42. Thirdly, the Tribunal considers that the Respondent's First Objection can be examined without delving into the merits of the Claimant's claim. The Respondent's First Objection is discrete and focuses on: (i) when the alleged breach occurred; and (ii) when did the Claimant become an “investor of a Party” with an investment in Skyway 127. This is separate from the question of whether there is merit to the Claimant's allegations of breach. This is also separate from the question of whether the Claimant knew or should have known about the alleged breach, and/or the loss or damage arising from the breach.
43. With regard to the Respondent's Second Objection however, it is not yet clear to the Tribunal whether it would be able to determine this objection without delving into the merits of the Claimant's claim. At the heart of this objection is the question of whether the Claimant knew or should have known about the alleged breaches, as well as the loss or damage arising out of those breaches, more than three years prior to the filing of its Notice of Arbitration. On one hand, this could well be a relatively straightforward issue for decision on a preliminary basis. The Respondent's case is simply that the Claimant's allegations should have been known to the Claimant based on information that was publicly available prior to 1 June 2014, including the numerous public documents used in the Mesa Power arbitration and the Mesa Power submissions. On the other hand, depending on the evidence which the Claimant intends to adduce, the Tribunal may be required to substantially engage in the facts of the dispute, and to establish certain facts and connections between these facts. This may also involve significant testimony from, and cross-examination of, witnesses. In that case, the inquiry would be best conducted together with the merits phase when the Tribunal has the benefit of the entire record.
44. In the premises, the Tribunal grants the Respondent's Renewed Request for Bifurcation, at least with respect to the First Objection. However, with respect to the Second Objection, the Tribunal finds that it would be able to better assess whether this objection should similarly be decided on a preliminary basis after it has had sight of the Claimant's Counter-Memorial on Jurisdiction. The Tribunal shall therefore determine the scope of the bifurcated jurisdictional hearing after the Claimant's Counter-Memorial on Jurisdiction is filed.
On 19 November 2020, the Tribunal, in light of its decision in PO 8, informed the Parties that it was considering a three-day period in September 2021 for the bifurcated jurisdictional hearing, and invited the Parties to indicate (i) the number of days that they expect to require for the hearing; and (ii) whether they would be available during the dates the Tribunal was considering.
By letter dated 23 December 2020, the Tribunal rejected the Claimant's submissions concerning the procedural calendar, including its proposal for document production in the preliminary phase of proceedings, and “confirm[ed] that, in accordance with PO1 and PO8, the Claimant's Counter-Memorial on Jurisdiction shall be due on 11 January 2021. Thereafter, after determining whether the Second Objection will be addressed in the preliminary phase of the proceedings, the Tribunal shall fix the deadlines for the remaining procedural steps in accordance with the procedural calendar set out in Annex 1 of PO1.” The Tribunal further requested all parties to tentatively reserve at least five days, from 15 to 19 November 2021, as potential dates for the hearing, and noted that it would confirm the length of the bifurcated hearing once it has decided on its scope.
|Claimant's Reply on Jurisdiction||1 March 2021|
|Tribunal's Decision on Scope of Bifurcated Phase of Proceedings||[TBD]|
|Respondent's Rejoinder Memorial on Jurisdiction||+ 45 days|
|Submissions of the United States and Mexico Pursuant to NAFTA Article 1128 (if any)||+30 days|
|Responses to 1128 Submissions (if any)||+15 days|
As stated in PO 4, the Tribunal is guided by three relevant considerations in the exercise of its discretion to bifurcate. These considerations are (i) whether the jurisdictional objection is frivolous; (ii) whether the objection, if successful, would materially reduce the time and costs of the proceeding; and (iii) whether the objection concerns issues intertwined with the merits of the arbitration.
Having carefully considered the submissions of the parties, the Tribunal concluded in PO8 that these considerations favour a bifurcation of the proceedings, at least with respect of the First Objection.
As for the Second Objection, the Tribunal decided in PO 8 that the Second Objection could not be said to be frivolous, and if successful, could potentially dispose of the totality, and if not, essential parts of the Claimant's claim. However, at the time PO 8 was issued, it was not yet clear to the Tribunal whether it would be able to determine this objection without delving into the merits of the Claimant's claim. Consequently, the Tribunal held that it would determine the scope of the bifurcated jurisdictional hearing after the Claimant's Reply on Jurisdiction is filed.
As the Tribunal observed in PO8, at the heart of the Second Objection is the question of whether the Claimant knew or should have known about the alleged breaches, as well as loss or damage arising out of those breaches, more than three years prior to the filing of its Notice of Arbitration. Based on the Parties' submissions on jurisdiction to date, this issue appears to be relatively straightforward and one that is suitable for decision on a preliminary basis.
a. The Respondent's Renewed Request for Bifurcation is granted in respect of both the First Objection and the Second Objection; and
b. The issue of costs arising from the Respondent's Renewed Request for Bifurcation is reserved to a further order, decision or award.
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