|AIRP||Afghanistan Infrastructure Rehabilitation Programme|
|BOP||Balance of Plant|
|FAR||U.S. Government Federal Acquisition Regulation|
|KPP||Kabul Power Plant|
|LOC||Letter of Contract|
|QCDR||Quality Control Daily Report|
|RFP||Request for Proposal|
|SWO||Stop Work Order|
|AHMAD, FAYYAZ||PROJECTS AND DESIGN COORDINATOR, VICC|
|AKBAR, MOHAMMED||FINANCE MANAGER, VICC|
|ANIS, SAFIULLAH||ASSISTANT DIRECTOR, VICC|
|BARYALAI, USTAD RAHIMULLAH||CO-FOUNDER AND VICE-PRESIDENT OF VICC. LATER PRESIDENT OF VICC.|
|BELL, BOB||PROGRAM DIRECTOR, LBG/B&V|
|BOEHLER, MICHAEL||TASK ORDER 9 PROJECT MANAGER (KANSAS CITY), LBG/B&V|
|CONE, ROBERT||TASK ORDER 9 MANAGER (INTERIM), LBG/B&V|
|COPELAND, DEL||PROJECT MANAGER (PRE-OCTOBER 2008), DIRECTOR OF CONSTRUCTION (POST-OCTOBER 2008)|
|CORDNER, KARL||PROJECT MANAGER, VICC|
|CURRIE, JACK||TASK ORDER 9 MANAGER, LBG/B&V|
|DOHERTY, PAT||MANAGEMENT, LBG/B&V|
|DRANNAN, MICHAEL||PRESIDENT, VICC|
|DUNNING, ABEL||CONTRACTS MANAGER, SYMBION|
|GOEDJEN, DON||ENGINEERING MANAGER, SYMBION|
|HINKS, PAUL||CEO, SYMBION|
|JAENISCH, STEVE||CONTROL MANAGER, (PRE-OCTOBER 2008) PROJECT MANAGER (POST OCTOBER 2008), SYMBION|
|KILLORAN, BILL||ENGINEER, SYMBION|
|MANE, PRAMOD||ACCOUNTANT, SYMBION|
|MOITRA, SANTANU||MANAGEMENT, LBG/B&V|
|O'BRIEN, BRENDAN||CONSULAR OFFICER, US EMBASSY IN AFGHANISTAN|
|SHAW, GLEN||ENGINEER, SYMBION|
|VAN DYKE, WILLIAM||PRESIDENT, B&V FEDERAL SERVICES DIVISION|
|WHIPPEN, JACK||DEPUTY CHIEF OF PARTY AND ENERGY SECTOR LEAD, LBG/B&V|
|WOLF, LEIGH||CIVIL ENGINEER, LBG/B&V|
|ZOTZMAN, LES||TASK ORDER 9 STARTUP MANAGER, LBG/B&V|
Lord Hacking (President)
3 King’s Bench Walk North
London EC4Y 7HR
Tel: +44 20 77 97 86 00
Fax; +44 20 77 97 86 99
Donald P. Arnavas, Esq. (Co-Arbitrator)
207A East Dover Street
Easton, MD 21601
Tel: +1 443 385 0401
Stephen R. Bond, Esq. (Co-Arbitrator)
COVINGTON & BURLING LLP
London WC2R 1BH
Tel: +44 20 70 67 2024
Charlotte Davies (Administrative Secretary)
3 King's Bench Walk North
London EC4Y 7HR
Tel: +44 20 77 97 86 00
Fax: +44 20 77 97 86 99
Jesse B. Grove III, Esq.
P.O. Box 158
270 Jackson Street
Scottsville, VA 24590
Claimant - Venco Imtiaz Construction Company
Street 15, Lane 2, House 52
Wazir Akbar Kahn
Louis D. Victorino, Esq.
Christopher M. Loveland, Esq.
SHEPPARD MULLIN RICHTER & HAMPTON LLP
1300 I Street, N.W., 11th Floor East
Washington D.C., 20005
Tel: +1 202 218 000
Fax: +1 202 312 9432
Respondent - Symbion Power LLC
1919 Pennsylvania Avenue, N.W.
Washington, D.C., 20006
R. Scott Greathead, Esq.
WIGGIN & DANA LLP
450 Lexington Avenue, 38th Floor
New York City, 10017-3913
Tel: +1 212 490 1700
Fax: +1212 490 0536
Timothy A. Diemand, Esq.
Erik H. Beard, Esq.
WIGGIN & DANA LLP
185 Asylum Street
Hartford, CT 06103
Tel: +1 860 297 3700
Fax: +860 252 9380
Mark E. Hanson Esq.
Edmund M. Amorosi Esq.
D. Joe Smith Esq.
Zachary D. Prince Esq.
Laura A. Semple Esq.
SMITH PACHTER MCWHORTER PLC
8000 Towers Crescent Drive
Unless settled amicably, any dispute in respect of which the DAB's decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both Parties:
(a) the dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce,
(b) the dispute shall be settled by three arbitrators appointed in accordance with these Rules, and
(c) the arbitration shall be conducted in the language for communications defined in Sub-Clause 1.4 [Law and Language].
The arbitrator(s) shall have full power to open up, review and revise any certificate, determination, instruction, opinion or valuation of the Engineer, and any decision of the DAB, relevant to the dispute. Nothing shall disqualify the Engineer from being called as a witness and giving evidence before the arbitrator(s) on any matter whatsoever relevant to the dispute.
Neither party shall be limited in the proceedings before the arbitrator(s) to the evidence of arguments previously put before the DAB to obtain its decision, or to the reasons for dissatisfaction given in its notice of dissatisfaction. Any decision of the DAB shall be admissible in evidence in the arbitration.
Arbitration may be commenced prior to or after completion of the Works. The obligations of the Parties, the Engineer and the DAB shall not be altered by reason of any arbitration being conducted during the progress of the Works."
"If a dispute arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works and there is no DAB in place, whether by reason of the expiry of the DAB's appointment or otherwise:
(a) Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply; and
(b) The dispute may be referred directly to arbitration under Sub-Clause 20.6 [Arbitration]."
Sub-Clause 18.104.22.168 of the Particular Conditions of the VICC Sub-Contract
"Laws" means any applicable national, federal, municipal or state statute, ordinance or other law (including applicable federal Acquisition Regulation ("FAR"] provisions pertinent to this Contract), regulation or by-law or any rule, codes or direction or any license, consent, permit, authorization or other approval including any conditions attached thereto (whether relating to the environment or otherwise) of Afghanistan or any part thereof; or of the United States of America; or of any Governmental Authority, public body or authority, local or national agency, department, inspector, ministry, official or public or statutory person (whether autonomous or not) which has appropriate jurisdiction over this Contract, the Works or the Project, excluding provisions pointing to the laws of another jurisdiction.
Sub-Clause 1.4 of the Particular Conditions of the VICC Sub-Contract
The Works and the Project shall be governed by the Laws, except that interpretation of this contract shall be construed under the laws of the State of Nevada, U.S.A. The governing language under this Contract shall be English, unless otherwise expressly specified."
Section II Conditions of Contract
Part I: General Conditions
14.1 The Contract Price
Unless otherwise stated in the Particular Conditions:
(a) the Contract Price shall be agreed or determined under Sub-Clause 12.3 [Evaluation] and be subject to adjustments in accordance with the Contract;
14.3 Application for Interim Payment Certificate
The Contractor shall submit a Statement in six copies to the Engineer after the end of each month, in a form approved by the Engineer, showing in detail the amounts to which the Contractor considers himself to be entitled, together with supporting documents which shall include the report on the progress during this month in accordance with Sub-Clause 4.21 [Progress Reports].
14.6 Issue of Interim Payment Certificates
No amount will be certified or paid until the Employer has received and approved the Performance Security. Thereafter, the Engineer shall, within 28 days after receiving a Statement and supporting documents, issue to the Employer an Interim Payment Certificate which shall state the amount which the Engineer fairly determines to be due, with supporting particulars.
However, prior to issuing the Taking-Over Certificate for the Works, the Engineer shall be bound to issue an interim payment certidicate in an amount which would (after retention and other reductions) be less than the minimum amount of Inteirm Payment Certificates (if any) stated in the Appendix to Tender. In this Event, the Engineer shall give notice to the Contractor accordingly.
An Interim Payment Certificate shall not be withheld for any other reason, although:
(a) if anything supplied or work done by the contractor is not in accordance with the Contract, the cost of rectification or replacement may be withheld until rectification or replacement has been completed; and/or
(b) if the Contractor was or is failing to perform any work or obligation in accordance with the Contract, and has been so notified by the Engineer, the value of this work or obligation may be withheld until the work or obligation has been performed.
The Engineer may in any Payment Certificate make any correction or modification that should properly be made to any previous Payment Certificate. A Payment Certificate shall not be deemed to indicate the Engineer's acceptance, approval, consent or satisfaction.
The Engineer shall pay to the Contractor:
(a) the first instalment of the advance payment within 42 days after issuing the Letter of Acceptane or within 21 days after receiving the documents in accordance with Sub-Clause 4.2 [Performance Security] and Sub-Clause 14.2 [Advance Payment], whichever is the later;
(b) the amount certified in each Interim Payment Certificate within 56 days after the Engineer receives the Statement and supporting documents; and
(c) the amount certified in Final Payment Certificate within 56 days after the Engineer receives this Payment Certificate.
Payment of the amount due in each currency shall be made into the bank account, nominated by the Contractor, in the payment country (for this currency) specified in the Contract
14.8 Delayed Payment
If the Contractor does not receive payment in accordance with Sub-Clause 14.7 [Payment], the Contractor shall be entitled to receive financing charges compounded monthly on the amount unpaid during the period of delay. This period shall be deemed to commence on the date for payment specified in Sub-Clause 14.7 [Payment], irrespective (in the case of its sub-paragraph (b)) of the date on which any Interim Payment Certificate is issued.
Unless otherwise stated in the Particular Conditions, these financing charges shall be calculated at the annual rate of three percentage points above the discount rate of the central bank in the country of the currency of payment, and shall be paid in such currency. The Contractor shall be entitled to this payment without formal notice or certification, and without prejudice to any other right or remedy.
15.3 Valuation at Date of Termination
As soon as practicable after a notice of termination under Sub-Clause 15.2 [Termination by Employer] has taken effect, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine the value of the Works, Goods and Contractor's Documents, and any other sums due to the Contractor for the work executed in accordance with the Contract.
Part II: Conditions of Contract
Conditions of Particular Application
14 - CONTRACT PRICE AND PA YMENT
SUB-CLAUSE 14.1 - THE CONTRACT PRICE
"the Contract Price shall be $2,237,843.85, [USD] subject to modification only as provided under this Contract."
Schedule 9.6- Payment Management
9.6.2 Progress Payment Determination
Subcontractor and Symbion Power shall establish payment milestones based on the approved Project Schedule attached. The initial distribution of the lump sum price on a percentage of the total basis to the individual months, when completed by the Subcontractor, shall be submitted for Symbion Power review for reasonableness and acceptance.
Symbion Power will make bimonthly progress payments for the Work based on subcontractor attainment of the payment milestones identified. Symbion Power reserves the right to make partial provisional percentage payment on disputed payment milestone completions pendng reconciliation or alternate work progress. Determination of attainment of each payment milestone will be by the Symbion Power. The amount of Subcontractor's payment shall be calculated by applying the percentage for the month against the total Subcontract Price and then deducting applicable retention and backcharge.
9.6.3 Revisions to the Subcontract Price
In determining the amount of increase or decrease in the Subcontract Price on account of any revision issues by Symbion Power in accordance with the provisions of the Subcontract, the following Subcontract Revision payment articles shall apply where appropriate.
22.214.171.124 Bi-Monthly Payments
Subcontractor invoices shall be prepared and submitted for Symbion Power's review and approval as described in Invoicing Instructions hereof. Symbion-Power will make bimonthly progress payments for the Work installed in accordance with Progress Payment Determination article. Symbion-Power will pay Subcontractor after Symbion-Power’s receipt of an approved invoice, submitted in accordance with the requirements of the article titled Invoicing Instructions, with Symbion-Power withholding ten percent of the approved invoice amount as retention until Final Completion. Symbion-Power may retain or deduct from any payment to Subcontractor any sums as Symbion-Power may be entitled to retain or deduct under the provisions of this Subcontract Any or all payments to Subcontractor hereunder shall not be construed to be an acceptance by Symbion-Power of the Work.
126.96.36.199 Invoicing Instructions
Subcontractor shall prepare all invoices in a form satisfactory to and approved by Symbion-Power. Submitted invoices shall be complete with all supporting documentation as required.
Each invoice shall be itemized by Subcontract line item and shall show the invoiced amount, Retention, if applicable, the net amount due, Project name, Subcontract number, invoice number and, if applicable, the billing period. If invoices do not conform to these requirements, Symbion-Power may either return such invoices to Subcontractor for correction and re-submittal or will request Subcontractor to submit documentation to remedy the deficiencies.
Subcontractor shall submit invoices complete with supporting documentation to Symbion-Power at the following address:
House No. 1024, Street 15, Lane 6,
Wazir Akbar Khan,
A Subcontractor's authorized representation shall sign each invoice certifying that all Work covered by the invoice is complete and that the invoice is correct, authentic, and the only one issued for the Work described therein.
|Number||Date||Summary of content|
|PO1||7 March 2014||Procedural rules for the arbitration.|
|PO2||7 March 2014 (subsequently revised]||Provisional timetable for the arbitration.|
|PO3||2 July 2014||Order relating to Claimant's application for dismissal of Counts I and III of Respondent's Counterclaim, and of Respondent's application for security on the Award from Claimant. Parties ordered to respond to questions set out in Schedule to the Procedural Order.|
|PO4||28 July 2014||Order relating to Claimant's application for a protective order, request for draft of order and for Respondent's comments.|
|PO5||28 July 2014||Decision to issue a Protective Order, and ordering date for provision of information ordered in PO3.|
|PO6||5 November 2015||Various orders relating to Respondent's application for security from the Claimant.|
|PO7||13 November 2014||Various orders relating to production of documents.|
|PO8||24 November 2014||Order regarding Respondent's request for leave to obtain documents and testimony from nonparty B&V.|
|PO9||4 February 2015||Decision to order security from the Claimant and directing the parties to attempt to agree a form of bond.|
|PO10||16 February 2015||Order postponing evidential hearing as fixed forApril 2015.|
|PO11||9 March 2015||Order relating to Claimant's request for an extension of time to respond to PO9, and Respondent's request for a default award.|
|PO12||28 March 2015||Order granting Claimant's request to file a Reply in relation to its request for an extension of time to respond to PO9.|
|PO13||27 May 2015||Various orders relating to the appointment of Mr Jesse B. Grove III as Co-Arbitrator and fixing the evidential hearing for 2-13 November 2015.|
|PO14||19 June 2015||Order relating to the Claimant's motion to amend PO9 and its request for interim measures dated 3 April 2015.|
|PO15||19 June 2015||Order relating to discovery and expert testimony.|
|PO16||19 June 2015||Revised timetable.|
|PO17||3 July 2015||Order relating to Claimant's request for additional time to obtain a bank guarantee complying with the criteria set out in PO14.|
|PO18||12 August 2015||Various orders relating to Claimant's default in providing security, expert reports and discovery.|
|PO19||12 August 2015||Revised timetable.|
|PO20||23 September 2015||Order relating to adjustments for the evidential hearing.|
|PO21||24 September 2015||Order regarding location of the evidential hearing.|
|PO22||28 September 2015||Order denying Respondent’s request for a peremptory order in relation to Claimant's provision of security and holding that the Claimant had produced sufficient security.|
|PO23||21 October 2015||Order relating to directions for the evidential hearing.|
|PO24||18 November 2015||Order relating to the submission of Post Hearing Memorials and Replies.|
28.1. Claimant’s Request for Arbitration, 13 March 2013;
28.2. Claimant’s Amended Request for Arbitration, 20 March 2013;
28.3. Respondent's Answer and Counterclaims, 1 July 2013;
28.4. Claimant’s Reply to Counterclaims, 7 August 2013;
28.5. Claimant's Statement of Claim, 30 May 2014;
28.6. Respondent's Statement of Defense and Counterclaims, 8 August 2014;
28.7. Claimant's Responsive Memorial, 21 September 2015;
28.8. Respondent’s Responsive Memorial, 16 October 2015;
28.9. Claimant's Post Hearing Brief and Application for Award of Costs, 22 January 2016;
28.10. Respondent’s Post-Hearing Memorial and Post-Hearing Request for Costs, 22 January 2016;
28.11. Claimant's Reply to Respondent's Post-Hearing Memorial and Claimant's Reply to Respondent's Post-Hearing Request for Costs, 22 February 2016;
28.12. Respondent's Reply to Claimant's Post-Hearing Brief and Respondent’s Reply to Claimant’s Request for Costs, 22 February 2016.
31.1. Karl Cordner (declarations dated 29 May 2014 and 14 September 2015);
31.2. Michael Drannan (declarations dated 29 May 2014, 19 September 2015). Mr Drannan gave his evidence from Bangkok via video link;
31.3. Steve Jaenish (declarations dated 5 August 2014 and 16 October 2015); and
31.4. Paul Hinks (declarations dated 28 May 2015, 15 June 2015, 4 August 2015, 7 September 2015 and 16 October 2015).
(1) Whether the Claimant is entitled to be paid in respect of some or all of the PIs and POs it submitted to the Respondent;
(2) Whether the Claimant is entitled to be paid in respect of its work associated with a Stop Work Order;
(3) The Claimant's claims for interest on the unpaid PIs and POs;
(4) What governing law should be applied to the Claimant's claims and the Respondent's counterclaims;
(5) Whether the Claimant, depending on the applicable governing law, tortiously interfered with the BOP Contract;
(6) Whether the Respondent, depending on the applicable governing law, is entitled to claim for its losses relating to malicious prosecution and/or abuse of process relating to its two employees who were detained and harassed by the Afghan authorities;
(7) The Respondent's claim for punitive damages;
and, by carrying out this exercise and noting the parties’ Post Hearing and Reply Post Hearing Submissions, the Tribunal believes that it is addressing each and every Prayer for Relief and all other claims which have been presented to it
56.1. The BOP Contract contained a pay-if-paid clause at 188.8.131.52 which provided that:
Paid as Paid by Owner
Progress payments to the Bidder for the Work will be made for approved payment amounts as Employer is paid by Owner. Owner's payment to Employer for the work is a condition precedent to Employer's obligation to pay Bidder for the Work. Therefore Bidder will only be paid to the extent that Employer receives payment for the Work from Owner.
56.2. The Claimant’s Site Clearing Contract with LBG/B&V contained the following sub-clause 14.16:
Notwithstanding any of the above, Employer shall pay the Contractor for satisfactory performance under this Contract not later than 7 days from receipt of the payment out of such amounts as are paid to the Employer under its contract with USAID.
56.3. The LOC between the Claimant and LBG/B&V following termination of the VICC Sub-Contract with the Respondent contained the following clause:
10. Any amounts due for Work performed during the Term will be included in the Purchaser's invoice to Puchaser's client Purchaser will issue payment to Subcontractor seven days after Purchaser receives payment from Purchaser’s client for such amounts.
56.4. Finally, the BOP-Civil Contract between the Claimant and LBG/B&V following termination of the VICC Sub-Contract with the Respondent contained the following clause:
00452.2 Payment Determination
Owner's payment to Purchaser for the Work is a condition precedent to Purchaser's obligation to pay Subcontractor for the Work. Therefore, Subcontractor will only be paid if and to the extent that Purchaser receives payment for Work from Owner.
58.1. In particular, Mr Jaenisch gave evidence that in a conversation with Mr Cordner, on about 14 January 2009, he was explaining how the Respondent was going to do business in the future23. It was his evidence that he never gave much thought to whether he had the authority to actually negotiate a change to the contract terms and conditions, but agreed that he never did negotiate a change to those parts of the contract24. He stated that in response Mr Cordner "grumbled" about it and said "I'm not sure I like that", but never said no25. Mr Jaenisch stated that from that point whenever Mr Cordner asked him when the Claimant would be paid, his response would be "Well, you’ll get paid when we get paid."26 He recalled that Mr Cordner never responded that it was unacceptable and that the Claimant would quit. However he also never expressed agreement or stated that the Claimant would accept the modification. Mr Jaenisch explained that to his mind "they agreed by never saying "No, we’re not going to do that" and leaving the project... as long as you keep working, you're agreeing to what I’m telling you."27
58.2. Mr Cordner accepted that this conversation with Mr Jaenisch took place but said it was a discussion about the Respondent having problems getting money from the joint venture, and it was the Respondent's unilateral decision that they were not going to flow money through to the subcontractors until they were paid. He said that he told Mr Jaenisch that the Claimant would not accept this, the contract was with the Respondent and the Claimant expected them to be responsible for their debts28. Mr Cordner said that after this initial conversation, whenever the matter was raised again the Claimant would tell Mr Jaenisch that it did not agree to that sort of arrangement and it expected the Respondent to pay. He also said that at every opportunity he continued to press the Respondent to pay, but that the Claimant carried on working in the hope that the Respondent and LBG/B&V would sort out their problems and the money would start flowing again29. In respect of the later contract negotiations between the Claimant and LBG/B&V after the Respondent had terminated the BOP Contract, Mr Cordner's evidence was that he objected to LBG/B&V relieving themselves of any responsibility for the Respondent's debts at that point and in the future30.
60.1. On 17 November 2008, Mr Cordner sent an email to Mr Drannan titled "payments using menace" in which he stated that the progress payment problem lay with LBG and "so me and Symbion are going to pressure them as much as we can to get them to fast track their obligation."34
60.2. On 14 January 2009, in an internal email to Mr Copeland, Mr Jaenisch wrote that "VICC is curious as to when they will be paid. I had a talk with [Cordner], and we discussed the pay when paid philosophy, which he understands, but he indicates that Mike Dramman (sp) isn't very patient."35
60.3. On 29 January 2009, in an internal email Mr Jaenisch wrote that he was "pushing as hard as I can to get [the Claimant] paid. I've told [Copeland] and [Hinks] that the work will slow down if we don’t pay them immediately."36 Two days later, on 31 January 2009, in an internal email to Mr Goedjen and Mr Copeland (of Symbion), Mr Jaenisch stated that the Respondent should "worry how long Venco will stay on the job without being paid."37
60.4. On 3 February 2009, Mr Drannan emailed Mr Cordner and advised that he had spoken to Jack Currie a few days ago and "Either way we are guaranteed payment from LBG or USAID even if Symbion was to get shafted."38
60.5. On 21 February 2009 Mr Hinks emailed Mr Drannan regarding delayed payments from Symbion, and stated "I thoroughly appreciate that you have been extremely patient... I checked with our finance people and a payment of $800,000 was released this week and I know their intention is to make you whole shortly, when we get paid again."39 Mr Drannan responded the next day stating "We understand most of the issues facing Symbion in this regard and appreciate the situation you are currently exposed to in regards to this project."40
60.6. On 12 March 2009 Mr Hinks emailed Mr Drannan stating that the Respondent's cashflow on the project "has gone haywire" and that the Respondent had "been trying to get it resolved for the past 2 weeks with B&V in DC and Kansas... It came to a crunch because B&V stopped our payments because they were worried about a breach of FAR." On 13 March 2009, Mr Drannan responded stating "We are aware of the issues you have addressed and appreciate the situation Symbion is in." Later in the email he stated 7 am only reiterating this information so everyone understands that our ability to support the Symbion project also rests on our ability to provide prompt payment for services."41
60.7. On 30 March 2009 Mr Drannan emailed Mr Baryalai to advise that he had "already advised karl to quietly let lbg know that we will not wait another month... we can wait another week at the most before we need to receive at a min the long past due invoices..."42
60.8. On 1 April 2009, Mr Drannan wrote to Mr Currie and asked to speak confidentially about the Respondent and said he was about to "submit a formal notification letter to LBG for non payment so that any future payments to Symbion will be guaranteed to be paid to VICC before being paid to Symbion."43 The next day Mr Drannan sent an internal email to Mr Baryalai stating that the purpose of the email to Mr Currie was to find out if the Respondent was paid recently "so we could get our payment."44 Two days later Mr Drannan emailed Mr Cordner and explained that he was going to prepare a failure letter to LBG which would mean LBG was "legally obligated to see that we are paid in full if any payment is agreed to be released to Symbion... first... any balance can then be given to Symbion."45
60.9. On 2 April 2009, Mr Hinks emailed Mr Drannan stating "You’ve been a good partner for this project so far but it is your prerogative to stop work if you wish."46
60.10. On 11 May 2009, Mr Drannan wrote to Mr Cordner and Mr Baryalai and stated "Since we have served both symbion and lbg with failure notice, we at least will be guaranteed to have our payment made by lbg directly to us before any money can be released to Symbion." Mr Cordner replied stating "Although Symbion have not paid up in a long time, I think that the problem lies with LBG trying to milk the project for everything they can and blame everyone else for not hitting completely unrealistic milestones. I don't like not being paid, but at least Symbion are being honest about their problems and with the direction they have chosen to take (i.e. no cash-flow into Symbion, no cash-flow out of Symbion)."47
60.11. Later in May 2009, after the BOP Contract had been terminated, there were further internal emails between Mr Drannan, Mr Cordner and Mr Baryalai including an email on 27 May 2009 in which Mr Drannan stated that he had made LBG/B&V aware that the Claimant would be "holding both lbg and usaid responsible for the amounts due if they terminate Symbion..."48 In an email on 28 May 2009 Mr Drannan again stated that he could "guarantee that LBG will end up being responsible" for the money the Claimant had invoiced to the Respondent49.
60.12. On 1 June 2009, Mr Cordner wrote to Mr Drannan about a meeting he had held with Mr Baryalai and Mr Copeland and recounted that "There are no commitments from them other than they will pay when they are paid."50
Q. Do you think it is accurate when Mr Jaenisch told Mr Copeland that you understood the 'pay-when-paid' philosophy?
A. I understood this philosophy, but we didn't agree to this as a modification.
Q. OK. You said every time this came up on the site you told Symbion the same thing, that you don't agree with a 'pay-when-paid' modification, correct?
A. Maybe not using those terms but we always asserted that Symbion would be responsible for their debt to us under the Contract.
Q. Even if Symbion was not paid by the joint venture?
* * * * * *
Q. And on the second page of this email [of 11 May 2009J you wrote to Mr Drannan and Mr Baryalai and you said, ‘although Symbion have not paid up in a long time, I think that the problem lies with LBG trying to milk the project for everything they can and blame everyone else for not hitting completely unrealistic milestones. I don’t like not being paid, but at least Symbion are being honest about their problems and with the direction they have chosen to take i.e. no cash flow into Symbion no cash flow out of Symbion’. That's what you wrote, right?
Q. And no cash flow into Symbion no cash flow out of Symbion, that sounds like pay when paid doesn't it?
A. It doesn't sound anything like an agreement to pay when paid. All I am referring to here is that they've been honest that they are not going to pay us until they have been paid."64
90.1. Invoices 6-9 were expressly approved by the Respondent, and that this approval establishes that the work claimed in those Invoices was in fact carried out by the Claimant. This is corroborated by the email of Mr Copeland to Mr Drannan dated 27 April 2009, as further referred to in paragraph 83 above, which the Claimant contends demonstrates the Respondent’s approval of values and percent complete for Invoices 1 to 9102;
90.2. In breach of contract, the Respondent failed to accept or reject Invoices 10-13. However, the evidence before the Tribunal establishes that the work claimed in those Invoices was carried out by the Claimant, in particular the Quality Control Daily Records ("QCDRs") for the relevant periods103.
110.1. In respect of damages relating to Invoices 6 to 13, it argues that interest began to accrue 15 days after submission based on Sections 9.6.2 and 9.6.3 of the Conditions of Particular Application of Section VI of the VICC Sub-Contract which provided for bi-monthly payment On this basis, it calculates the interest due on Invoices 6 to 13 as $941,854.55 up to 15 February 2016128;
110.2. In respect of interest relating to the SWO, it argues that it is calculated on the same basis and amounts to $24,460.55 for the same period to 15 February 2016129;
110.3. In respect of damages relating to the POs, the Claimant asserts that payment was due upon invoicing and calculates the amount as $937,724 up to 15 February 2016 based on a 30 day payment period130.
112.1. First, it argues that under Nevada law interest does not accrue unless and until the Tribunal determines any amount due and owing, on the basis that Nevada law provides that money damages do not became due until their value is ascertainable. In this case, as the Claimant's invoices are in dispute, damages could not be known to the Respondent prior to the decision of the Tribunal and therefore pre-award interest is inappropriate133.
112.2. Second, it says that even if pre-award interest is accruing, the Claimant's argument as to the date interest should begin to accrue is contradicted by the terms of the VICC Sub-Contract and Mr Kiraly's expert analysis. In respect of both the Invoices and POs, the Respondent says that Section 14.7 of the VICC Sub-Contract applies, which provides for a 56 day payment period. It relies on the fact the Claimant has repeatedly used the 56 day period for its calculations, including in Mr Kiraly’s Expert Report134.
125.1. In relation to tortious interference with contract, the Claimant states that both its own expert, Mr Mahjoor, and the Respondent's expert, Mr Qasimi, agreed that the concept of tortious interference is a common law principle that does not exist in Afghan law. References in the Afghan Civil Code to "property" are references to tangible property, not intangible things such as contractual rights. It argues that Mr Qasimi later attempted to "circumvent his own admission" by drawing inferences from Shari'a law and other sources outside the Afghan civil code which were unsupported. It also argues that Mr Qasimi's conclusion is contrary to the decision of the Court of Appeals of Texas in Bridas Corp. v Unocal Corp., 16 S.W. 3d 893 (Ct. App. Texas, 2000) which stands as strong authority for concluding that there is no cause of action under Afghan law for tortious interference. Further, it contends that even if the Tribunal were to find a cause of action for tortious interference under Afghan law, Mr Mahjoor’s testimony established that the damages claimed by the Respondent fall outside those available under Afghan law as the civil code does not extend to allow recovery for damages to intangibles such as a contract149;
125.2. In relation to Count III, the Claimant again relies on the expert testimony of Mr Mahjoor that there is no cause of action of malicious prosecution/abuse of process under Afghan law. In addition it says that even if there were such a cause of action, no compensation would be paid by the tortfeasor as damages are limited to non-monetary relief. The penalty for making a false accusation would be punishment by the Government, not compensation paid by the wrongdoer to the accused. Further, the wrongdoer must be the direct actor of the tort rather than merely the person who directed the wrongdoing; in this case it says the direct actor was the police who detained Mr Jaenisch and Mr Copeland, rather than anyone from the Claimant Finally, it relies on Mr Mahjoor's testimony that it is not a crime or a wrongful act to file a case or application in a court that may not have jurisdiction, and that the Claimant's action in filing an action with the Attorney General's Office was not an abuse of process150.
128.1. In respect of tortious interference with contract, the Respondent refers to art. 758 of the Afghan Civil Code, which provides that a person who destroys the property of another is obliged to pay damages. Mr Qasimi testified that in order to interpret the meaning of the word "property" in this context, it is necessary to engage in "comparison" under Shari'a rules. In particular, he referred to a Shari'a principle of najsh which he stated was "rooted in hadith", specifically the Hanafi jurisprudence book of Sahih al-Bukhari published in 870 AD. It was his evidence that under the principle of najsh, and by application of the principle to the modern context, a third party to a transaction between others may not interfere in that transaction. Accordingly, Count I of the Counterclaim is actionable under Afghan law154;
128.2. In respect of malicious prosection/abuse of process, the Respondent contends that such torts are actionable under Afghan law as a consequence of the Criminal Code which makes monetary damages recoverable for the improper initiation of proceedings, relying on Mr Qasimi's oral testimony in which he referred in particular to article 6 of the Criminal Code. Further it states that there is no evidence that the Afghan authorities were aware that the Claimant's accusations were malicious and false, and therefore the Claimant rather than the authorities must be the direct actor who caused the damage155.
"Afghan law does not recognise a cause of action for tortious interference or civil conspiracy."
According to the court record:
"He testified that Shari'a provides for a tort-like cause of action only when physical injury has occurred to a person or property. He stated that because interference with an existing or prospective contractual relationship does not relate to tangible property or a person no cause of action exists under Shari'a. Professor Edge also testified that Shari'a requires that for liability to attach to a person the harm caused must be direct and that the causation principles are strict In other words, ordering a person to break a contract with another person does not make the person making the order liable because there is no causation as to the person giving the order under Shari'a."162
"If somebody complained to the police, for example, and the police arrested someone or his employee, and - that arrest and putting to the jail or detention is coming from the police, not by the person who reported. So in this situation the person who reported - actually it is a complaint It is a complaint...he submitted a complaint Or even he reported and he was wrong, still he is not entitled or liable to pay any compensation. The only thing, he should get punished."164
150.1. On 31 January 2009 Mr Drannan wrote an email to Jack Currie "following up on our earlier phone discussion about some issues about the power plant project", which was stated to be "confidential between us". In this email Mr Drannan said that "Symbian [sic] currently has more than $1.5m in payments that are more than 90 days past due" and that this did not "include invoices submitted that are less than 90 days." He went on to state "From what I understand there could be more resources thrown at the project to help increase the production and we are more than willing to do this but we need the support and cooperation of symbian [sic] in making payments faster than their current 90+ days. From what I am being advised, the project could be hit much harder with resources and substantially reduce the required completion period and we are more than willing to take on any and all work required to support this. I think the design issues are also going to be a serious issue very shortly. We have advised that we would be more than happy to supply design services from our other offices and have very experienced and professional staff on board that can attack this work very quickly."166
150.2. On 2 February 2009, Mr Drannan sent an internal email to Mr Cordner titled "Re: Symbion" in which he stated that he had "recently reviewed their payments" and that "They have paid quite a few of the substantial late invoices. Oct payments still due are about $500k. Nov payments due were pretty much paid with large invoices being paid. Dec payments are less than 45 days late so this is not a critical issue yet. From the look of things they may have just forgotten about the oct invoices. I think I need accounting to issue a late payment invoice balance due request as a reminder... this might solve the past due issues."167
150.3. On 21 February 2009, Mr Hinks wrote to Mr Drannan regarding the Respondent’s cash flow, which he stated was "extremely erratic... as a consequence of being unable to properly plan against incoming payments by our client." He advised that "a payment of $800,000 was released this week" and stated "If you would like to talk to me you can get me on + 1 646 705 2321... If you would like to meet I would be happy to do this and if you would like to see our own payment history with our client I will provide you with full transparency."168 Mr Drannan replied to this email the following day, thanking him for his email and saying "We understand most of the issues facing Symbion in this regard and appreciate the situation you are currently exposed to in regards to this project. My intent was not to disrupt the project or Symbion's operation but to try and determine what type of payments would be made so we can better plan our budgetary needs."169 Mr Hinks replied to thank Mr Drannan for his response and promising "As soon as I see the next incoming cash I will get in touch with you personally."170
150.4. On 12 March 2009 there was an email exchange between Mr Hinks and Mr Drannan in which Mr Drannan requested information about the payment of the Claimant’s invoices. Mr Hinks told Mr Drannan that the "cashflow for us on this project has gone haywire and we’ve being trying to get it resolved for the past 2 weeks with B&V in DC and Kansas... I believe that we've almost solved these issues and as soon as I know for sure I'll get in touch and give you something you can plan with."171 A few days later on 15 March 2009 Mr Hinks sent a further email to Mr Drannan stating that he was "hopeful we will resolve this in the next few days."172
150.5. On 18 March 2009, the Respondent met with LBG/B&V at B&V Overland Park office, to discuss the issues related to potential overpayment on the BOP contract, as recorded in a Memo from Mike Boehler to Pat Doherty173 (both of LBG/B&V) and minutes prepared by the Respondent174. On 27 March 2009, Mr Boehler emailed Abel B. Dunning of the Respondent and stated "It seems that we are very close, if not done, on the variance determination, but we still await your variance recovery plan. As you know we will need this before going to USAID to resolve this issue and get payment back on track. Let me know when we can expect that. Thanks!"175
150.6. On 28 March 2009, Mr Hinks emailed Mr Drannan to inform him that he had sent him an update on payment issues, "with copies of our correspondence with B&V" which he asked Mr Drannan to keep confidential but sent "to be sure you are informed." He told Mr Drannan that "A lot has occurred on this project, but things do appear to be improving" and promised him that "You will be paid as soon as things start moving properly again."176
150.7. On 30 March 2009, Mr Cordner sent an internal email to Mr Drannan informing him that he had spoken to Mr Currie the previous night, and that Mr Currie had told him in "ABSOLUTE CONFIDENCE that they are bringing in a third party audit sometime in the next couple of weeks to spring on Symbion."177
150.8. On 1 April 2009, Mr Drannan emailed Mr Currie regarding the Respondent. He stated "Unfortunately, I need to quietly speak with you confidentially about Symbion... I'm getting too many different stories (both from the site and symbion US offices) and have some serious concerns. They still have pending invoices dating back to Oct (work done in Sept) and I'm about to submit a formal notification letter to LBG for non payment so that any future payments to Symbion will be guaranteed to be paid to VICC before being paid to Symbion." He went on to state "These guys are into us now for more than $3m and counting... in 3 more weeks this will grow to almost $4m and I'm just not ready to take on that risk based upon information being passed around under the radar... "178 The next day, he forwarded the email to Mr Baryalai explaining "My intent was not to bring this to a legal situation but to find out if symbion was actually paid recently so we could get our own payment..."179
150.9. On the same day, Mr Hinks emailed Mr Drannan explaining he had received some information from site that the Claimant intended to stop work on Saturday if not paid by then and asking him to confirm if it was accurate.180 Mr Drannan replied stating that the Claimant was "becoming extremely cautious with the amount of funds currently pending for our invoices. In a few weeks time our exposure on this project will be hitting the $4million dollar range... I have continued to support Symbion by refusing to issue any stop work but as the weeks continue to pass we are still not receiving any details on payment for our invoices."181 Further, Mr Jaenisch emailed Mr Copeland and Mr Hinks with an update on the KPP Project, in the course of which he stated "I had a talk with Jack Currie this morning... He informed me that B&V has brought an estimating team to site to make a determination of our construction progress."182
150.10. On 3 April 2009, Mr Drannan sent an internal email to Mr Cordner asking him to keep him informed daily about issues on site and referred to a "Good cop... bad cop" strategy.183 On 4 April 2009 he sent a further email to Mr Cordner regarding the situation and explaining that he was "going to go ahead and prepare and present a failure letter to LUG for failure to make prompt payment as per far clauses" on the basis that LBG/B&V would be "legally obligated to see that we are paid in full if any payment is agreed to be released to symbion." Later in the email he stated "It would benefit us if symbion would walk, all past due values would have to be negotiated and paid in full before symbion can be released and then all remaining work I'm sure would be provided to us..."184
150.11. In the meantime, on 2 April 2009, Mr Boehler of LBG/B&V wrote a letter to Mr Hinks regarding subcontractor payments185. After referring to the review that it was undertaking in respect of the Respondent's payment, it stated that "...a new issue has arisen that may impact this proposed plan. On April 1, 2009, LBG/B&V received a written communication from Venco Corporation indicating that Symbion owes Venco more than $3 million in pending invoices." The letter goes on to request a subcontractor/vendor payment history on the project and various information relating to the Claimant's invoices to the Respondent.
150.12. On 2 May 2009, Mr Drannan submitted a formal letter to LBG/B&V in which he stated that the Claimant was "formally notifying LBG of the failure by Symbion to make prompt payment for supplies and services as provided per contract between Symbion Power LLC and Louis Berger."186
150.13. On 23 May 2009, after the Respondent's contract with LBG/B&V had terminated, Mr Cordner emailed Mr Drannan and Mr Baryalai with an update on the site187. At the end of the email he stated "My opinion is still to settle how to get our money and cut away from the project and any other work on the site because I just don't trust any of them." Mr Drannan replied to the email later that day, stating "Karl, lets not be too fast to turn away lbg work. Keep in mind that there is a lot of work left to do especially in the area of infrastructure... Let's try to keep on LBG's good side... neither lbg or symbion had provided actual facts about what the problem is between them so it's impossible for us to fully understand or take sides... The reality is that LBG still has more than $1 billion dollars worth of work (out of the $1.5b they were awarded) and we should try to get as much of this as possible... and sumbion has zero $$$ projects. " Later in the email he stated "...our work with LBG has not gone unnoticed. A few weeks ago I was approached by BV to work with them directly on some other projects and I actually signed an agreement to bid projects with them..."188 [emphasis in original]
152.1. The email to Mr Currie of 31 January 2009, in which he accused the Respondent on having more than $1.5 million in payments to the Claimant that were more than 90 days due. It contends that this representation was false, and that as at 31 January 2009 there were no progress invoices or purchase orders that were 90 day past due. Further, it contends that Mr Drannan knew this representation was false, referring to his email to Mr Cordner on 2 February 2009 and the only reasonable explanation for his representation to Mr Currie was that it was an attempt to drive a wedge into the already strained relationship between LBG/B&V and the Respondent190;
152.2. The email to Mr Currie on 1 April 2009, in which he said that the Respondent was now "into us now for more than $3m and counting... in 3 more weeks this will grow to almost $4m" (see paragraph 150.8 above). Again the Respondent contends that this representation was false, and that Mr Drannan should have known that his message would reasonably imply that the Respondent was overdue in payments by more than $3 million. It submits that at the time of this email, at the very most the Respondent was past due (based on a 56 day payment period) on about $1.2 million. It says that Mr Drannan not only overstated the actual total billed to the Respondent at this time (which was $2,671,521.59) but of this amount only $1,221,376.03 was past-due 56 days. Further, it says there is no evidence to support Mr Drannan's statement that the amount owed by the Respondent to the Claimant would grow to $4 million in three weeks. In fact, in the three week period following this email the Claimant only invoiced the Respondent an additional $251,127191.
157.1. It argues that initial contact was made by Mr Currie, in the phone call referred to in Mr Drannan’s email of 31 January 2009. When Mr Drannan contacted Mr Currie on 1 April 2009 this was only after repeated, fruitless attempts to secure payment from the Respondent directly. Whilst Mr Drannan’s email to Mr Currie on 31 January 2009 overstated the amount of time that some of the amounts had been due and owing, it says the amounts were generally accurate. Moreover, it contends that there is no evidence that Mr Drannan had any intention to harm the Respondent. His email suggests no action against the Respondent, save that it is encouraged to pay the Claimant. There is no evidence that LBG/B&V took any action in response to this email, or that it had any impact on its relationship with the Respondent197;
157.2. By the time of Mr Drannan’s email to Mr Currie of 1 April 2009, he had already been corresponding with Mr Hinks for months about monies the Claimant was owed. Mr Hinks had not questioned the figures referred to by Mr Drannan (on 12 March 2009 Mr Drannan had stated that the outstanding amounts would be "getting close to $3 million in a few weeks..." and on 1 April 2009 in an email to Mr Hinks stated that "In a few weeks time our exposure on this project will be hitting the $4million dollar range"}. Further, Mr Hinks had assured the Claimant that the Respondent's issues with LBG/B&V would be resolved by 30 March 2009 but on that date the Claimant instead discovered that LBG/B&V planned to audit the Respondent. Despite knowing about this audit since at least 18 March 2009, when it was referred to during the meeting between the Respondent and LBG/B&V, Mr Hinks had not updated the Claimant Mr Drannan consulted with the Claimant’s accounting department before emailing Mr Currie on 1 April 2009, and gave Mr Hinks prior notice that he would be submitting the "FAR letter". Although the Respondent challenges the amount referred to in 1 April 2009 email, it cannot dispute that it owed the Claimant millions of dollars198.
157.3. Mr Drannan had a reasonable basis to believe that the amounts stated in the 1 April 2009 and 2 May 2009 letter were or would shortly be due199.
158.1. The problems between the Respondent and LBG/B&V pre-dated the time when the Respondent stopped paying the Claimant and other subcontractors. The Respondent was aware from early in the project that it would not be able to meet the schedule and complete the project in the time allotted.
158.2. LBG/B&V criticized the Respondent's performance from the beginning of the KPP Project, citing an email from Mr Currie to Mr Copeland dated 5 August 2008201 and an email from Mr Currie to Mr Hinks dated 14 October 2008202. These criticisms continued throughout the project, and there was a tense relationship between the Respondent and LBG/B&V including criticisms of lack of site supervision, poor material control and reliance on ABM (a subcontractor). Correspondence from the time shows Mr Hinks admitting that the Respondent had been unable to meet design and material requirements amongst other issues (citing Mr Hinks' reply to Mr Currie's letter of 29 October 2009203). By mid-November 2008 the relationship had grown toxic, as shown by Mr Currie's internal email to Jack Whippen and Bob Bell on 15 November 2008204.
158.3. The prior Tribunal enforced LBG/B&V's imposition of more than one million dollars of liquidated damages and rejected the Respondent's argument that those parties had an unwritten understanding that LBG/B&V would not assess liquidated damages205.
158.4. The Respondent’s assertion that it had reached a settlement with LBG/B&V in mid-March 2009 but which was then thwarted by Mr Drannan conspiring with Mr Currie is counter-factual and unsupported by evidence. In fact, the Respondent had not reached a settlement with LBG/B&V, as demonstrated by the Memo of the meeting on 18 March 2009206, and matters were far from resolved after that meeting and remained in dispute through to termination of the BOP Contract There was a two-day mediation between the Respondent and LBG/B&V on 18-19 May 2009, however it was unsuccessful and the BOP Contract was mutually terminated164.
158.5. The evidence shows that the Claimant worked to support the Respondent throughout the KPP Project, and this was recognised by the fact it issued the Claimant $4 million in change order work. The Claimant was also the logical subcontractor to perform the remaining work on the KPP Project after the BOP Contract between the Respondent and LBG/B&V had terminated, however it made no difference to the Claimant whether it performed that work for the Respondent or LBG/B&V directly207.
158.6. Finally, there was no preferential treatment of the Claimant by LBG/B&V after termination of the Respondent's contract. All three of the Respondent's major subcontractors entered into nearly identical Letters of Contract with LBG/B&V. LBG/B&V did not pay any part of the Respondent’s debt to the Claimant. It also issued formal RFPs to bidders for scope of work items remaining to be completed and oversaw a competitive process which was reviewed by USAID. The Claimant got no extra compensation for performing the follow-on work208.
180.1. On 23 May 2009, in an internal email to Mr Cordner, Mr Drannan stated "Also, we will not allow symbion to remove any equipment or materials from the site. Before they attempt to leave, I want to be notified and we will see that the afghan police arrive at the site and we wil take possession of everything they own... until we are guaranteed full payment...just as a precaution. I may advise Ustad to go ahead with a court case against symbion right now and this will not only hold their equipment, but all their staff as well since they will not allow any symbion staff to leave the country until payment is made in full to us. This would be a real shock to our buddy Del [Mr Copeland] especially if he was caught in Afghanistan and was not allowed to leave until subs are paid in full. We have the authority to do this, I have checked with our contract and local authorities. I have held off on this until all other options were tried." He continued to state "We don't have any clear understanding of how or when we will get paid and the only hold we have right now is on symbion, their possessions, and their staff I hate to say this but we have a major amount of money and major concerns about this money..."237
180.2. Following this email, on 28 or 29 May 2009 Mr Baryalai wrote an undated letter to the Afghan Attorney General Office stating that the Respondent owed the Claimant $3,460,653.93, and "as precautionary measures, we hope that officials of the above company be summoned, and the Ministry of Interior Affairs should be advised to prohibit their exit from Afghanistan until settlement of accounts with us."238
180.3. On 16 June 2009, the Director for Counter Criminal Deparment, Major General Sayed Ab.Ghafar Sayedzada, wrote a report of a complaint made by Mr Safiullah, son of Abdul Samad, who claimed that he had monetary transactions with the Respondent but their accounts had not been settled and that "Director of the above mentioned company, Mr. Steve, has intended to escape from Afghanistan."239 On the same day, a person named Safiullah Anis employed by the Claimant emailed Mr Drannan and Mr Baryalai reporting that "Attorney office gave a demand to Symbion to provide a letter stating; why they are delaying the payment to VICC, why they are not paying VICC; this letter should be with specific detail and information, the should also state [sic], when they are going to pay VICC, the reason to get this letter from Symbion as per our assigned attorney, is to get signed documents from Symbion to let government attorney support to ask a report from LBG on the invoices and progress of work. Del is trying to get his passport back and reasoning his daughter's birthday, we will let you know by tomorrow, immediately VICC refused this request, but we will let you know by tomorrow."240
180.4. On 18 June 2009, Mr Copeland sent an email to Mr Hinks stating that "Ramin was in the AG's office a 0730 local and has filed a complaint against me and I will not receive my passport today or any other date until we pay all of the local vendors... We should get Steve out today, but Ramin is paying off every bad guy in Kabul."241
180.5. On the same day, a memorandum was written by a lawyer acting on behalf of the Respondent, recording a conversation with the U.S. Consular Officer Brendan O'Brien about Messrs Copeland and Jaenisch's detention. The memorandum states that Mr O'Brien "...said that Symbion employees Del Copeland and Steve Jaenisch were in the custody of the Afghan police and that the Chief of Police had assured their safety... The Chief of Police gave two reasons for detaining Del and Steve: (1) they owed money and (2) they were being charged with the criminal offense of attempting to flee the country. The Chief of Police further stated to Mr O'Brien that Del and Steve would not be released until Symbion produced a letter guaranteeing payment to the 30-40 vendors owed money. It was not clear whether VICC was included in that group." The memorandum goes on to state "We also asked Mr O'Brien about the Afghan airport authorities' refusal to let Steve board a plane to Dubai on June 17, 2009. Mr O'Brien explained that he was called to the airport when Steve was not permitted to board his plane. When he arrived the General in charge of airport security was detaining Steve and numerous VICC representatives were present and interacting with the General... At the end of the confrontation, one of the VICC employees called Michael Drannan to report on what had transpired... Mr O'Brien spoke briefly with Michael Drannan. Drannan denied being involved with detaining Steve (which is inconsistent with what Mr O'Brien observed including the unsolicited briefing provided by a VICC employee at the end of the confrontation)."242
180.6. On 19 June 2009, counsel instructed by the Respondent (Williams & Connolly LLP) wrote to B&V and stated "I have definite confirmation that Black & Veatch's agents, including Mr Schaeffer (the new project manager) and others, have been telling Symbion subcontractors and others that Symbion recently received a significant payment from Black and Veatch on the Balance of Plant contract for the express purpose of paying its subcontractors. This is an outright lie. As a direct consequence of this false statement, Symbion personnel have been arrested and jailed by the Afghan authorities..."243
180.7. On 5 August 2009, the Public Civil and Commercial Rights Prosecution Department of the Attorney General Office gave judgment directing that the dossier be referred to the District Commercial Court. The judgment includes a statement that "Concurrent with investigation of the dispute, (5) petitions bearing instruction of the Attorney General Office have been received by this Office. Upon review thereof, the afore-mentioned have claimed USD 215,770 against officials of Symbion Company on account of sale of goods."244
186.1. There were a number of other unpaid local vendors agitating for payment at the same time as the detention and at least five of them had initiated criminal complaints, which were the proximate cause of the detention. It says that these criminal actions were apparently orchestrated by the Respondent's former country director, Ramin Habibi, who unbeknownst to the Respondent was also secretly a director of Hamd Oil, one of the vendors to whom the Respondent owed the most money. Mr Jaenisch testified to seeing Mr Habibi when they left the restaurant to go to the U.S. on 18 June 2009. The Claimant submits that it likely that he filed one of the five criminal complaints. A person called Mohammed Arish, who was employed by the Respondent, may also have played a role in the arrests. The local vendors were hostile in mood, to be contrasted with the Claimant personnel alleged to be present. The U.S. Consular Officer negotiated the release of Messrs. Copeland and Jaenisch by obtaining a promise to pay those vendors, which reflected the Memorandum prepared by Greg Bowman on 18 June 2009 which recorded that "Mr O’Brien believes that there are about 30 or so low level contractors owed a total of about $200,000 and that if they are paid off, Del and Steve will be released. ". After these payments were made, Messrs Copeland and Jaenisch were given their passports and released. The amounts the Respondent owed the Claimant remained outstanding251.
186.2. The Claimant confined its actions to the filing of a civil and commercial complaint, a filing that happened on 28 May 2009, many weeks before the criminal complaints were filed around 16-17 June 2009 and the actual detention on 18 June 2009, suggesting the proximate cause of the arrests was the criminal complaints. There were two branches of the Attorney General Office, civil and criminal, and the Claimant's complaint was addressed to the civil and commercial branch. As such, it was referred to the District Commerical Court The Attorney General Office could not impose detention in response to a civil complaint Mr Drannan testified that he had not directed any Claimant employee to file a criminal complaint In particular, he denied that Safiullah son of Abdul Samad was an employee of the Claimant252.
186.3. The Respondent's witnesses who made the allegations of the Claimant's involvement had no direct knowledge of what actually caused the arrests as they were not directly involved in the negotiations with the Attorney General Office and did not speak or read the native language. Mr Jaenisch had no personal knowledge of the proceedings at the Attorney General Office. Further Mr Hinks had no direct knowledge of the contents of the conversation between Mr Drannan and Mr O’Brien. Those matters were handled by Mr Copeland, who did not testify in this arbitration. Further, Mr Jaenisch could not identify by name or with any specificity the Claimant personnel who he said were present at the various stages of proceedings253.
"Both Mr Copeland and I were in significant danger. Because of the endemic corruption in Afghanistan we could have been kidnapped and held hostage for ransom, injured or even killed...indeed, Mr Copeland was told by an Afghan partner of Mr Drannan that 'Mr Drannan can have him put in a hole in the ground"’
"It was really a scary time, because I know in Afghanistan, they are not averse to cutting off hands and fingers and limbs to extort payment. That's the kind of standard in that part of the world. You know if they don't get their money, they are not averse to shooting you.
* * * * *
"I think the worst part was talking to my wife when I was in the Embassy and not wanting to tell her that I might die here, so, you know, all I could say [was] 7 hope to be home in a couple of days'"255
"I may advise USTAD to go ahead with a court case against Symbion right now and this will not only hold their equipment but also their staff as well since they will not allow any Symbion staff to leave the country until payment is made in full to us. This will be a real shock to our buddy Del [Mr Copeland] especially if he was caught in Afghanistan and was not allowed to leave until subs are paid in full. We have the authority to do this, I have checked with our contract and local authorities"258
"Rather than arbitrate, as it was contractually required to, VICC proceeded in the Afghan legal system, knowing the attendant fear that its actions would engender, as Messrs. Jaenisch and Copeland could not leave the country, were arrested and, when freed, were further harassed by VICC."260
"VICC's actions towards Mr Copeland and Mr Jaenisch in June 2009 entitle Symbion to recover for malicious prosecution/abuse of process."261
and in its Post-Hearing Memorial of 22 January 2016 where it specifically pleaded Nevada law in support of the malicious prosecution/abuse of process claim citing Section 155 of the Nevada Restatement (of Conflict of Laws)262 but again made no mention of breach of arbitration agreement.
"Q: And you are aware that, under your contract with Symbion, that you had a mandatory arbitration clause right? That's how disputes were to be resolved under the contract correct?
A: That's a part of the contract, yes.
Q: OK. Do you dispute that the contract sets forth that disputes regarding the contract are to be settled by ICC arbitration?"263
203.1. Section 48 of the Arbitration Act 1996 recognizes and gives effect to party autonomy in respect of remedies and contains nothing to preclude an award of punitive damages, citing Gary Born as support for this proposition267.
203.2. Article 4(3)(d) of the ICC Rules does not limit the relief requested to non-punitive damages. Further, pursuant to Article 2(1) of the ICC Rules the parties and/or the Tribunal are free to select and/or apply a governing substantive law that allows punitive damages268.
203.3. Under English law damages are to be assessed in accordance with the substantive law governing tortious conduct, pursuant to Article 15 of Regulation (EC) No 864/2007 on the Law Applicable to Non Contractual-Obligations, as adopted via the Law Applicable to Non-Contractual Obligations (England and Wales and Northern Ireland] Regulations 2008 ("Rome II"). As the Respondent submits that Nevada law applies to the Counterclaims, pursuant to Rome II it also applies to to remedy and the assessment of damages269.
205.1. First, such awards are extremely rare in international arbitration, being described by Gary Born as "unusual" in practice. As of 2013, it says there are no reported ICC awards in which punitive damages were granted272.
205.2. Second, punitive damages are not available under Afghan law and hence such an award is unlikely to be enforced by Afghan courts. The Claimant relies on Mr Mahjoor's testimony that punitive damages are not permitted under Islamic law as a recovery in excess of compensation for actual harm to property or person. Under the principle of lex loci delicti and the Restatement, Afghan law governs Counts I and III of the counterclaims. English procedural law does not control the award of damages in this case273.
205.3. Third, even if Nevada law applies (which the Claimant denies), the Respondent has failed to establish that it is entitled to punitive damages as it has failed to meet the high standard required to prove fraud or malice274.
"Symbion turned a simple commercial collection case, in which VICC sought payment for unpaid invoices that were never disputed during performance, into complex litigation by asserting a three count 24 million counterclaim for tortious interference, breach of good faith and fair dealing and malicious prosecution/abuse of process."280
"Symbion has spent considerable time and money complying with its discovery obligations, seeking to obtain compliance from VICC with respect to its obligations and fending off the VICC‘s meritless and untimely attempt to obtain additional documents"298.
"Venco's claims in this arbitration arise from its false claim that Symbion continues to owe"302 the Claimant on the unpaid PIs and POs - somewhat of a strong assertion taking into account that the issue was whether the Respondent was entitled to rely on a 'pay-if-paid' provision for not paying debts which otherwise may have been thought to be due.
(1) THE CLAIMANT SUCCEEDS IN ITS CLAIM AND THUS THE RESPONDENT SHALL PAY TO THE CLAIMANT THE SUM OF US$4,068,659 (FOUR MILLION SIXTY EIGHT THOUSAND AND SIX HUNDRED AND FIFTY NINE UNITED STATES DOLLARS) TOGETHER WITH INTEREST AT 4% (FOUR PERCENT) PER ANNUM COMPOUNDED MONTHLY FROM 1 MAY 2016 UNTIL FULL PAYMENT THEREOF.
(2) THE RESPONDENT FAILS IN ITS COUNTERCLAIMS WHICH ARE THUS DISMISSED.
(3) THE CLAIMANT SHOULD BE AWARDED PAST INTEREST ON THE UNPAID PROGRESS INVOICES AND PURCHASE ORDERS AND THUS THE RESPONDENT SHOULD PAY TO THE CLAIMANT THE SUM OF US$1,243,580.78 (ONE MILLION TWO HUNDRED AND FORTY THREE THOUSAND FIVE HUNDRED AND EIGHTY UNITED STATES DOLLARS AND SEVENTY EIGHT CENTS) TOGETHER WITH INTEREST AT 4% (FOUR PERCENT) PER ANNUM, COMPOUNDED MONTHLY FROM 1 MAY 2016 UNTIL FULL PAYMENT THEREOF.
(4) THE RESPONDENT TO PAY FORTHWITH TO THE CLAIMANT THE BALANCE OF THE LEGAL COSTS IN THE SUM OF US$2,690,277.00 (TWO MILLION SIX HUNDRED AND NINETY THOUSAND TWO HUNDRED AND SEVENTY SEVEN UNITED STATES DOLLARS) WHICH THE TRIBUNAL HAS FOUND IN THIS AWARD TO BE DUE AND OWING TO THE CLAIMANT.
(5) THE ICC COURT OF ARBITRATION HAVING FIXED THE ARBITRATION COSTS AT US$920,000 (NINE HUNDRED AND TWENTY THOUSAND UNITED STATES DOLLARS), THE RESPONDENT TO REIMBURSE THE CLAIMANT FOR THE ONE HALF SHARE OF THE ADVANCES IN COSTS, AS PAID BY IT, IN THE SUM US$460,000 (FOUR HUNDRED AND SIXTY THOUSAND UNITED STATES DOLLARS).
(6) INTEREST ON ALL LEGAL AND ARBITRATION COSTS FOUND HEREIN TO BE DUE AND OWING TO THE CLAIMANT SHALL CARRY SIMPLE INTEREST AT 4% PER ANNUM FROM THE DAY AFTER THE DATE OF THIS AWARD UNTIL FULL PAYMENT THEREOF.
(7) SAVE AS OTHERWISE PROVIDED IN THIS AWARD, ANY OTHER CLAIMS OR PRAYERS FOR RELIEF MADE IN THE COURSE OF THIS ARBITRATION BY EITHER PARTY ARE REJECTED.