|FREQUENTLY USED ABBREVIATIONS AND ACRONYMS|
|Claimant||The Renco Group, Inc.|
|Claimant's Memorial||Claimant's Memorial on Liability submitted on February 20, 2014|
|Claimant's Submission, April 3, 2014||Claimant's submission challenging the scope of the Respondent's preliminary objections submitted on April 3, 2014|
|Claimant's Submission, May 7, 2014||Claimant's Reply on the Scope of Respondent's Article 10.20.4 Objections submitted on May 7, 2014|
|Claimant's Submission, October 3, 2014||Claimant's Comments on the Submission of the United States of America regarding the Interpretation of Article 10.20.4 submitted on October 3, 2014|
|Commerce Group v. El Salvador or Commerce Group||Commerce Group Corp. et al. v. El Salvador, ICSID Case No. ARB/09/17|
|Commerce Group v. El Salvador Award||Commerce Group Corp. et al. v. El Salvador, ICSID Case No. ARB/09/17, ICSID Case No. ARB/09/17, Award of March 14, 2011|
|Cremades Article||Bernardo M. Cremades, "The Use of Preliminary Objections in ICSID Annulment Proceedings", Kluwer Arbitration Blog dated September 4, 2013|
|Cremades Letter||Letter to the Tribunal from Mr. Bernardo M. Cremades dated September 16, 2014|
|DR-CAFTA||The Dominican Republic-Central America Free Trade Agreement signed on August 5, 2004|
|First Session||The first procedural session of the Tribunal and the Parties held at the International Dispute Resolution Centre (IDRC) in London on July 18, 2013|
|Herrera Letter||Letter from Mr. Carlos Herrera Perret, Executive Director of PROINVERSIÓN, Peru's Private Investment Promotion Agency|
|ICSID Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings (Arbitration Rules) as amended and in effect from April 10, 2006|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated March 18, 1965|
|Methanex Corp. v. USA or Methanex||Methanex Corporation v. United States of America, NAFTA/UNCITRAL|
|MINCETUR||Peru's Ministry of Foreign Trade and Tourism|
|Pac Rim v. El Salvador or Pac Rim||Pac Rim Cayman LLC v. Republic of El Salvador, ICSID Case No. ARB/09/12|
|Pac Rim v. El Salvador Decision on Respondent's Preliminary Objections||Pac Rim Cayman LLC v. Republic of El Salvador, ICSID Case No. ARB/09/12, Decision on the Respondent's Preliminary Objections under CAFTA Articles 10.20.4 and 10.20.5 of August 2, 2010|
|Parties||The Renco Group, Inc.(the Claimant) and the Republic of Peru (the Respondent)|
|Peru||The Republic of Peru|
|Professor Reisman's Letter||Letter from Professor W. Michael Reisman to Mr. Jonathan Hamilton dated April 22, 2014, Annex A to Respondent's Submission of April 23, 2014|
|RDC v. Guatemala or RDC||Railroad Development Corp. v. Republic of Guatemala, ICSID Case No. ARB/07/23|
|RDC v. Guatemala Decision on Objections to Jurisdiction||Railroad Development Corp. v. Republic of Guatemala, ICSID Case No. ARB/07/23, Decision on Objection to Jurisdiction CAFTA Article 10.20.5 of November 17, 2008|
|RDC v. Guatemala Second Decision on Objections to Jurisdiction||Railroad Development Corp. v. Republic of Guatemala, ICSID Case No. ARB/07/23, Second Decision on Objections to Jurisdiction of May 18, 2010|
|Renco||The Renco Group, Inc.|
|Respondent||The Republic of Peru|
|Respondent's Submission, April 23, 2014||Respondent's submission on the scope of the preliminary objections submitted on April 23, 2014|
|Respondent's Submission, October 4, 2014 (as amended)"||Respondent's submission commenting on the Submission of the United States of America, submitted on October 4, 2014 (as amended)|
|Secretary-General||The Secretary-General for the time being of ICSID|
|Treaty||The United States - Peru Trade Promotion Agreement signed on April 12, 2006|
|UNCITRAL Arbitration Rules||United Nations Commission on International Trade Law Arbitration Rules (revised 2010)|
|Unofficial Translation of the MINCETUR 6th Round Negotiations||Peru's Ministry of Foreign Trade and Tourism ("MINCETUR"), 6th Round of Negotiations in Tucson, Arizona, United States, November 29-December 5, 2004 (unofficial translation)|
|Unofficial Translation of the MINCETUR 7th Round Negotiations||MINCETUR, 7th Round of Negotiations in Cartagena, Colombia, February 7-11, 2005 (unofficial translation)|
|Unofficial Translation of the MINCETUR 8th Round Negotiations||MINCETUR, 8th Round of Negotiations in Washington, United States, March 14-18, 2005 (unofficial translation)|
|USG||The Government of the United States of America|
|USG's Submission, September 10, 2014||A written submission filed by the Government of the United States of America as a non-disputing State Party pursuant to Article 10.20.2 of the United States - Peru Trade Promotion Agreement, submitted on September 10, 2014|
|Vienna Convention||The Vienna Convention on the Law of Treaties, May 23, 1969, Article 31(1), 1155 U.N.T.S. 331|
Members of the Tribunal :
Dr. Michael J. Moser, Presiding Arbitrator
The Honorable Mr. L. Yves Fortier, CC, QC, Arbitrator
Mr. Toby T. Landau, QC, Arbitrator
ICSID Secretariat :
Ms. Natalí Sequeira, Tribunal Secretary
Assistant to The Honorable Mr. L. Yves Fortier CC, QC :
Ms. Annie Lespérance1
Attending on behalf of the Claimant :
Mr. Dennis A. Sadlowski, The Renco Group, Inc.
Mr. Edward G. Kehoe, King & Spalding LLP Mr. Henry G. Burnett, King & Spalding LLP
Attending on behalf of the Respondent :
Mr. Carlos José Valderrama, Ministry of Economy and Finance of the Republic of Peru
Mr. Jonathan C. Hamilton, White & Case LLP
Ms. Andrea J. Menaker, White & Case LLP
Mr. Maricarmen Tovar Gil, Estudio Echecopar
Mr. Jacob S. Stoehr, White & Case LLP
Mr. Alejandro Manrique, Embassy of Peru in the United Kingdom
(1) the objection provides a basis for dismissal of a claim as a matter of law, such that no award in favor Renco could be made on that claim; and
(2) the objection assumes the facts as alleged by Renco to be true, or otherwise involves facts not in dispute, per Article 10.20.4(c).
■ It grants Peru the right to make any objection under Article 10.20.4, including jurisdictional and other objections;
■ Article 10.20.4 is drafted in mandatory terms and these objections shall be decided as a preliminary matter; and
■ In determining Peru's objections, facts alleged by Renco in support of claims in its notice of arbitration, as amended, and statement of claim are presumed to be true.
■ Article 10.20.4(c) only encompasses objections to the legal sufficiency of a claim and therefore if an objection to the tribunal's competence falls within the scope of Article 10.20.4, then Article 10.20.4(c) would require the tribunal to assume to be true all of the claimant's factual allegations in the notice of arbitration and the statement of claim, and not just those "in support of any claim." Thus, the USG supports the Claimant's position that the inclusion of the phrase "in support of any claim" in Article 10.20.4(c) confirms that objections to the tribunal's competence fall outside the scope of Article 10.20.4.
■ "Subparagraph (d) confirms that a respondent is not required to request a preliminary decision on an objection to competence when invoking the procedures under paragraph 4 (or paragraph 5). That is, the applicable arbitration rules permit, but do not require, a respondent to seek a preliminary decision on any objections to competence, and paragraph 4 does not alter those rules."38 According to the Claimant, this evidences USG's rejection of the Respondent's "necessary corollary" argument39 and adopts the Claimant's reading of Article 10.20.4(d).
■ "[A]n objection under paragraph 4 and any objection that the dispute is not within the tribunal's competence " emphasiz[es] that objections asserted under paragraph 4 are distinct from objections to the tribunal's competence."40 For the Claimant this statement by the USG is consistent with its position that "the words ‘an objection under paragraph 4 and any objection that the dispute is not within the tribunal's competence' is additional confirmation that an objection under paragraph 4 of Article 10.20 regarding the substantive viability of a claim is different than, and not included within, an objection that the dispute is not within the tribunal's competence. Any other reading impermissibly would cause the words of the Treaty to be in conflict."41
(1) Does Article 10.20.4 of the Treaty encompass within its scope preliminary objections which may be characterized as relating to competence?
(2) Which, if any, of the preliminary objections raised by the Respondent should be permitted to proceed to scheduling and full briefing for final decision in the Article 10.20.4 Phase of these proceedings?
"4. Without prejudice to a tribunal's authority to address other objections as a preliminary question, such as an objection that a dispute is not within the tribunal's competence, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant may be made under Article 10.26.
(a) Such objection shall be submitted to the tribunal as soon as possible after the tribunal is constituted, and in no event later than the date the tribunal fixes for the respondent to submit its counter-memorial (or, in the case of an amendment to the notice of arbitration, the date the tribunal fixes for the respondent to submit its response to the amendment);
(b) On receipt of an objection under this paragraph, the tribunal shall suspend any proceedings on the merits, establish a schedule for considering the objection consistent with any schedule it has established for considering any other preliminary question, and issue a decision or award on the objection, stating the grounds therefor.
(c) In deciding an objection under this paragraph, the tribunal shall assume to be true claimant's factual allegations in support of any claim in the notice of arbitration (or any amendment thereof) and, in disputes brought under the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules. The tribunal may also consider any relevant facts not in dispute.
(d) The respondent does not waive any objection as to competence or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph or make use of the expedited procedure set out in paragraph 5."
"5. In the event that the respondent so requests within 45 days after the tribunal is constituted, the tribunal shall decide on an expedited basis an objection under paragraph 4 and any objection that the dispute is not within the tribunal's competence. The tribunal shall suspend any proceedings on the merits and issue a decision or award on the objection(s), stating the grounds therefor, no later than 150 days after the date of the request. However, if a disputing party requests a hearing, the tribunal may take an additional 30 days to issue the decision or award. Regardless of whether a hearing is requested, a tribunal may, on a showing of extraordinary cause, delay issuing its decision or award by an additional brief period, which may not exceed 30 days."
(a) " Such objection" must be submitted to the tribunal within the time limit specified.
(b) Upon receiving "an objection under this paragraph", the tribunal shall suspend the proceedings on the merits and establish a timetable for dealing with the objection. Such timetable shall be "consistent with any schedule [the tribunal] has established for considering any other preliminary question." This is a clear reference to preliminary questions dealt with under the applicable arbitration rules and accords with the general purpose of the article to ensure an efficient and cost-effective procedure for disposing of preliminary objections.
(c) When deciding "an objection under this paragraph," the tribunal is required to adopt an evidentiary standard which assumes that all of claimant's factual allegations in support of its claim as set out in the pleadings are true.
(d) The respondent is not deemed to have waived "any objection as to competence or any argument on the merits" merely because it did or did not raise " an objection under this paragraph " or under Article 10.20.5.
"...Upon the request of the respondent within 45 days after the tribunal is constituted, the tribunal shall decide on an expedited basis an objection under paragraph 4 and any objection that the dispute is not within the tribunal's competence. "
(1) The principal ("shall address and decide") clause in Article 10.20.4 refers to objections alleging the insufficiency of a claim as a matter of law which a tribunal is mandated to decide as a preliminary issue based on assumed facts.
(2) The subordinate ("without prejudice") clause in Article 10.20.4 preserves a tribunal's right to decide "other objections" (including competence objections) as preliminary questions pursuant to the applicable arbitration rules.
(3) Article 10.20.5 provides for a special expedited procedure, at a respondent's option, for dealing with preliminary objections under both (1) and (2).
"[A] motion to dismiss for failure to state a cause of action, or, to use the expression current in England, a strike-out application...is a defense on the merits and not a matter of admissibility [or jurisdiction]. The USA was not arguing [in Methanex ] that the case was unhearable, but that it was legally hopeless. That is precisely how one should understand the difference between a challenge of inadmissibility and a strike-out application." 58
" Article 10.20.4(d) confirms Peru's right to raise competence objections under Article 10.20.4, by providing that a respondent State 'does not waive any objection as to competence or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph '. The necessary corollary to this provision is that a State may raise an objection as to competence under Article 10.20.4."62 [Emphasis in original]
" [t]he respondent does not waive any objection as to competence or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph or make use of the expedited procedure set out in paragraph 5 ." [Emphasis added]
" One has to be careful with the views, in particular ex post, of participants in the negotiations. Like witnesses in court, they will interpret what has happened through the lens of their own—as a rule limited and one-sided—perspective, views on desirability, and interests of their principals. They will tend to suppress 'cognitive dissonance' and rather confirm what has happened is what they think should have happened. " 69
" The summary record of a conference prepared by an independent and experience secretariat will carry more weight than an unagreed record produced by [a] participating state. However, even the records of a conference served by a skilled secretariat will generally not tell the whole story. The most important parts of negotiating and drafting often take place informally, with no agreed record being kept. The reasons why a particular compromise formula was adopted, and what it was intended to mean, may be difficult to establish. " 70
(1) Violation of the Treaty's Waiver Provisions. Peru contends that Renco has presented an invalid waiver in this arbitration, in violation of Article 10.16.1(b) of the Treaty. In addition, Peru contends that, through the initiation and continuation of certain proceedings, Renco has acted in violation of the Treaty's waiver requirement.
(2) Lack of Jurisdiction Ratione Termporis. Peru asserts that the Treaty limits arbitrable claims to those that arise from facts that took place after the Treaty came into force in 2009. Further, Peru argues that the Treaty precludes the submission of claims more than three years after a claimant knew or should have known of an alleged breach. Peru contends that the claims advanced by Renco in these proceedings violate both temporal limitations.
(3) Failure of Claims Under the Plain Language of the Contract. Peru contends that Renco's Treaty claims are based on alleged breaches of the Stock Transfer Agreement in connection with the tort suits proceeding against Renco in the United States. Peru argues that these contract claims must fail as a matter of law because the party to the Stock Transfer Agreement is not a defendant in the U.S lawsuits. Further, Peru argues that Renco failed to submit a claim for determination by a technical expert as required by the Stock Transfer Agreement. Therefore, Peru contends that it cannot be deemed to have breached a contractual obligation with respect to the U.S. lawsuits as asserted by Renco.
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