of the Sural Group requesting the cash injection. This letter complied with clause 6.1.1 of the Shareholders’ Agreement and Sural was contractually obliged to comply with the equity call made 45 days following the letter.
b. Sural never complied with the equity call, in breach of clause 6.1.1 and in material breach of the Shareholders’ Agreement within the meaning of clause 26.1(i) of the Shareholders’ Agreement in consequence of which the MOF issued a notice of material breach of the Shareholders’ Agreement requiring remedy pursuant to clause 26 on 10 December 2007146.
c. Sural recognised that it was in material breach of the Shareholders’ Agreement: see its letter of 29 March 2008147.
d. In fact, GORTT never issued a termination notice under clause 26 of the Shareholders’ Agreement.
"The fact that one party is contractually entitled to terminate the agreement in the event of a breach by the other party does not preclude that party from treating the agreement as discharged by reason of the other’s repudiation or breach of condition, unless the agreement itself expressly or impliedly provides that it can only be terminated by exercise of the contractual right."
"Sural had already paid approximately US $6 million to Alutrint or for its benefit. I finally concluded that Sural could not pay an additional US $50 million for a project whose construction had not commenced but whose budget assumed it had. The project needed to be restructured."
"No reason or bad reason given. The general rule is well established that, if a party refuses to perform a contract, giving a wrong or inadequate reason or no reason at all, he may yet justify his refusal if there were at the time facts in existence which would have provided a good reason, even if he did not know of them at the time of his refusal.... The general rule is the subject of a number of exceptions.... Secondly, a party may be precluded by the operation of the doctrines of waiver or estoppel from relying on a ground which he did not specify at the time of his refusal to perform.... However there does not appear to be any separate principle which would preclude a party from setting up a different ground simply because it would be unfair or unjust to allow him to do so."
a. Sural’s failure to pay the equity call of 4 July 2007155 was a breach of the terms of the Shareholders’ Agreement.
b. In an effort to mitigate its losses arising out of that breach and Sural’s withdrawal from the contractual Project, GORTT alone met the cash requirements of Alutrint. In the period 2008 to 2009 GORTT made payments of USD 52.4 million to Alutrint following Sural’s disengagement, 40% of which should have been paid by Sural.
c. Out of the funds provided by GORTT, Alutrint authorised the payment of USD 5 million to CMEC to partly make up for the shortfall of USD 8 million from Sural in respect of the breach of equity call: see Alutrint Board Minutes of 11 May 2010156.
d. GORTT is therefore entitled to be compensated in respect of those funds that should have been paid by Sural in fulfilment of its obligations had it not disengaged from the contractual Project and which GORTT paid in mitigation: see Chitty on Contracts (31st Ed) at 26-099.
a. GORTT fails to particularise its claim, and is put to strict proof of their legal and factual sufficiency.
b. No valid equity call was given (for the reasons outlined above). Sural had no liability to pay the equity call.
c. GORTT has failed to adduce any evidence to support its US$ 5 million debt claim against Sural. At no time did GORTT intimate that this sum — which it alleges Alutrint paid to CMEC — would or did constitute a debt on Sural’s part owed to GORTT. There is no provision in the Shareholders’ Agreement which permits one shareholder to make a payment on behalf of another, nor has GORTT adduced any evidence to suggest a variation of the contract to that effect.
d. Mr Bernard’s evidence in his Rebuttal Witness Statement at paragraph 12 that: "Alutrint paid part of the shortfall in respect of Sural’s non payment of the equity call, in the amount of USD 5 million on 12 May 2010 from funds that had been contributed by GORTT" is not supported by any documentary evidence.
"Article 37: Decision as to the Costs of the Arbitration
1) The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court, in accordance with the scale in force at the time of the commencement of the arbitration, as well as the fees and expenses of any experts appointed by the arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration.
3) At any time during the arbitral proceedings, the arbitral tribunal may make decisions on costs, other than those to be fixed by the Court, and order payment.
4) The final award shall fix the costs of the arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties.
5) In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.
a. The Arbitral Tribunal has jurisdiction to award prevailing party attorneys’ fees and costs pursuant to US federal law of Florida’s state arbitration code (Sural Post-Hearing Brief paragraphs 16.5 - 16.7). Clause 29.9 of the Shareholders’ Agreement confers a power on the Arbitral Tribunal to award costs.
b. "Recognising the Tribunal’s discretion to award costs to either party, Sural request that it be awarded its reasonable costs to be paid in full by the Respondent" (Sural Post-Hearing Brief, paragraph 16.8).
a. Sural’s claims should be dismissed and GORTT’s counterclaim awarded and that it should be awarded all of its substantial costs.
b. Sural had put GORTT "....to enormous costs in addressing manufactured and contrived claims, wide ranging and wild factual and expert allegations, and shifting allegations that continued to change even at the evidentiary hearing". It relied on allegations that Sural had made in submissions but which were not pursued by the time of the September hearing (Post-Hearing Brief at para 129 ff).
c. GORTT should be awarded all or the majority of its costs, not only if it entirely succeeds, but also more generally to take account of the matters which it identified in its Post-Hearing brief.
a. Legal Costs of AFA Law inclusive of Disbursements: £1,294,541.50.
b. Experts Costs (Forensic Accountants) £277,080.73.
c. Witness Expenses: £28, 297.46.
d. ICC Administrative Expenses and Arbitrators’ Fees: £254,959.46.
e. Transcription Costs: £4,777.09.
(1) The place of the arbitration is Miami, Florida, USA.
(2) Sural complied with clause 29 of the Shareholders’ Agreement before commencing this arbitration.
(3) Sural’s claims are dismissed.
(4) GORTT’s Counterclaim is dismissed.
(5) Sural do pay GORTT:
(a) £1,370,000 representing GORTT’s legal and other costs.
(b) 90% of GORTT’s costs of the arbitration, namely, €288,000.
(6) All other requests and claims are rejected.