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Decision on Annulment

Table of Selected Abbreviations/Defined Terms

Additional Request Applicants’ additional request in defense of the integrity and the fairness of the proceeding dated 27 April 2019
ICSID Arbitration Rules ICSID Rules of Procedure for Arbitration Proceeding in force as of 10 April 2006
Applicants or Claimants Mr. Victor Pey Casado and Foundation President Allende
Annulment Application Applicants’ application for annulment of the award rendered on 13 September 2016
Annulment Proceeding Second annulment proceeding registered on 25 October 2017
Articles on State Responsibility Articles on Responsibility of States for Internationally Wrongful Acts, annex to United Nations General Assembly resolution 56/83 of 12 December 2001.
BIT or Treaty Agreement between the Kingdom of Spain and the Republic of Chile for the Reciprocal Protection and Promotion of Investments signed on 2 October 1991 and entered into force on 29 March 1994
C-[#] Claimants’ exhibits in the Annulment Proceeding
CL-[#] Claimants’ legal authorities in the Annulment Proceeding
Committee Ad hoc Committee constituted on 20 December 2017 in the Annulment Proceeding
Counter-Memorial on Annulment Respondent’s Counter-Memorial on Annulment dated 20 July 2018
Decision No. 43 Decision of the Santiago court dated 28 April 2000
RA-[#] Respondent’s exhibit in the Annulment Proceeding
FET, FET-standard Standard of Fair and Equitable Treatment (Article 4 BIT)
First Annulment Decision Decision rendered by the First Committee on 18 December 2012
First Annulment Proceeding Annulment proceeding registered on 6 July 2009
First Arbitration Arbitration proceeding submitted on 7 November 1997 and registered on 20 April 1998
First Award Award rendered by the First Tribunal on 8 May 2008
First Committee Ad hoc Committee composed of Professor Piero Bernardini, Professor Ahmed El-Kosheri and Mr. L. Yves Fortier, C.C., Q.C. constituted on 22 December 2009 in the First Annulment Proceeding
First Session on Annulment First Session held on 16 February 2018 in the Annulment Proceeding
First Tribunal Tribunal composed of Professor Pierre Lalive, Mr. Mohammed Chemloul and Professor Emmanuel Gaillard reconstituted on 14 July 2006
Foundation Foundation President Allende, established under Spanish law
Hearing on Annulment Hearing held from 12 to 14 March 2019
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965
ICSID or the Centre International Centre for Settlement of Investment Disputes
Memorial on Annulment Applicants’ Memorial on Annulment dated 27 April 2018
R-[#] Respondent’s exhibit in the Resubmission Proceeding
RL-[#] Respondent’s legal authority in the Resubmission Proceeding
Rectification Decision Rectification decision rendered by the Resubmission Tribunal on 6 October 2017
Rejoinder on Annulment Respondent’s Rejoinder dated 25 January 2019
Reply on Annulment Applicants’ Reply to the Respondent Counter- Memorial on Annulment dated 9 November 2018
Respondent or Chile The Republic of Chile
Resubmission Award or the Award Award issued by the Resubmission Tribunal on 13 September 2016 and as rectified by the Rectification decision rendered by the Resubmission Tribunal on 6 October 2017
Resubmission Hearing Hearing held in London in the Resubmission Proceeding from 13 to 16 April 2015
Resubmission Proceeding Resubmission arbitration registered on 8 July 2013
Resubmission Tribunal or Tribunal Tribunal composed of Sir Franklin Berman, Mr. Alexis Mourre and Mr. V. V. Veeder reconstituted on 31 January 2014
RALA-[#] Respondent’s legal authority in the Annulment Proceeding
Tr. Day [#] ([Date]) [page],[line] Transcript of the Hearing on Annulment

I. INTRODUCTION

1.
This case concerns an application for annulment (the "Annulment Application") of the award rendered on 13 September 2016, as rectified by the decision of 6 October 2017 (the "Resubmission Award") in the arbitration proceeding (ICSID Case No. ARB/98/2) between Víctor Pey Casado and the Foundation President Allende (together the "Applicants" or the "Claimants") and the Republic of Chile ("Chile" or the "Respondent," and together with the Applicants, the "Parties"). The Parties’ representatives and their addresses are listed above on page (i).
2.
The Resubmission Award was rendered by a tribunal composed of Sir Franklin Berman (President), Mr. Alexis Mourre and Mr. V.V. Veeder (the "Resubmission Tribunal").
3.
The dispute in the original proceeding (the "First Arbitration") was submitted by the Claimants to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on 7 November 1997 on the basis of the Agreement between the Kingdom of Spain and the Republic of Chile for the Reciprocal Protection and Promotion of Investments entered into force on 29 March 1994 (the "BIT" or the "Treaty") and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, dated 18 March 1965 (the "ICSID Convention").
4.
The dispute arose from the confiscation of the assets of two Chilean companies (Consorcio Publicitario y Periodístico S.A. "CPPSA" and Empressa Periodística Clarín Ltda "EPC Ltda") following the coup d’état led by General Augusto Pinochet in 1973. In the arbitration, the Claimants alleged inter alia that the Respondent unlawfully expropriated their investments in CCPSA and EPC Ltda and failed to accord them fair and equitable treatment. In particular, the Claimants claimed that Chile discriminated against them and denied them justice in connection with the request that Mr. Pey Casado filed with the Chilean courts in 1995 seeking reparation for the confiscation of a Goss printing press (the "Goss press case").1
5.
In an award dated 8 May 2008 (the "First Award"), the tribunal composed of Professor Pierre Lalive, Mr. Mohammed Chemloul and Professor Emmanuel Gaillard (the "First Tribunal") dismissed the Claimants’ expropriation claim finding that the expropriation of El Clarín (the Chilean newspaper published by CCPSA and EPC Ltda) was not covered ratione temporis by the BIT. The First Tribunal also found that the Respondent had breached Article 4 of the BIT due to its courts’ failure to render a decision in the Goss press case for seven years (denial of justice) and due to its ministerial decision to award compensation to persons other than Mr. Pey Casado and the Foundation (the "Decision No. 43") (discrimination). After dismissing all other claims, the First Tribunal awarded the Claimants USD 10,132,690.18 (plus compound interest) in damages, USD 2,000,000 in legal fees and costs, and USD 1,045,579.35 in procedural costs.2
6.
On 6 July 2009, the ICSID Secretary-General registered Chile’s application for annulment of the First Award (the "First Annulment Proceeding"). On 18 December 2012, the ad hoc committee composed of Professor Piero Bernardini, Professor Ahmed El-Kosheri and Mr. L. Yves Fortier, (the "First Committee") issued a decision partially annulling the First Award (the "First Annulment Decision"). Specifically, the First Committee annulled paragraph 4 of the dispositif of the First Award and the corresponding paragraphs in the reasoning.3
7.
On 18 June 2013, the Claimants filed a new request for arbitration pursuant to Article 52(6) of the ICSID Convention (the "Resubmission Proceeding"). In the Resubmission Proceeding, the Claimants argued inter alia that the daughter of Mr. Pey Casado (Ms. Coral Pey Grebe) was the proper party to the Resubmission Proceeding (being the assignee of Mr. Pey Casado’s shares in CPPSA and EPC Ltda),4 and sought damages in the amount of USD 150 million for the Respondent’s breaches of the BIT, plus costs.
8.
The Resubmission Award was rendered on 13 September 2016. The Resubmission Tribunal ruled that Ms. Coral Pey Grebe could not be a claimant in her own right in the Resubmission Proceeding. By the same award, it further found that the Claimants failed to prove any quantifiable injury due to a breach of Article 4 of the BIT (and thus no financial compensation could be awarded on this account) and dismissed the Claimants’ claims for unjust enrichment and moral damages. The Claimants were ordered to bear three quarters of the arbitration costs.5
9.
The Claimants applied for the rectification of four errors in the award of 13 September 2016 pursuant to Article 49 of the ICSID Convention. During the rectification proceeding, the Claimants unsuccessfully requested that two of the members of the Resubmission Tribunal (Sir Franklin Berman and Mr. V.V. Veeder) be disqualified. In a decision rendered on 6 October 2017 (the "Rectification Decision"), the Resubmission Tribunal rectified paragraphs 61, 66, 198, and paragraph 2 of the dispositif of the Resubmission Award and ordered that the Claimants bear the costs of the rectification proceeding.6
10.
In this annulment proceeding, the Applicants are seeking the annulment of the Resubmission Award on the following grounds: (i) improper constitution of the Resubmission Tribunal (Article 52(1)(a) of the ICSID Convention); (ii) manifest excess of powers (Article 52(1)(b) of the ICSID Convention); (iii) serious departure from a fundamental rule of procedure (Article 52(1)(d) of the ICSID Convention); and (iv) failure to state the reasons on which the award is based (Article 52(1)(e) of the ICSID Convention).7

II. PROCEDURAL HISTORY

11.
On 10 October 2017, the Applicants filed the Annulment Application with ICSID pursuant to Article 52 of the ICSID Convention and Rule 50 of the ICSID Rules of Procedure for Arbitration Proceedings ("ICSID Arbitration Rules").8 The Annulment Application contained a request for the stay of the enforcement of the Resubmission Award pursuant to Article 52(5) of the ICSID Convention, and Arbitration Rule 54(2) (the "Stay Request").
12.
On 25 October 2017, the ICSID Secretary-General registered the Annulment Application and notified the Parties that the enforcement of the Award was provisionally stayed pursuant to Arbitration Rule 54(2).
13.
On 20 December 2017, the ad hoc Committee (the "Committee") was constituted in accordance with Article 52(3) of the ICSID Convention. Its members are: Professor Dr. Rolf Knieper (German), serving as President, Professor Dr. Nicolas Angelet (Belgian) and Professor Yuejiao Zhang (Chinese). All members were appointed by the Chairman of the Administrative Council.
14.
On the same date, the Parties were informed that the Annulment Proceeding was deemed to have begun on that date, and that Mr. Benjamin Garel, ICSID Legal Counsel, would serve as Secretary of the Committee. The Parties were later informed that Ms. Laura Bergamini, ICSID Legal Counsel, would replace Mr. Garel as Secretary of the Committee.
15.
On 21 December 2017, the Applicants submitted a request for the production of certain documents, along with exhibits C-208 through C-212.
16.
On 22 December 2017, the ICSID Secretariat wrote to the Parties regarding arrangements for the first session and circulated a draft Procedural Order No. 1 providing inter alia directions on the conduct of the proceeding. By the same letter, the Parties were informed of the Committee’s decision to extend the provisional stay of enforcement of the Resubmission Award.
17.
On 30 December 2017, the Applicants submitted their comments on draft Procedural Order No. 1.
18.
On 31 December 2017, in light of the Parties’ availabilities for the first session, the Committee requested the parties to indicate whether they would agree to hold the first session beyond the time period set forth in Arbitration Rule 13. The Parties responded on 5 January 2018.
19.
On 9 January 2018, the Committee decided inter alia to hold the first session in person on 16 February 2018 (the "First Session on Annulment").
20.
On 12 and 13 January 2018, after consulting the Parties, the Committee confirmed that the First Session on Annulment would be held in Washington, D.C.
21.
On 15 January 2018, the Applicants submitted additional comments on draft Procedural Order No. 1.
22.
On 19 January 2018, the Respondent submitted its comments on draft Procedural Order No. 1, its observations on the Stay Request and the Applicants’ request for production of documents, along with exhibits RA-0001 through RA-0033 and legal authorities RALA-0001 through RALA-0012.
23.
On 22 January 2018, the Applicants requested leave to respond to the Respondent’s comments.
24.
On 23 January 2018, the Committee set forth time limits for additional written submissions from the Parties on the Stay Request and the Applicants’ request for production of documents.
25.
On 2 February 2018, the Applicants responded to the Respondent’s comments of 19 January 2018 (fding exhibits C-213 through C-241) and submitted additional comments on draft Procedural Order No. 1.
26.
On 12 February 2018, the Respondent replied to the Applicants’ submission of 2 February 2018 (fding exhibits RA-0034 and RA-0035 and legal authorities RALA-0013 through RALA-0015).
27.
On 16 February 2018, the Committee held the First Session on Annulment at the World Bank’s premises in Washington, D.C. Participating in the session were:

Members of the Committee :
Professor Dr. Rolf Knieper, President
Professor Dr. Nicolas Angelet
Professor Yuejiao Zhang

ICSID Secretariat :
Dr. Laura Bergamini, Secretary of the Committee

Representing the Applicants :
Dr. Juan E. Garcés, Garcés y Prada, Abogados
Mr. Hernan Garcés Duran, Garcés y Prada, Abogados
Professor Robert Lloyd Howse, New York University, School of Law
Ms. Alexandra Muñoz, Gide, Loyrette, Nouel (by video-conference)
Ms. Francisca Duran Ferraz de Andrade, President Allende Foundation Management

Representing the Respondent :
Mr. Paolo Di Rosa, Arnold & Porter
Ms. Mallory Silberman, Arnold & Porter
Ms. Caroline Kelly, Arnold & Porter
Mr. German Savastano, Arnold & Porter
Ms. Aimee Kneiss, Arnold & Porter

28.
During the First Session on Annulment, the Parties and the Members of the Committee discussed draft Procedural Order No. 1 and the Applicants’ request for production of documents. The Parties further presented oral pleadings on the Stay Request and agreed on a procedural calendar for the Annulment Proceeding (including a document production phase relating to certain documents). The First Session on Annulment was recorded and transcribed (in English and French). Copies of the transcripts were subsequently transmitted to the Parties and the Committee.9
29.
On 7 March 2018, the Committee issued Procedural Order No. 1.
30.
On 15 March 2018, the Committee issued a Decision on the Stay Request (the "Stay Decision").10
31.
On 16 March 2018, the Applicants requested leave to submit expert reports and documents regarding the functioning of Essex Court Chambers pursuant to paragraphs 16(3) through 16(5) of Procedural Order No. 1. The Applicants further informed the Committee that Mr. Toby Cadman had joined the Applicants’ legal team.
32.
On 19 March 2018, the Applicants submitted a document concerning the powers of Mr. Hernán Garcés Durán to represent them.11
33.
On 20 March 2018, Chile responded to the Applicants’ request of 16 March 2018 and submitted legal authorities RALA-0016 and RALA-0017.
34.
On 23 March 2018, the Committee took note that Dr. Juan Garcés and Mr. Hernán Garcés Durán were acting in the Annulment Proceeding as agents of the Applicants while Ms. Muñoz, Ms. Malinvaud, Professor Howse, and Mr. Toby Cadman were acting as counsel.
35.
On 24 March 2018, the Committee decided on the Applicants’ request of 16 March 2018.
36.
On the same date, the Applicants submitted documents concerning the powers of Dr. Juan Garces to represent Mr. Pey Casado, the Foundation and Ms. Coral Pey Grebe.
37.
On 29 March 2018, the Applicants requested leave to submit expert reports and documents pursuant to paragraphs 16(3) and 16(5) of Procedural Order No. 1 and submitted legal authorities CL-258 through CL-260.
38.
On 6 April 2018, the Respondent responded to the Applicants’ request of 29 March 2018.
39.
On 13 April 2018, the Committee ruled on the Applicants’ request of 29 March 2018.
40.
On 17 April 2018, the Applicants submitted additional documents to the Secretariat, which were not transmitted to the Committee in accordance with paragraph 16(7) of Procedural Order No. 1.
41.
On 20 April 2018, the Respondent provided its comments on the Applicants’ submission of 17 April 2018.
42.
On 24 April 2018, the Committee invited the Applicants to submit the documents attached to their communication of 17 April 2018 when filing their memorial on annulment and took note of the Respondent’s request that the costs relating to the exchanges on the admissibility of evidence be taken into consideration when allocating the costs of the proceeding.
43.
On 27 April 2018, the Applicants filed a Memorial on Annulment along with several exhibits and legal authorities (the "Memorial on Annulment").
44.
On the same date, the Applicants filed an additional request in defense of the integrity and the fairness of the proceeding, along with a number of exhibits and legal authorities (the "Additional Request").
45.
On 29 April 2018, the Applicants submitted a corrected version of exhibit C-284f.
46.
On 3 May 2018, the Committee invited the Respondent to provide its comments on the Additional Request, if any, in its Counter-Memorial on Annulment.
47.
On 12 May 2018, the Applicants submitted a courtesy translation into English of the Memorial on Annulment, along with a corrected version of the Memorial on Annulment in French.
48.
On 15 May 2018, the Centre acknowledged receipt of a corrected version of the Memorial on Annulment along with a list of corrigenda and exhibit C-292.
49.
On 17 May 2018, the Applicants filed an electronic copy of exhibit C-292 (in French and Spanish).
50.
On 25 May 2018, the Centre acknowledged receipt of hard copies of several exhibits submitted by the Applicants.
51.
On 12 July 2018, the Respondent submitted updated powers of attorney for its counsel.
52.
On 20 July 2018, the Respondent submitted its Counter-Memorial along with several exhibits and legal authorities (the "Counter-Memorial on Annulment"). In the Counter-Memorial on Annulment, the Respondent responded to the Additional Request and requested that the Committee reconsider the Stay Decision.
53.
On 9 August 2018, the Committee dismissed the Respondent’s request for reconsideration of the Stay Decision and fixed time limits for further exchanges on the Applicants’ Additional Request.
54.
On 20 August 2018, the Applicants submitted a request for the production of documents and a translation into French of exhibit C-220.
55.
On 21 August 2018, the Respondent provided comments on the Applicants’ request for production of documents and submitted a letter that it had addressed to the Applicants on 9 August 2018.
56.
On the same date, the Applicants filed a corrected version of the request for production of documents.
57.
On 30 August 2018, the Committee issued Procedural Order No. 2 concerning the Applicants’ request for production of documents.12
58.
On 8 October 2018, the Applicants informed the Committee that Mr. Pey Casado had passed away.
59.
On 10 October 2018, the Committee invited the Applicants to indicate how they proposed the proceeding should move forward following Mr. Pey Casado’s passing, which they did on 12 October 2018. On 18 October 2018, the Respondent provided its comments on the Applicants’ proposal.
60.
On 19 October 2018, the Committee took note of the Parties’ agreement that the Annulment Proceeding should continue between the Applicants and the Respondent, and that Ms. Coral Pey Grebe should continue to be treated as Mr. Pey Casado’s representative for the purposes of the proceeding.13 The Committee further confirmed that the procedural calendar annexed to Procedural Order No. 1 remained in force.
61.
On 9 November 2018, the Applicants filed a Reply to the Respondent’s Counter-Memorial on Annulment (the "Reply on Annulment") along with numerous exhibits and legal authorities. On the same date, the Applicants also requested that (i) the ICSID Secretary-General transmit to the Parties and the Committee the responses that she had received from Mr. V.V. Veeder and Sir Franklin Berman regarding the Claimants’ letter of 20 September 2016; and (ii) the Committee identify before the hearing, the topics, questions or legal provisions requiring clarifications at the hearing.
62.
On 13 November 2018, the ICSID Secretary-General answered to the Applicants’ request of 9 November 2018.
63.
On 16 November 2018, the Respondent provided comments on the Applicants’ proposal of 9 November 2018.
64.
On 20 November 2018, the Committee indicated the list of topics, legal provisions and/or questions to be addressed at the hearing, if any, would be transmitted to the Parties on or around 19 February 2019.
65.
On 27 November 2018, the Applicants submitted a courtesy translation into English of their Reply on Annulment.
66.
On 6 December 2018, the Centre inter alia acknowledged receipt of two subsequent revised versions of the Reply on Annulment (with their respective lists of corrigenda).
67.
On 19 December 2018, the Respondent requested that the Committee reconsider the length of the hearing set forth in the procedural timetable annexed to Procedural Order No. 1. On the following day, the Applicants opposed to the Respondent’s request. The Parties further exchanged communications regarding the proposed duration of the hearing on 27 December 2018 and 3 January 2019.
68.
On 9 January 2019, the Committee informed the Parties that it would determine the exact days reserved for the hearing upon receipt of the Respondent’s rejoinder on annulment.
69.
On 14 January 2019, the Applicants submitted a letter regarding a decision of the Santiago Court of Appeal of 15 November 2018, along with several exhibits and legal authorities. On the same date, the Centre transmitted the Applicants’ letter to the Committee without its attachments pursuant to paragraph 16(7) of Procedural Order No. 1.
70.
On 15 January 2019, the Committee invited the Respondent to provide its comments on the Applicants’ communication of 14 January 2019, which the Respondent did on 18 January 2019.
71.
On 22 January 2019, the Committee invited the Applicants to specify what exceptional circumstances would justify the admission into the record of the decision of the Santiago Court of Appeal and the legal authorities attached to their letter of 14 January 2019.
72.
On 25 January 2019, the Respondent filed its Rejoinder on Annulment (the "Rejoinder on Annulment") together with a number of exhibits and legal authorities.
73.
On 28 January 2019, the Applicants responded to the Committee’s request of 22 January 2019. The Respondent answered the Applicants’ letter on 1 February 2019.
74.
On 4 February 2019, the Committee decided that the hearing would be held from 12 to 14 March 2019 (with an additional day in reserve) and invited the Parties to liaise and agree on its organization.
75.
On 5 February 2019, the Committee decided to admit into the record the documents attached to the Applicants’ email of 14 January 2019.
76.
On 6 February 2019, the Applicants filed a motion to exclude a few exhibits submitted by the Respondent with its Rejoinder on Annulment from the record. The Respondent responded to the Applicants’ motion on 12 February 2019.
77.
On 14 February 2019, the Committee invited the Parties to confer regarding the language(s) to be used at the pre-hearing organizational meeting. The Parties reverted to the Committee on this issue on 15, 19 and 21 February 2019.
78.
On 19 February 2019, the Committee transmitted to the Parties a preliminary list of topics and questions to be addressed at the hearing. The Committee clarified that this preliminary list of topics and questions would not limit in any manner, the contents of the Parties’ presentations or the questions that the Committee could ask the Parties at the hearing.
79.
On 20 February 2019, the Committee confirmed receipt of the Parties’ correspondence of 15 and 19 February 2019 regarding the language(s) of the pre-hearing organizational meeting and noted that, failing a different agreement of the Parties, the pre-hearing conference call would be interpreted simultaneously into English and French pursuant to paragraphs 11(1) and 11(6) of Procedural Order No. 1.
80.
On 20 February 2019, the Parties submitted comments regarding the organization of the hearing.
81.
On 21 February 2019, the Applicants provided their comments on the Respondent’s letter of 12 February 2019.
82.
On 23 February 2019, the Applicants rectified material errors in two exhibits that they had submitted on 20 and 21 February 2019.
83.
On 25 February 2019, the Committee ruled on the Applicants’ motion to exclude a number of the Respondent’s exhibits from the record.
84.
On 26 February 2019, the President of the Committee held a pre-hearing organizational meeting with the Parties by telephone conference. The telephone conference was recorded and interpreted from and into French and English.
85.
On the same date, the Respondent requested a clarification on the Committee’s decision of 25 February 2019, which the Committee provided on 1 March 2019.
86.
On 1 March 2019, the Committee issued Procedural Order No. 3 concerning the organization of the hearing.14
87.
On 7 March 2019, the Applicants requested that the Committee grant them leave to submit the decision on annulment rendered in Suez, Sociedad General de Aguas de Barcelona S.A., and InterAguas Servicios Integrates del Agua S.A. v. The Argentine Republic (ICSID Case No. ARB/03/17) and dated 14 December 2018 (the "Suezv. Argentina Decision").
88.
On 8 March 2019, the Respondent agreed that the Suez v. Argentina Decision could be admitted into the record.
89.
On 8 March 2019, the Parties submitted their respective skeleton arguments for the hearing.15
90.
On 9 March 2019, the Applicants submitted a corrected version of their skeleton argument together with an electronic copy of the Suez v. Argentina Decision (identified as exhibit CL-414).16
91.
On the same date, the Respondent objected that the Applicants’ skeleton argument did not comply with the Committee’s directions in Procedural Order No. 3 and requested that the Committee order the Applicants to submit a revised skeleton argument or, in the alternative, strike from discussion at the hearing all of the Applicants’ new or reformulated claims or arguments. The Committee addressed the Respondent’s objection to the admissibility of the Applicants’ skeleton argument at the hearing and subsequently rejected it.
92.
On 10 March 2019, the Respondent confirmed that a corrected version of exhibit RA-0205(ENG) (transcripts of the Resubmission Hearing day of 14 April 2015) had been filed into the record and transmitted to the Committee an electronic copy of it. On the same date, the Applicants objected that the exhibit transmitted by the Respondent was not the corrected version of exhibit RA-0205(ENG).
93.
The hearing on annulment was held at the World Bank offices in Washington, D.C., from 12 to 14 March 2019 (the "Hearing on Annulment").17 The following persons were present at the Hearing on Annulment:

Members of the Committee :
Professor Dr. Rolf Knieper, President
Professor Dr. Nicolas Angelet
Professor Yuejiao Zhang

ICSID Secretariat :
Dr. Laura Bergamini, Secretary of the Committee

Representing the Applicants :
Dr. Juan E. Garcés, Agent, Garcés y Prada, Abogados
Mr. Hernan Garcés Duran, Co-agent, Garcés y Prada, Abogado
Professor Robert Lloyd Howse, New York University, School of Law
Ms. Alexandra Muñoz, Gide, Loyrette, Nouel
Mr. Toby Cadman, Guernica 37 International Justice Chambers
Mrs. Ruti Teitel, Ernst C. Stiefel Professor of Comparative Law, New York Law School Visiting Fellow, London School of Economics
Ms. Francisca Duran Ferraz de Andrade, President Allende Foundation Management

Representing the Respondent :
Ms. Mairée Uran Bidegain, Republic of Chile
Ms. Macarena Rodríguez, Republic of Chile
Mr. Paolo Di Rosa, Arnold & Porter
Ms. Gaela Gehring Flores, Arnold & Porter
Ms. Mallory Silberman, Arnold & Porter
Ms. Katelyn Home, Arnold & Porter
Ms. Caroline Kelly, Arnold & Porter
Mr. Michael Rodríguez, Arnold & Porter
Mr. Kelby Ballena, Arnold & Porter
Ms. Barbara Galizia, Arnold & Porter
Ms. Sally Pei, Arnold & Porter
Mr. Brian Williams, Arnold & Porter
Ms. Andrea Rodríguez Escobedo, Arnold & Porter
Ms. Kaila Millett, Arnold & Porter
Ms. Christina Poehlitz, Arnold & Porter

Court Reporters :
Ms. Michelle Kirkpatrick (English), B&B Reporters
Ms. Catherine Le Madic (French), French Real time
Ms. Ait Ahmed ép. Oubella (French, scopist), FrenchRealtime
Ms. Audrey Lemée (French, scopist), FrenchRealtime

Interpreters :
Ms. Sarah Rossi, English-French interpreter
Ms. Chantal Bret, English-French interpreter
Ms. Christine Victorin, English-French interpreter

94.
At the Hearing on Annulment, the Parties presented oral pleadings on the Annulment Application and the Additional Request. The Hearing was recorded. A verbatim transcript, in English and French, was made and circulated to the Parties.
95.
At the end of the Hearing on Annulment, having consulted with the Parties, the Committee decided several post-hearing matters, including the timing for the corrections to the transcript and the timing and format of the statements of costs. The Parties agreed not to submit post-hearing briefs.
96.
The Committee met to deliberate in Washington, D.C. on 15 and 16 March 2019 and continued its deliberations thereafter by various means of communication.
97.
On 22 March 2019, the Committee extended the time limit for the Parties to transmit their agreed or proposed corrections to the transcript.
98.
On 8 April 2019, the Parties submitted their proposed corrections to the English and French versions of the transcript and confirmed that they had reached an agreement on all of the corrections proposed by the Respondent. The Parties further indicated that they could not reach an agreement on a number of corrections proposed by the Applicants and, more generally, on the type of changes that could qualify as "corrections" under paragraph 20(3) of Procedural Order No. 1. In its letter of 8 April 2019, the Respondent specified the reasons why it could not agree on a number of revisions proposed by the Applicants.
99.
On 11 April 2019, the Applicants responded to the Respondent’s letter of 8 April 2019.
100.
On 12 April 2019, the Committee took note that the Parties had reached an agreement on the corrections to the English transcript proposed by the Respondent and confirmed that the court reporter would enter these corrections into the transcripts. The Committee further ruled on the scope of the "corrections" authorised in paragraph 20(3) of Procedural Order No. 1 and fixed the time limits for the Applicants to provide their revised proposed corrections and for the Parties to liaise and revert to the Committee with their agreed or disputed revised corrections.
101.
On 16 April 2019, the Applicants transmitted to the Respondent their proposed revised corrections to the transcript.
102.
On 17 and 22 April 2019, the Parties exchanged their comments on the Applicants’ proposed revised corrections and agreed that the transcript recording the original language used at the Hearing on Annulment should prevail over the transcript recording the interpretation.
103.
On 23 April 2019, the Applicants transmitted to the Secretary of the Committee their proposed revised corrections to the transcript (in English and French) of the hearing days of 12 and 14 March 2019.
104.
On 25 April 2019, the Respondent provided its comments on the Applicants’ revised proposed corrections and requested the Committee to decide on the disputed issues.
105.
On 29 April 2019, the Committee confirmed receipt of the Parties’ correspondence regarding the revised transcript and took note of their agreement that the version of the transcript recording the language originally used at the Hearing on Annulment governs. The Committee further took note that all of the Applicants’ proposed corrections included in the documents transmitted by the Applicants on 23 April 2019 not having a specific comment from Chile on the margin were to be considered as agreed between the Parties.
106.
On 6 May 2019, the Respondent requested that the Committee order that the Applicants’ counsel to abstain from posting comments about the case pursuant to paragraph 24 of Procedural Order No. 1. On the same date, the Applicants provided their comments on the Respondent’s request.
107.
On 10 May 2019, the Committee decided on the Respondent’s request of 6 May 2019.
108.
The Parties filed their respective submissions on costs on 15 May 2019 and their comments on the other Party’s submission of costs on 30 May 2019.
109.
On 11 June 2019, the Applicants requested that the Committee grant them leave to submit the decision on annulment rendered in Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic (ICSID Case No. ARB/04/16) and dated 8 May 2019 (the "Mobil v. Argentina Decision").
110.
On 12 June 2019, the Committee invited the Respondent to comment on the Applicants’ request of 11 June 2019.
111.
On 18 June 2019, the Respondent provided its comments on the Applicants’ request for leave to submit the Mobil v. Argentina Decision.
112.
On 24 June 2019, the Committee (i) invited the Applicants to provide the Respondent and the Committee with an electronic copy of the Mobil v. Argentina Decision; and (ii) invited the Parties to provide, by July 1, 2019, their comments on whether, and to what extent, the findings of the annulment committee in the case Mobil Exploration v. Argentina were relevant for the decision in the present case.
113.
On 25 June 2019, the Applicants provided an electronic copy of the Mobil v. Argentina Decision.
114.
On 1 July 2019, each Party provided its comments on the findings of the committee in the case Mobil Exploration v. Argentina.
115.
On 1 July 2019, the Respondent filed a request for clarification regarding the Stay Decision.
116.
On 4 July 2019, the Committee invited the Applicants to comment on the Respondent’s request for clarification regarding the Stay Decision.
117.
On 8 July 2019, the Applicants submitted their comments on the Respondent’s request of 1 July 2019.
118.
On 9 July 2019, the Committee decided on the Respondent’s request for clarification of the Stay Decision.
119.
On 9 July 2019, the Centre informed the Parties that Ms. Ella Rosenberg would replace Dr. Laura Bergamini as the Committee’s Secretary during Dr. Bergamini’s maternity leave.
120.
Following exchanges with the Parties, a corrected version of the decision on the Respondent’s request for clarification of the Stay Decision was sent to the Parties on 15 July 2019.
121.
On 27 August 2019, the Committee ruled upon the disputed revised corrections to the transcript.18
122.
In accordance with Arbitration Rules 53 and 38(1), the Annulment Proceeding was declared closed on 11 September 2019.
123.
On 4 December 2019, the Applicants requested leave to submit new evidence into the record. The Committee rejected the Applicants’ request on 6 December 2019.

III. THE RESUBMISSION AWARD

A. The Resubmission Proceeding

124.
In this section, the Committee briefly recalls the relevant procedural background of the Resubmission Proceeding (essentially as set forth in the Resubmission Award19 and described by the Parties in the Annulment Proceeding).
125.
On 18 June 2013, the Claimants lodged, pursuant to Article 52(6) of the ICSID Convention, a new request for arbitration which was registered by the Centre on 8 July 2013. In accordance with the terms of Article 52(6), the Resubmission Tribunal was constituted on 24 December 2013, composed of Sir Franklin Berman (President), appointed by the Chairman of the Administrative Council of ICSID in accordance with Article 38 of the ICSID Convention, Professor Philippe Sands, appointed by the Claimants, and Mr. Alexis Mourre, appointed by the Respondent. Following a challenge by the Respondent, Professor Sands informed the Centre by letter of 10 January 2014 that, while rejecting the grounds for the challenge, he took the view that the proper course was to allow the proceedings to continue without distraction, and accordingly relinquished his appointment as arbitrator.
126.
On 13 January 2014, following the resignation of Professor Sands, the ICSID Secretary-General notified the vacancy to the Parties and the proceeding was suspended pursuant to Arbitration Rule 10(2). On the same date, the Tribunal consented to the resignation of Professor Sands pursuant to ICSID Arbitration Rule 8(2), and on 31 January 2014, Mr. V. V. Veeder was appointed to fill the vacant place on the Tribunal in accordance with Arbitration Rule 11(1) and the Tribunal was reconstituted on that date. Mr. Paul-Jean Le Cannu was appointed Secretary of the Resubmission Tribunal on the same date, and was later replaced in that office on 13 May 2014 by Mr. Benjamin Garel. Following a proposal by the President, and with the agreement of the Parties, Dr. Gleider Hernández was appointed as Assistant to the President on 12 December 2014.
127.
On 11 March 2014, the Resubmission Tribunal held its first session with the Parties by telephone.
128.
On 18 May 2014, the Resubmission Tribunal issued Procedural Order No. 1 laying down the procedure for the written and oral phases of the proceeding.
129.
In accordance with the provisions of Procedural Order No. 1, the following written submissions were filed: the Claimants’ Memorial on 27 June 2014, the Respondent’s Counter-Memorial on 27 October 2014, the Claimants’ Reply on 9 January 2015, and the Respondent’s Rejoinder on 9 March 2015.
130.
On 10 November 2014, the Claimants submitted to the Resubmission Tribunal a request for the production of documents under Procedural Order No. 1, to which the Respondent replied on 1 December 2014. A further response by the Claimants was received on 3 December 2014, to which the Respondent responded (with the leave of the Resubmission Tribunal) on 8 December 2014. On 16 December 2014, the Resubmission Tribunal issued Procedural Order No. 2, containing its reasoned decision on the document production requests.
131.
On 9 February 2015, the Claimants sought the Resubmission Tribunal’s authorisation to produce: (a) two decisions rendered on 10 January and 3 February 2015 by the Santiago court, (b) the documents obtained through the search ordered by the Santiago court in these decisions, and (c) comments on such documents. On 13 February 2015, the Respondent expressed its consent to the Claimants’ requests, and indicated that it would respond to the Claimants’ comments in its Rejoinder. On 16 February 2015, the Tribunal granted leave to the Claimants to produce the documents in question, together with comments upon them, by 20 February 2015. On 20 February 2015, the Claimants submitted the documents in question and comments upon them.
132.
On 2 April 2015, the Resubmission Tribunal issued Procedural Order No. 3 setting out the arrangements for the oral hearing and communicating the hearing schedule.
133.
From 13 to 16 April 2015, the Resubmission Tribunal held an oral hearing in London. At the conclusion of the hearing, the President set out the procedure to be followed by the Parties for the submission of statements of costs for the purposes of Arbitration Rule 28(2). On 18 and 29 May 2015 respectively, the Claimants and the Respondent filed statements of costs and the Claimants filed a supplemental statement of costs.
134.
On 9 June 2015, the Resubmission Tribunal took note of certain agreed corrections to the hearing transcripts, and decided on the remaining corrections on which the Parties could not agree.
135.
On 18 September 2015, the Claimants sought the Resubmission Tribunal’s authorisation to introduce into the record a judgment rendered by the Supreme Court of Chile on 14 September 2015, and on 28 September 2015, the Respondent submitted its comments on this request. On 9 October 2015, the Resubmission Tribunal authorised the introduction of the judgment into the record.
136.
On 17 March 2016, the Resubmission Tribunal declared the proceeding closed under Arbitration Rule 38(1).
137.
On 18 July 2016, the Resubmission Tribunal informed the Parties that, in accordance with ICSID Arbitration Rule 46, it had extended for a further 60 days the period to draw up and sign the Award.
138.
On 13 September 2016, the Resubmission Tribunal rendered the Resubmission Award.
139.
On 18 October 2016, the Applicants wrote to the Secretary-General stating that they had discovered new evidence of a conflict of interest on the part of President Berman and Mr. Veeder. The Centre replied to the Applicants that the Resubmission Tribunal had ceased to exist.20
140.
By letter dated 27 October 2016, the Claimants submitted a Request for Rectification of the Resubmission Award pursuant to Article 49 of the ICSID Convention (the "Request for Rectification"). In that same letter, the Claimants made certain requests for inquiry and disclosure by Sir Franklin Berman and Mr. Veeder, and further requested that the rectification proceeding be suspended until the tribunal called upon to interpret the First Award of 8 May 2008 in accordance with the Claimants’ request of 7 October 2016 had issued its decision on interpretation.
141.
By email dated 4 November 2016, the Respondent asked the Secretary-General of ICSID for four weeks to file its response regarding the proper procedure to be followed in the circumstances presented by the Claimants’ submissions.
142.
By email dated 5 November 2016, the Claimants opposed the Respondent’s request for a four-week time period.
143.
On 8 November 2016, the Acting Secretary-General of ICSID registered the Request for Rectification. By letter of the same day, the Acting Secretary-General of ICSID invited the Parties to submit to the Tribunal their proposals regarding the procedure, conduct and timetable of the rectification proceedings (the "Rectification Proceedings").
144.
By letter dated 10 November 2016, the Claimants submitted a request for suspension of the Rectification Proceedings, pending disclosure of certain information by Sir Franklin Berman and Mr. Veeder.
145.
By letter dated 16 November 2016, the Resubmission Tribunal invited the Respondent to indicate, by 30 November 2016, whether it consented to the requested rectifications.
146.
By letter dated 17 November 2016, the Respondent asked the Resubmission Tribunal to order the Claimants to submit a Spanish version of the Request for Rectification, and requested a period of at least three weeks following receipt of the Spanish version of the Request for Rectification to consider and submit to the Resubmission Tribunal its position on the proposed rectifications.
147.
By letter dated 18 November 2016, the Claimants reiterated their requests for disclosure dated 27 October 2016 and 10 November 2016 to the Resubmission Tribunal.
148.
By letter dated 21 November 2016, the Resubmission Tribunal took note of the references in the Request for Rectification to further declarations touching the independence and impartiality of Sir Franklin Berman and Mr. Veeder, and communicated to the Parties the fact that the two arbitrators had already responded to the Secretary-General of ICSID on these questions, and had nothing further to add.
149.
By a second letter dated 21 November 2016, the Resubmission Tribunal rejected the request filed by the Claimants for the suspension of the Rectification Proceedings. In the same letter, the Resubmission Tribunal requested the Claimants to provide a Spanish translation of the Request by 2 December 2016, and set the procedural timetable for the Rectification Proceedings.
150.
By letter of 22 November 2016, the Claimants proposed the disqualification of Sir Franklin Berman and Mr. Veeder (the "Challenged Arbitrators") under Article 57 of the ICSID Convention and ICSID Arbitration Rule 9 (the "First Disqualification Proposal").
151.
By letter dated 29 November 2016, the Centre informed the Parties that, pursuant to ICSID Arbitration Rule 9(6), the Rectification Proceedings were suspended until the First Disqualification Proposal had been decided.
152.
On 21 February 2017, the Centre transmitted to the Parties, the Decision of the Chairman of the ICSID Administrative Council to dismiss the First Disqualification Proposal. By letter of the same date, the Resubmission Tribunal notified the Parties that, in accordance with ICSID Arbitration Rule 9(6), the Rectification Proceedings were resumed on that date.
153.
On 23 February and 4 March 2017, the Claimants submitted further proposals for the disqualification of Mr. Veeder and subsequently for the disqualification of Sir Franklin Berman under Article 57 of the ICSID Convention and ICSID Arbitration Rule 9. By letter of 23 February 2017, the Resubmission Tribunal notified the Parties that, pursuant to ICSID Arbitration Rule 9(6), the Rectification Proceedings were once again suspended.
154.
By letter dated 6 March 2017, the Centre informed the Parties that it was treating the Claimants’ further proposals for disqualification as a proposal to disqualify a majority of the Resubmission Tribunal, to be decided simultaneously by the Chairman of the Administrative Council of ICSID in accordance with Article 58 of the ICSID Convention (the "Second Disqualification Proposal").
155.
On 13 April 2017, the Centre informed the Parties of the Decision of the Chairman of the Administrative Council to dismiss the Second Disqualification Proposal. By letter of the same day, the Resubmission Tribunal notified the Parties that the Rectification Proceedings had resumed with immediate effect.
156.
By letter dated 18 April 2017, the Tribunal notified the Parties that the procedural arrangements as set out in the letter dated 21 November 2016 would stand, subject to a prolongation of the procedural timetable by twenty weeks to take account of the suspensions of the Rectification Proceedings as set out above.
157.
By letter dated 21 April 2017, the Claimants communicated a request to the Tribunal for the discontinuance of the Rectification Proceedings under ICSID Arbitration Rule 44.
158.
In an Order dated 24 April 2017, the Resubmission Tribunal set 1 May 2017 as the date for the Respondent to state its position under ICSID Arbitration Rule 44 with respect to the Claimants’ request for discontinuance of the Rectification Proceedings.
159.
On 6 October 2017, the Resubmission Tribunal rendered the Rectification Decision.

B. The Parties’ positions before the Resubmission Tribunal and its Decisions

160.
The Claimants’ position before the Resubmission Tribunal is set out in detail in paragraphs 42 to 122 of the Award of 13 September 2016, and in paragraphs 37, 38, 40, 42 and 44 of the Rectification Decision of 6 October 2017.
161.
In essence, the Claimants submitted that Ms. Coral Pey Grebe was the proper party of the Resubmission Proceeding (being the assignee of all of Mr. Pey Casado’s rights) and claimed that the Resubmission Tribunal had jurisdiction over her under Article 25 of the ICSID Convention.21 On the merits, the Claimants argued that the purpose of the Resubmission Proceeding was only to establish the amount of damages due to them because of the denial of justice and discrimination they suffered (which had been determined by the First Tribunal)22 and elaborated on the calculation and quantification of those damages.23 As relief, the Claimants an award of EUR 11,156,739.44 and USD 517,533 as well as legal costs.24
162.
The Respondent’s position before the Resubmission Tribunal is described in paragraphs 123 to 270 of the Resubmission Award, and paragraphs 39, 41, 43 and 45 of the Rectification Decision of 6 October 2017.
163.
The Respondent essentially argued that Ms. Coral Pey Grebe was not a proper party to the Resubmission Proceeding (because Article 52 of the ICSID Convention provides that only the parties of the original arbitration and annulment may resubmit the dispute to the new tribunal) and that, in any case, the Resubmission Tribunal lacked jurisdiction ratione materiae and personae over her.25 On the merits, the Respondent contested the calculations and quantifications of damages presented by the Claimants and their expert, argued that the Claimants had failed to satisfy their burden of proving damages, and objected to the admissibility of a number of the Claimants’ claims.26 Accordingly, the Respondent sought the dismissal of the Claimants’ claims and an award for costs and fees.27
164.
In the Resubmission Proceeding, the Parties lengthily discussed the scope of the Resubmission Tribunal’s mandate in light of the possible res judicata effect of unannulled parts of the First Award.
165.
In the Resubmission Award, the Resubmission Tribunal decided as follows:

(1) That Ms Coral Pey Grebe cannot be regarded as a claimant in her own right in these resubmission proceedings;

(2) That, as has already been indicated by the First Tribunal, its formal recognition of the Claimants’ rights and its finding that they were the victims of a denial of justice constitutes in itself a form of satisfaction under international law for the Respondent’s breach of Article 4 of the BIT;

(3) That the Claimants, bearing the relevant burden of proof, have failed to prove any further quantifiable injury to themselves caused by the breach of Article 4 as found by the First Tribunal in its Award;

(4) That the Tribunal cannot therefore make any award to the Claimants of financial compensation on this account;

(5) That the Claimants’ subsidiary claim on the basis of unjust enrichment is without legal foundation;

(6) That there are no grounds in the circumstances of the case for the award of moral damages either to Mr Pey Casado or to the Foundation;

(7) That the arbitration costs of these resubmission proceedings are to be shared in the proportion of three quarters to be borne by the Claimants and one quarter by the Respondent, with the result that the Claimants shall reimburse to the Respondent the sum of US$159,509.43;

(8) That all other claims are dismissed.28

166.
In the Rectification Decision of 6 October 2017, the Resubmission Tribunal decided that:

(a) Paragraphs 61, 66, and 198, and paragraph 2 of the dispositif, of the Resubmission Award are rectified as set out in paragraphs 52, 53, 54, and 55 above.

(b) The costs incurred by the Centre in respect of these Rectification Proceedings, including the costs resulting from the associated challenges to Sir Franklin Berman and Mr Veeder, shall be borne by the Claimants and the Claimants shall therefore reimburse to the Respondent the sum of US$ 22,963.36, in addition to the amount specified in paragraph 255 of the Resubmission Award. The Tribunal makes no further order as to costs.29

IV. THE PARTIES’ REQUESTS FOR RELIEF IN THE ANNULMENT PROCEEDING

A. The Applicants’ request for relief

167.
In their Memorial and Reply on Annulment, the Applicants request that the Committee:

1. Accept this [brief], and its documents attached, seeking the annulment

i. of the whole resubmission Award notified on 13 September 2016, on the grounds of Article 52(1) of the Convention, including points (a), (b), (d) and (e) thereof, [and]

ii. the annulment of §§58, 61 and 62(b) of the Decision of 6 October 2017, on the grounds of points (b), (d) et (e) of Article 52(1) of the Convention;

2. Order the Republic of Chile in due course to bear the costs of this annulment proceeding and of incidental issues - such as the one that arose on 12, 15 et 16 February 2018 - along with the fees and expenses of the members of the ad hoc Committee, the charges for use of ICSID facilities, the translation expenses and the professional fees and expenses of [the Applicants], lawyers, experts and/or any other persons called upon to appear before the ad hoc Committee, and pay the relevant amounts for any other infringements established as the ad hoc Committee may deem fair and equitable, with compound interest.

3. Adopt any other measures that the members of the Committee consider fair and equitable in the circumstances of this case.30

168.
In the Additional Request, the Applicants request:

[I]n order to preserve the integrity and the fairness of the procedure, and given the nature and the seriousness of the behaviour of the Respondent State on 12,15 and 16 February 2018, its blatant bad faith, the non-rectification of its behaviour by its representatives, but the complete contrary, its deliberate amplification, that the ad hoc Committee exercises its powers and that, in compliance with Rule 26 of the IBA Guidelines on party representation:

(a) That it draws appropriate conclusions in its reasonable appreciation of the judicial evidence produced, as to the evaluation of the fact that, against this evidence, on 12, 15 and 16 February 2018 Chile presented the reference made by the Claimants in their submissions as deception, and to this end, explicitly pejorative, the injunction of 24 July 2017 of the 28th Civil Court of Santiago as being vacated since October 2017;

(b) That it draws appropriate negative inferences from the attempts by Chile's representatives, with consumed effrontery, to make the ad hoc Committee believe, with no foundation and against all of the evidence, that the Claimants’ representatives lacked professional ethics by bluntly questioning the inaccuracy of the communication of 12 February 2018 submitted by the Defendant, and that such supposed failures are abundant and proven, since the start of the arbitration, without any evidence;

(c) That it sanctions the behaviour of the Republic of Chile for its communications of 12 and 15 February and at the hearing the following day by introducing and continuously supporting inaccurate facts, infringing upon the honour and the professional integrity of the Claimants, to the point of getting the ad hoc Committee to warn that it was ready, after deliberation, to also take measures against them by virtue of Article 44 of the Convention, and to encourage a Claimant’s counsel to rectify, at the request of Chile, an entirely founded declaration produced in a circle of public debate;

(d) Warning to which the Claimants affirm, with a clear conscience, to have never exposed itself today or in the past, exclusive of the double deception in favour of which the Defendant State designated its own qualities before the ad hoc Committee on 12, 15 and 16 February, which characterise more than twenty years of the present arbitration [...];

(e) That it takes into account these facts in the allocation of costs of the arbitration, by indicating if needed how and to what extent they have led the Committee to a different allocation of these costs;

(f) That it takes all other appropriate measures to preserve the fairness and integrity of the procedure.31

B. The Respondent’s request for relief

169.
In the Counter-Memorial and the Rejoinder on Annulment, the Respondent requests that the Committee:

a. [R]eject Claimants’ annulment request, in its entirety;

b. [O]rder Claimants to cover the costs of the Annulment Proceeding in their entirety; and

c. [O]rder Claimants to reimburse Chile for the full amount of its legal fees and expenses (with interest thereon, at a rate of six-month LIBOR plus 2% per annum, starting from the date of the Committee’s decision and until the date of payment).32

V. RULING CONCERNING THE ADDITIONAL REQUEST

170.
Besides their requests for annulment of the Resubmission Award, the Applicants made an application on 27 April 2018, reiterated in their Réplique of 9 November 2018,33 asking the ad hoc Committee to preserve the integrity and the equity of the proceeding by sanctioning the Respondent for alleged bad faith and fraudulent behaviour in the conduct of the case. The Applicants allege that they discovered a "modus operandi." by which the Respondent presents inexact and untrue facts "en vue de frustrer l’arbitrage" in general, and in particular to induce the Committee, first, to believe that the Applicants acted against rules of professional ethics, and, second, to draw the wrong conclusions with respect to the outcome of the case.34
171.
The Applicants allege that the Respondent employed this modus operandi systematically but refer explicitly to its allegedly false assertion that the courts of Chile "vacated" the Applicants’ request for document production, where in reality, the request was still before the Chilean courts. This alleged false information was to mislead the Committee before its own decision on the Applicants’ document production request relating to the business relations between Chile and the Essex Court Chambers.35
172.
The Applicants request that the Committee formally recognise that the Respondent’s submission was fraudulent, that it draw negative inferences from this, that it state the Applicants’ conduct was professionally correct, that it take the incident into consideration when making its decision on costs, and that it take all appropriate measures to guarantee the integrity and equity of the proceeding.36
173.
The Respondent refutes the accusations and insists that its presentation was correct and that "[i]t is [the Applicants] themselves who misled the Committee, by asserting - falsely - that Chile was in violation of a court-ordered obligation to produce documents to [the Applicants]."37
174.
The Respondent further submits that this is not the only incident where the Applicants "accuse us of lying when they have been misrepresenting this issue for ten years." The Respondent refers to a judgment of a Chilean court,38 which - according to the Applicants - has stated ex officio the nullity of the Decree No. 165 of 10 February 1975 (the "Decree No. 165"),39 where in reality the court has given effect to the Decree.40
175.
The Respondent asserts that "we never said that the proceeding was vacated. We said the particular court order was vacated."41
176.
The Respondent further asserts that at the time of the evidentiary hearing the case was still pending before the Chilean courts and that therefore it is still under no obligation in Chile to produce documents.42
177.
The Respondent requests the Committee to direct the Applicants to "cease and desist from their accusations" and "to take this whole deplorable episode into account at the time of awarding costs and legal fees."43
178.
The Committee has carefully studied the Parties’ submissions regarding the Chilean proceedings and in particular the Respondent’s Second Submission on Preliminary Issues, dated 12 February 2018, which is at the centre of the dispute at hand. The submission states that while the Claimants appear to argue that the Committee’s intervention is "necessary to give effect to a Chilean court order," "the court order in question was vacated on procedural grounds [...] and the Chilean courts currently are reviewing Claimants’ assertion."44 The text makes it clear, and the context further confirms, that the Respondent only stated that the specific order had been vacated and not the whole proceedings.
179.
The Committee does not find this statement to be misleading. In any event, it has not been misled and understood that the "vacation" of one court order has not terminated the proceeding before the Chilean courts with respect to document production.
180.
As to the other controversial example quoted by both Parties, i.e. the judgment of the 1st Civil Tribunal of Santiago, the Committee has found that the judge discussed the issue of absolute nullity of the Decree No. 165 and a possible imprescriptibility of claims for confiscation in the conditional. The judge came to the conclusion, after detailed reasoning, that Mr. Pey Casado’s claim for restitution of the Goss printing machine was time barred after 20 years. She confirmed thereby that Decree No. 165 had not been without effect under Chilean law.45
181.
The careful analysis of the judgment leads to the conclusion that the Applicants’ reference to it is not correct. At the same time, the Committee was not misled because the Applicants had exhibited the judgment and allowed for the proper appreciation.
182.
Both Parties have presented their cases with vigour, passion and sometimes unevidenced speculation on the state of mind and motivation of the other Party. The Committee has no reason to consider that the Parties did not believe in the truth of these speculations. Be that as it may, the Committee does not participate in the speculations and draws no inferences from them. It can state with certainty that they have not influenced its decision, nor have they led it to assume that either Party acted unprofessionally or in bad faith. Further, both Parties have contributed to a normal and constructive procedure.
183.
For these reasons, the Committee finds that the integrity of the proceeding has been safeguarded and rejects the Parties’ requests for reliefs in connection with the Applicants’ Additional Request.

VI. LEGAL STANDARDS

184.
The First Committee devoted a comprehensive chapter on the legal standards of the three grounds for annulment that had been asserted by the Respondent, i.e. a manifest excess of powers, a serious departure from a fundamental rule of procedure, and a failure to state the reasons on which the award was based.46
185.
Both Parties made the First Committee’s determination their own and refer to it repeatedly and affirmatively.47 They have refrained from presenting repetitive textbook explanations and off-the-shelf documentation and have condensed their presentations to a number of basic, widely accepted and uncontroversial principles in order to establish the legal framework of this Annulment Proceeding, even with regard to the fourth ground of annulment, which was not asserted during the First Annulment Proceeding, i.e. the improper constitution of the tribunal.
186.
The Committee sympathises with the Parties’ approach, all the more so because it subscribes to the First Committee’s analysis, which the Respondent summarises as follows:

With respect to "[t]he ground for annulment for manifest excess of powers," the First Committee stated that "this ground is meant to ensure, inter alia, that tribunals do not exceed their jurisdiction or fail to apply the law agreed upon by the parties." To justify annulment, "[a] tribunal (1) must do something in excess of its powers and (2) that excess must be ‘manifest.’ It is a dual requirement." The phrase "excess of powers" would include an "inappropriate [] exercis[e] of jurisdiction (or failure to exercise jurisdiction); and [a] fail[ure] to apply the proper law." Nevertheless, "there is an important distinction between a failure to apply the proper law[,] which is a ground for annulment, and an incorrect or erroneous application of that law, which is not a ground for annulment." For its part, the term "manifest" means "sufficiently clear and serious." If the tribunal’s conclusions ‘"seem tenable and not arbitrary, they do not constitute [a] manifest excess of powers’"

Regarding the second ground for annulment — "that there has been a serious departure from [a] fundamental rule[] of procedure" - the First Committee "agree[d] with Chile that this ground involves a three-part test: (i) the procedural rule must be fundamental; (ii) the Tribunal must have departed from it; and (iii) the departure must have been serious." The first part of the test requires identification of "procedural rules that are essential to the integrity of the arbitral process and must be observed by all ICSID tribunals. The parties agree that such rules include the right to be heard, the fair and equitable treatment of the parties, proper allocation of the burden of proof and absence of bias." The second part (i.e., the "departure" prong) "requires that the Committee examine the full record, including the Transcripts and the Award [,] to determine whether or not the Tribunal violated the rule in question." The third part of the test — the "seriousness" prong — requires "that the applicant must demonstrate ‘the impact that the issue may have had on the award.'" The committee must "enquire whether, if the rule had been observed, there is a distinct possibility (a ‘chance’) that it may have made a difference on a critical issue."

The First Committee also stated that, in addition to the above three prongs, there is a fourth, waiver-related issue to consider: "Pursuant to ICSID Arbitration Rules 27 and 53, a party may lose its right to object on the ground of a serious departure from a fundamental rule of procedure if it has failed to raise its objection to the tribunal’s procedure upon becoming aware of it, or ‘promptly’ as mentioned in Rule 27."

With respect to the issue of "failure to state reasons," the First Committee endorsed the statement of the Vivendi I committee to the effect that "‘Article 52(1)(e) [of the Convention] concerns a failure to state any reasons with respect to all or part of an award, not the failure to state correct or convincing reasons.’" So long as "‘the reasons given by a tribunal can be followed and relate to the issues that were before the tribunal, their correctness is beside the point in terms of Article 52(1)(e).’" Further, "‘reasons may be stated succinctly or at length, and different legal traditions differ in their modes of expressing reasons. Tribunals must be allowed a degree of discretion as to the way in which they express their reasoning.’" At bottom, the "[First] Committee believe[d] that as long as there is no express rationale for the conclusions with respect to a pivotal or outcome-determinative point, an annulment must follow, whether the lack of rationale is due to a complete absence of reasons or the result of frivolous or contradictory explanations."48

The Respondent’s summary also represents its position.

187.
The Parties not only agree with the analysis of the First Committee, they also agree that annulment proceedings are not to be equated to an appeal, which is obvious given the clear wording of Article 53(1) of the ICSID Convention.49
188.
Beyond these fundamental principles, the Parties have discussed the following nuances.
189.
With respect to the (im-)proper constitution of the tribunal (Article 52(1)(a) of the ICSID Convention), the Applicants50 subscribe to the ICSID Secretariat's Background Paper on Annulment, explaining that the ground:

[I]s intended to cover situations such as a departure from the parties’ agreement on the method of constituting the Tribunal or an arbitrator’s failure to meet the nationality or other requirements for becoming a member of the Tribunal51

as well as to Professor Schreuer who states that:

[Q]uestions concerning the tribunal's proper constitution might arise from dissatisfaction in the manner in which challenges to arbitrators and alleged conflicts of interest have been handled. [...] Appointment of an arbitrator who manifestly does not possess these qualities [as required by Art. 14(1) Convention] may be put forward as a ground for annulment.52

190.
The Respondent does not disagree with these quotes but warns that Article 52(1)(a) is concerned with the constitution and not the composition of the tribunal.53
191.
The Committee shares the quoted opinions. The distinction between constitution and composition has to be determined under the concrete circumstances of the case.
192.
With respect to a manifest excess of powers (Article 52(1)(b) of the ICSID Convention), the Applicants54 expand on the First Committee’s analysis by quoting decisions of previous ad hoc committees such as Venezuela Holdings v. Venezuela, which found that Article 52(1)(b) "covers the case where a tribunal exercises a judicial power which on a proper analysis had not been conferred on it (or vice versa declines to exercise a jurisdiction which it did possess)."55 The Applicants further assert that for an excess of powers to be manifest, it must be both "obvious" and "serious."56
193.
The Applicants assert that a tribunal commits a manifest excess of powers "en s’élevant contre l’autorité de la chose jugée."57 ICSID Arbitration Rule 55(3) provides unequivocally that the "new Tribunal shall not reconsider any portion of the award not so annulled."
194.
They rely on Amco v. Indonesia (II), where the committee found that:

"If the original award had only been annulled in part, the new Tribunal shall not reconsider any portion of the award not so annulled." If a new Tribunal reconsiders an issue not annulled, it exceeds its power.58

195.
The Applicants also refer to the Resubmission Tribunal in the present case, which found that "it would be a manifest excess of its own jurisdiction if the Tribunal purported to" investigate afresh issues that "had been finally determined with the quality of res judicata (or, in the French phrase used by the Committee, ‘autorité de la chose jugée j."59
196.
The Applicants agree that a misapplication, a misinterpretation or an erroneous application of the law normally do not amount to a non-application of the proper law. However, they assert that in cases of egregious error - as observed in Lahoud v. Congo - "une telle mauvaise application ‘est d’une telle nature ou ampleur qu’elle équivaut objectivement [...] à une non-application’."60
197.
The Respondent observes that contrary to a failure to apply the proper law, an incorrect or erroneous application of that law is not a ground for annulment.61 Further, the manifest nature of the excess of power does not refer to the seriousness of the excess or to the fundamental nature of the rule that has been violated, but to the ease with which it is perceived. For an excess of power to be "manifest," it must be perceived by the Committee without a complex analysis. Accordingly, the Applicants’ alleged "contortions" ipso facto signal the absence of a "manifest" excess of power.62 When a tribunal’s conclusions seem tenable and not arbitrary, they do not constitute an excess of powers.63
198.
The Committee agrees that an "inapplication la plus absolue" of the law which is to be applied in the circumstances of the case fulfils the requirement of an excess of power.64 The Committee also agrees that an excess of powers that, in the words of Soufraki v. UAE,65 is "textually obvious and substantively serious" is "manifest,"66 whereas conversely, the alleged excess which is difficult to perceive even with some degree of analysis, or which has no substantively serious effect, does not qualify as "manifest."
199.
With respect to a serious departure from a fundamental rule of procedure (Article 52(1)(d) of the ICSID Convention), the Applicants correctly expand on the First Committee’s findings by specifying that "serious" and "fundamental" are cumulative requirements, so that "l’inobservation grave d’une simple règle de procédure ne pourra conduire à l’annulation de la sentence, de même que la simple inobservation d’une règle fondamentale de procédure."67
200.
They submit that fundamental rules of due process must be respected and in particular "l’exigence d’indépendance et d’impartialité d’un tribunal, le principe d’égalité de traitement des parties, le droit à être entendu, ou encore le traitement des éléments de preuve ou de la charge de la preuve."68
201.
In view of their central claims, the Applicants specify69 that - as expressed by the Klöckner v. Cameroon ad hoc committee - "[i]mpartiality of an arbitrator is a fundamental and essential requirement [...] any sign of partiality must be considered [...] ‘a serious departure from a fundamental rule of procedure,’"70 as much so as conduct of the tribunal by which it might pretend to hear the parties’ arguments and evidence but does not give them serious consideration.71
202.
Finally, the Applicants align themselves with jurisprudence as summarised in CDC v. Seychelles, according to which a departure from a fundamental rule of procedure is serious:

[W]here it is "substantial and [is] such as to deprive the party of the benefit or protection which the rule was intended to provide." In other words, "the violation of such a rule must have caused the Tribunal to reach a result substantially different from what it would have awarded had the rule been observed."72

203.
The Committee accepts the Applicants’ arguments, which are not contested by the Respondent, as an expression of principle, being conscious of the fact that their application to the facts may require a certain re-calibration.
204.
With respect to a failure to state the reasons on which the award is based (Article 52(1)(e) of the ICSID Convention), the Applicants follow the First Committee’s position after an analysis of partly controversial annulment decisions as to "le degré de contrôle de la motivation de la sentence."73 They present, as matters of principle,74 and the Committee agrees, that:

- the committee "has to verify the existence of reasons as well as their sufficiency - that they are adequate and sufficient reasonably to bring about the result reached by the Tribunal - but it cannot look into their correctness;"75

- reasons must not be frivolous or truly contradictory, whereby the contradiction must be serious enough "to vitiate the Tribunal’s reasoning [...] as a whole."76

205.
The Committee is mindful of its limited role to protect the propriety and integrity of the proceeding and not to sit as a court of appeal. It is not authorised to qualify the Tribunal’s reasoning as deficient, superficial or wrong, and inconsistencies between different parts of the Resubmission Award do not amount to a lack of reasons, unless the contradiction is of a kind that two arguments neutralise each other or "cancel each other out."77
206.
Finally, the Applicants contend that, given the seriousness of the Resubmission Tribunal’s repeated violations of ICSID system’s integrity and propriety, the Committee has no choice but to annul the Resubmission Award.
207.
The Respondent disagrees and asserts78 - in quoting CDC v. Seychelles - that "a Committee has discretion not to annul an Award even where a ground for annulment under Article 52(1) is found to exist."79 This conclusion, the Respondent states, follows from Article 52(3) of the ICSID Convention which provides that ad hoc committees "have the authority" to annul awards, but not an obligation to do so.
208.
The Respondent is conscious of certain limits to the exercise of the discretion not to annul an award, as expressed in CEAC v. Montenegro, where the committee held that the discretion:

[I]s by no means unlimited and must take account of all relevant circumstances, including the gravity of the circumstances which constitute the ground for annulment and whether they had - or could have had - a material effect upon the outcome of the case, as well as the importance of the finality of the award and the overall question of fairness to both Parties.80

209.
However, the Respondent insists that the circumstances of the present case warrant upholding the Resubmission Award. It underlines that the Applicants brought the case in bad faith, never met their burden of proof for damages, rejected Chile’s efforts to compensate for the injuries suffered during the military dictatorship, and have manoeuvred to keep the dispute alive for more than 20 years.81
210.
The Committee agrees with the position of the CEAC committee, which is itself in line with well-established case law,82 that committees should not automatically declare an award annulled if one of the grounds for annulment is present but that they should exercise their authority in weighing, in particular, the gravity of the circumstances which constitute the ground for annulment and whether they had - or could have had - a material effect upon the outcome of the case. As stated by Professor Schreuer, annulment should be "contingent not only upon the presence of one of the defects listed in Article 52(1) but also upon its material impact on one or both parties."83 This implies that the sheer duration of the proceeding cannot be taken as a criterion, in particular when both parties share the responsibility for the delays, nor the relative success of one or the other party in the previous stages.
211.
The Committee will proceed in keeping these considerations in mind.

VII. GROUNDS FOR ANNULMENT

A. Initial considerations

(1) The Background of the Dispute and Reasons of the Resubmission Tribunal

212.
After the break-down of the military dictatorship and the re-establishment of democracy in Chile, Mr. Pey Casado, a Spanish citizen, returned to Chile, his second home country, from which he had been expelled by force at the beginning of the dictatorship. He sought redress for the injury and injustice inflicted upon him by turning to the Chilean government, Chilean courts, and international arbitration. These multiples démarches, as understandable and legitimate as they may be, are evidently not synchronised. This has necessarily contributed to the complexity of the case.
213.
In this section, the Committee will set out the background and basic issues of the disputes as it sees it. They relate to the specificity and complexity of the case, which crosscut the structure of the requests for annulment and the defences against them, and which have been present throughout the proceeding. Where appropriate, it will first make rulings on the requests for annulment.
214.
During their closing statement at the Hearing on Annulment, on 14 March 2019, the Applicants explained the reasons for their perseverance in the dispute by insisting that it is the legal and moral duty of any person injured to fight for their subjective rights and to defend them and thereby objective justice against all odds, and that, by doing so, they "defend the collective interests of the international law, of law in general."84
215.
They contend that the military coup d'état l ed by Augusto Pinochet in 1973 and the ensuing dictatorship, which ended in 1989 with the restoration of democracy, have unlawfully deprived them of their investments and use of property and caused hardship and injury to them. Personal belongings as well as business assets and shares in companies were first physically seized in 1973 manu militari and then by a sham administrative act, the Decree No. 165 of 10 February 1975. These unlawful and anti-constitutional acts were not capable of terminating Mr. Pey’s legal title to ownership.85
216.
Throughout the different stages of the proceedings, Decree No. 165 has been a central piece, "un enjeu principal"86 of the Applicants’ arguments. They assert that it had a factual, but never a legal existence since it contradicted fundamental principles of the Chilean Constitutions of all times, that, therefore, it was null and void from the beginning and could not have any legal effect, and that it has not extinguished their ownership rights. These assertions were made before the First Tribunal,87 before the First Committee,88 before the Resubmission Tribunal,89 and before the present Committee.90
217.
The Applicants insist that as injustice has been done and its effects are still present, they have a moral and legal duty to themselves and to society to fight until justice is rendered and the injury is compensated.91
218.
This deep conviction and indignation have led them to try every potential venue of remedies to reach the same goal: before national courts in Chile and before international arbitration tribunals, relying on both national and international laws.
219.
As an interim result, Mr. Pey Casado has been compensated for the loss of his personal belongings.92 Chilean courts rejected the claim for restitution of the Goss printing machine for being time-barred when it was brought in 1995, i.e. 20 years after Decree No. 165.93 The 1st instance court did not deny the existence and effect of Decree No. 165. Rather, Mr. Pey argued before the court that the decree was "entaché de nullité de droit public, imprescriptible [et] incurable, qui provoque son inexistence juridique."94 This was disputed by the State which asserted that the decree had been enacted in accordance with constitutional provisions applicable at the time, with the consequence that Mr. Pey’s request was time-barred.95 The Court dismissed Mr. Pey’s argument, reasoning that his claim was time-barred by calculating the relevant periods of time as from the enactment of Decree No. 165.96 As to compensation for the confiscated shares in the Chilean companies and especially El Clarín, the Claimants initiated the present proceeding and informed the Chilean authorities by letter of 24 June 199997 that they had opted for this alternative as a "fork in the road" decision and would not pursue their claim under the Chilean compensation Law No. 19,568, dated 23 July 1998.98
220.
The Resubmission Tribunal has rejected any pecuniary compensation although it recalls "a subsisting obligation on the Respondent [...] for the redress of acknowledged past injustices."99
221.
This statement echoes similar expectations formulated by the First Tribunal:

Quant à l'invalidité des confiscations et au devoir d’indemnisation, il y a lieu de rappeler aussi des déclarations parfaitement claires de la défenderesse dans la présente procédure.

Après le rétablissement au Chili d’institutions démocratiques et civiles, les nouvelles autorités ont proclamé publiquement leur intention de rétablir la légalité et de réparer les dommages causés par le régime militaire.

[...]

Le Tribunal arbitral ne peut que prendre note avec satisfaction de telles déclarations, qui font honneur au Gouvernement chilien. Malheureusement, cette politique ne s’est pas été traduite dans les faits.100

222.
According to the First Award, the Respondent has declared that:

[L]es gouvernements démocratiques qui remplacèrent en 1990, au moyen d’élection libres, le gouvernement de Pinochet, se sont primordialement préoccupés de réparer les dommages causés par le régime instauré au Chili par le coup d’état du 11 septembre 1973. En effet, leGouvernement a pris les mesures pour réparer les dommages causés aux victimes dans tous les secteurs.101

223.
These declarations of the most diverse actors all recognise that injustice has been done and injuries were inflicted. At the same time, the Resubmission Tribunal dismissed the Applicants’ request for compensation. The Applicants deduced from these seemingly contradictory findings that the Resubmission Tribunal was driven by a "systematic bias"102 in the conduct of the proceeding, in its reasoning and finally, in its decision to the detriment of the Applicants.
224.
They assert that this was only possible by systematically disregarding the binding force, the res iudicata effect of the non-annulled parts of the First Award,103 and by speculating, allowing the Tribunal’s position to be "dictée par une écoute du Tribunal" accommodating Chile’s wishes.104 The reproach is recurrent and repeated in paragraphs 55-63, 105-106 of the Reply on Annulment, in paragraphs 277, 305, 321, 335-349, 359, 397 ss., 431 ss., 468 s., 507-549, 550 ss., 558 ss., 598, 614, and 647 of the Memorial on Annulment, and in paragraphs 7, 8, 84, 174, 176-185, 200, 207 ss., 221-226, 238, 239, 250, 255 of the Annulment Application. On pages 156-181 of the Memorial on Annulment, the Applicants quote paragraphs 176, 178, 187, 195, 198, 199, 203, 211, 215, 216, 223, 232, 236, 238, 243, 244, and 286 of the Resubmission Award as examples of systematic bias amounting to a serious departure from a fundamental rule of procedure, and manifest excess of power.
225.
The Applicants summarise their complaint as follows:

En outre, la partialité du Tribunal de Resoumission est manifeste en ce qu’il laisse entendre que le Comité ad hoc chargé de l’annulation n’est pas allé assez loin dans son acceptation de la demande d’annulation formulée par le Chili à l’égard de la Sentence initiale. En attaquant des aspects essentiels de la Sentence initiale où le Comité ad hoc n’a pas été d’accord avec le Chili sur ce qu’il y aurait eu une erreur susceptible d’entrainer l’annulation, mais a tranché en faveur des Demanderesses, le Tribunal de Resoumission s’est écarté d’une règle fondamentale de procédure, à savoir l’absence de biais.105

226.
The Respondent does not deny that injustice had been done during the military coup d’état and the dictatorship.106 To the contrary, it contends that it deployed great efforts to compensate the people that "had been mistreated by the Military Government."107
227.
The Respondent summarises its position by confirming that:

Chile is not attempting to justify the expropriation, and is still conscious of the injury that the expropriation caused. As will be seen, however, this issue is entirely inapposite for the Committee’s purposes.108

228.
The Respondent contends that the reason for the Applicants’ failure to receive compensation for the expropriation of El Clarin is twofold. On the one hand, they "voluntarily, consciously, and formally renounced their right to obtain reparations under Chilean law" by letter of 24 June 1999, by which they informed the Government that they made use of the "fork-in-the-road" option and pursued their claim through international arbitration.109 On the other hand, the First Tribunal correctly "concluded that the expropriation exceeded the temporal scope of the BIT’S substantive protections,"110 that the expropriation was completed in 1975, before the entry into force of the BIT, and that compensation for expropriation could not be awarded under international law.111
229.
The Respondent speculates about the Applicants’ motivation to pursue the dispute so vigorously:

Now, these particular Claimants are not motivated by rational economic considerations. They are motivated, obviously, by the prospect of a big payoff, but they also see inherent value in keeping this case alive, because by keeping this case alive, they keep their ideological cause in the public eye.

This case continues to be very high profile in Chile. And so the longer this case goes on, the more of these hearings we have, the more it stays in the public eye; and, therefore, this case, in itself, just the actual act of continuing the case, has inherent value to them.112

230.
To the Committee’s mind, two interrelated aspects are crucial for the Applicants’ refusal to accept a result that admits injustice and still denies monetary compensation, and for their conviction that the result must be tainted by systematic bias and partiality. One concerns the parallel but unsynchronised proceedings before national courts and international arbitral tribunals as well as the application or non-application of national law and international law. The other concerns the element of time, which is relevant under three headings: first, the temporal application of the BIT, second, the statute of limitations, and third, the length of Chilean court proceedings, amounting to - in the First Tribunal’s res iudicata finding - a denial of justice and violation of the fair and equitable treatment obligation.
231.
The Committee will deal with these aspects before addressing the different claims and requests for annulment one by one. It does so because their proper appreciation has repercussions for several of these claims, in particular for the allegation of a continuous manifest excess of power and a serious departure from a fundamental rule of procedure as operated through a systematic bias on the part of the Resubmission Tribunal.

(2) The First Award and its partial confirmation by the First Committee

233.
The First Tribunal found, with res judicata effect that:

La requête d’arbitrage et la demande introduite devant le juge chilien ont donc un objet et un fondement distincts. La première consiste à demander réparation du préjudice découlant des actes de saisie et de confiscation relatifs aux sociétés CPP S.A. et EPC Ltda sur le fondement de certaines dispositions de l’API Chili-Espagne, tandis que la seconde vise la restitution d’un bien meuble bien identifié, la rotative Goss, et expressément exclu du champ du consentement à l'arbitrage, en se fondant sur le droit chilien.113

234.
In the end, the Applicants were not successful with their claim before national courts for the restitution of the Goss printing machine, abandoned this effort for a remedy and submitted their claim to the First Tribunal by complementing their initial request.114
235.
Mr. Pey brought his claim before the Chilean courts on the basis of Chilean law, and the Chilean courts applied Chilean law.115
236.
Things are more complicated with respect to the law to be applied by arbitral tribunals. Article 10.4 of the BIT provides:

The arbitration body shall take its decision on the basis of the provisions of this Agreement, of the law of the Contracting Party that is a party to the dispute, including the rules relative to conflicts of laws, and of the terms of any specific agreements concluded in relation to investment, as well as of the principles of international law on the subject.

237.
The Parties hold contradictory views on the proper law to be applied to the issues of Mr. Pey Casado’s ownership of the shares in the Chilean juridical persons, of his nationality, and of his and the Foundation’s investments, and of the expropriation.
238.
The present ad hoc Committee’s authority is limited to a review of the Resubmission Award. However, the Resubmission Award can only be assessed properly by setting it in the perspective of the First Award and the First Annulment Decision, which upheld important parts of it.
239.
The First Tribunal did not apply the provisions of the BIT and national Chilean law cumulatively, incongruously and at random but rather differentiated its application in accordance with specific subject matters and spheres of application.
240.
After a meticulous analysis of Chilean law in paragraphs 179-229 of the First Award, the First Tribunal established that Mr. Pey Casado had acquired shares of the Chilean companies CPP S.A. and EPC Ltda, incorporated under Chilean law, and that this acquisition was perfected before the expropriation was completed by Decree No. 165. It further established, in paragraphs 230-235 of the First Award, that the acquisition was a legal investment under Chilean law and thereby satisfied the criteria of an investment under Article 25 of the ICSID Convention. Finally, it established that Mr. Pey Casado transferred part of the legally acquired shares to the Foundation President Allende in accordance with "le droit applicable a la cession (quel qu 'il soit - espagnol, chilien ou autre)" but in any event not international law.116
241.
For the First Tribunal, these findings are of crucial importance and it reiterates them in strategic contexts as follows in its Award:

Le Tribunal conclut que, au moment où a été effectuée la saisie du journal El Clarn, M. Pey Casado devait être considéré comme le seul propriétaire légitime les actions de la société CPP S.A. (paragraph 229)

Au vu de l'ensemble des développements qui précèdent, le Tribunal conclut qu’il n'existait pas, dans le droit chilien en vigueur en 1972, de définition établie de l’investissement étranger et que l'opération réalisée par M. Pey Casado s'est conformée au droit chilien qui lui était applicable. En conséquence, le Tribunal considère que l'investissement de M. Pey Casado, l'achat d'actions d'une société chilienne du secteur de la presse au moyen de paiements en devises étrangères effectués sur des comptes bancaires en Europe, satisfait les conditions posées par l'API et plus particulièrement par ses articles 1(2) et 2(2). (paragraph 411)

Sur la seconde question, celle de savoir si les investissements des demanderesses ont bénéficié d'un traitement juste et équitable, une réponse négative s'impose de l'avis du Tribunal arbitral, compte tenu des conclusions auxquelles il est parvenu précédemment aux termes de son appréciation des preuves et de son analyse juridique. En bref, il s'agit de la conclusion selon laquelle M. Pey Casado a bien démontré avoir procédé à des investissements et être propriétaire de biens meubles ou immeubles qui ont été confisqués par l'autorité militaire chilienne.

On rappellera à ce propos l'existence d'un jugement chilien reconnaissant la propriété de M. Pey Casado sur les actions confisquées ainsi que le fait que les autorités chiliennes, exécutives et administratives (comme judiciaires) étaient informées des revendications et demandes formulées par les demanderesses.

Quant à l'invalidité des confiscations et au devoir d'indemnisation, il y a lieu de rappeler aussi des déclarations parfaitement claires de la défenderesse dans la présente procédure. (paragraphs 665-667)

242.
The First Committee confirmed the First Tribunal’s findings. It stated that the "Tribunal provided ample and indeed very detailed reasons to support its conclusions" and "that the Tribunal applied the ‘proper law,’ i.e., Articles 1(2) and 2(2) of the BIT as well as the Chilean law to which these provisions refer."117
243.
After having established the Claimants’ ownership and investment, the First Tribunal went on to assess Chile’s conduct after the coup d’état. It describes the seizure of Mr. Pey Casado’s assets by the Chilean military forces in 1973 and the adoption of a series of laws, decrees and other normative acts, amongst which are Decree No. 165 of 10 February 1975 and Decision No. 43 of 28 April 2000. It describes the conduct and the regulatory texts as "faits pertinents,"118 and it subsumes these facts under the provisions of the BIT and international law.
244.
The First Tribunal considered the validity of Decree No. 165 pursuant to Chilean law for the specific purpose of determining whether the expropriation was a continuous or an instantaneous act. The Applicants argued that since the Decree was inexistent under Chilean law, they suffered a de facto expropriation which was continuous in nature, which still continued after the entry into force of the BIT and therefore fell within its temporal scope of application. The First Tribunal rejected this specific thesis of the inexistence (or nullity ab initio) of the Decree on the basis of an analysis of Chilean law:

Le Tribunal relève qu’un certain nombre de ces décrets a été annulé par les juridictions internes chiliennes. [...] A la connaissance du Tribunal, le décret suprême n°165 est toujours en vigueur.

And again:

A la connaissance du Tribunal, la validité du Décret n°165 n’a pas été remise en cause par les juridictions internes et ce décret fait toujours partie de l'ordre juridique interne chilien.119

245.
As a consequence thereof, the First Tribunal was not interested in qualifying Chile’s acts as wrongful and unlawful, because in any event, the expropriation was completed in 1975 and could therefore not qualify as a violation of Article 5 of the BIT, which defines, as elements of a lawful expropriation, that they "must be adopted exclusively for reasons of public utility or national interest pursuant to constitutional and legal provisions, and shall in no case be discriminatory." The Tribunal held that "[l]es biens des sociétés CPP S.A. et EPC Ltda ont fait l’objet d’une expropriation définitive en 1975" executed by the cumulative acts of the seizure by the military in 1973 and the adoption of Decree No. 165120, that "l’expropriation dont se plaignent les demanderesses doit être qualifiée d’acte instantané, antérieur à la date d’entrée en vigueur de l’API," that in 1975, with the adoption of Decree No. 165 "l’expropriation était consommée, quelle que soit l’appréciation que l’on peut porter sur sa licéité,"121 and that it is "impossible d’exproprier deux fois de suite les mêmes biens."122
246.
The First Tribunal’s determination in this matter implicitly followed the Articles on State Responsibility, which the First Tribunal mentioned in other respects.123 Article 14 of the Articles on State Responsibility provides that "[t]he breach of an international obligation by an act of a State not having a continuing character occurs at the moment when the act is performed, even if its effects continue." In a Commentary, the International Law Commission argues that "[e]xceptionally, a tribunal may be justified in refusing to recognize a law or decree at all, with the consequence that the resulting denial of status, ownership or possession may give rise to a continuing wrongful act." The norm and commentary were discussed during the Hearing.124 Without referring to Article 14 or the Commentary but in line with its contents, the First Tribunal discussed whether an exceptional situation existed in the dispute before it. It confirmed that it did not agree that a "violation continue" existed under the circumstances of the case and dismissed exceptional circumstances.125
247.
The First Tribunal left no doubt about the "invalidité des confiscations et au devoir d'indemnisation" and urged Chile to follow up to its own respective recognition of these facts.126 At the same time, it reiterated:

Quoi qu’il en soit de la pertinence et de la valeur des éléments qui ont été retenus à cet égard en droit interne chilien, ces éléments ne peuvent prévaloir sur les considérations qui ont conduit le Tribunal arbitral aux conclusions précédemment énoncées, en application des dispositions de l'API.127

248.
All of this is in line with the distinction between different issues where domestic law and international law each has its own sphere of application, as described by Professor Zachary Douglas:

Any dispute concerning the existence or extent of the rights in rem alleged to constitute an investment that arises in an investment treaty arbitration must be decided in accordance with the municipal law of the host state for this is not a dispute about evidence (facts) but a dispute about legal entitlements. When the issue becomes the international validity of certain acts of the host state which have prejudiced the investor’s legal entitlements under municipal law, then international law applies exclusively.128

249.
The First Committee confirmed the finality of the Tribunal’s assessment.129 It rejected the Claimants’ request to re-open the debate on the effect of the Chilean Constitution as time-barred.130
250.
In conclusion, the First Tribunal, the First Committee, the Applicants and the Respondent agreed that Mr. Pey Casado was expropriated in violation of Chilean law. Notwithstanding this consensus, compensation for this illegal seizure has not been granted, as a result of the combined effects of (i) the rejection of a claim for illegal expropriation under international law by the First Tribunal because it fell outside the temporal scope of the BIT; (ii) the rejection of the claim for the restitution of the Goss machine by a Chilean court because it was time-barred; and (iii) Mr. Pey Casado’s decision to bring the claims before an ICSID tribunal thus excluding national remedies in accordance with the "fork-in-the road" provision of Article 10.2 of the BIT.
251.
This result is a consequence of the interplay and application of national and international law as well as of the passage of time. With respect to international law, the First Tribunal’s finding was confirmed by the First Committee as final and is thus res iudicata. The First Committee confirmed the finality of the First Tribunal’s determination that the Applicants had no entitlement to compensation for the illicit expropriation under international law ratione temporis.
252.
Neither the Resubmission Tribunal nor the present ad hoc Committee has the authority to reverse the consequence, although the Committee understands that the Applicants perceive this as an ongoing and unacceptable injustice perpetrated by a military dictatorship.
253.
The First Tribunal also found that Chile had breached its obligation to treat the Claimants’ investment fairly and equitably, as provided in Article 4.1 BIT. The first such violation consisted in the adoption of Decision No. 43, dated 28 April 2000, i.e. after the entry into force of the BIT, "accordant des compensations pour des raisons qui lui sont propres et sont restées inexpliquées - à des personnages qui, de l'avis du Tribunal arbitral, n’étaient pas propriétaires des biens confisqués."131
254.
The second violation consisted in the delay of more than seven years (1995-2002) for proceedings before the Chilean first instance court on the Claimants’ request for the restitution of the Goss machine. After these seven years, the Applicants abandoned the Chilean court proceedings and submitted the dispute over the Goss machine to the First Tribunal, in complementing their original request. The Tribunal determined that the answer to the "relatively simple question" of whether the period of seven years constituted a denial of justice:

[N]e peut être que positive, au regard des faits établis et déjà retenus par le Tribunal arbitral, l’absence de toute décision par les tribunaux civils chiliens sur les prétentions de M. Pey Casado s’analysant en un déni de justice. En effet, l’absence de décision en première instance sur le fond des demandes des parties demanderesses pendant sept années, c’est-à-dire entre septembre 1995 et le 4 novembre 2002 (moment de l’introduction de la demande complémentaire dans la présente procédure) doit être qualifié comme un déni de justice de la part des tribunaux chiliens. En fait, des délais procéduraux importants constituent bien une des formes classiques de déni de justice.132

255.
The Applicants interpreted the First Tribunal’s finding on a denial of justice as opening the way to the Resubmission Tribunal’s granting compensation based on the injury caused by the expropriation. The issue has caused considerable debate. It is therefore appropriate to quote the Applicants’ position in some detail. They insist that they "ne fondent leur prétention sur une remise en cause du raisonnement du Tribunal arbitral initial ou des parties de la Sentence qui ont autorité de chose jugée."133 At the same time they invite the Resubmission Tribunal to take the alleged deliberate retention into account:

[D]ans la détermination du préjudice résultant du déni de justice, qui doit remettre les parties dans la situation dans laquelle elles auraient dû se trouver si le déni de justice n’avait pas eu lieu. Rappelons en effet, qu’en l’absence de déni de justice, le Tribunal arbitral initial n’aurait pas pu conclure dans la Sentence que « à la connaissance du Tribunal, la validité du Décret n° 165 n’a pas été remise en cause par les juridictions internes et ce décret fait toujours partie de l’ordre juridique interne chilien.134

And:

Le présent Tribunal arbitral devra dès lors constater que l’un des actes de déni de justice commis par la République du Chili à l'égard de M. Pey et de la Fondation a eu pour effet d’empêcher les Demanderesses d’informer le Tribunal arbitral du jugement de la juridiction civile chilienne reconnaissant la "nullité de droit public" du Décret n°165, et, en conséquence, l’absence de titre de l’Etat défendeur sur l’investissement en 1995, compte tenu de la nullité de droit public du Décret n° 165. Ce qui a conduit le Tribunal arbitral à considérer que, "à sa connaissance", ce Décret n’avait pas été remis en cause par les juridictions internes et faisait toujours partie de l’ordre juridique interne chilien, et, par voie de conséquence, que les dispositions de l’article 5 de l’API étaient inapplicables aux faits de confiscation.

Cette tromperie fondamentale démasquée, la Défenderesse ne saurait bien évidemment pas se prévaloir de ses manœuvres procédurales subséquentes.135

256.
The present ad hoc Committee does not share the Applicants’ analysis in this respect.
257.
In fact, the First Tribunal took care to dissociate the issue of expropriation from the two events that in its opinion amounted to a violation of Article 4.1 BIT. The dissociation was crucial for the temporal applicability of the BIT with respect to the violations of fair and equitable treatment. In that perspective, the First Tribunal determined that Decision No. 43 granting compensation for the expropriation of El Clarín to individuals who were not its owners, was not an expropriatory act, since the expropriation was once and for all completed. Rather, Decision No. 43 should "s’analyser davantage en une application discriminatoire d’une loi postérieure au traité et des droits que celle-ci a créés. Il s’agit d’une question distincte et non pas d’un fait identique à l'expropriation"136 The Tribunal found that Mr. Pey Casado had become the owner of the shares and an investor. The discrimination was not caused by Decree No. 165 nor any other act of seizure but by the fact that Chile had decided to compensate "de[s] personnes non-propriétaires" to the detriment and injury of the real owner.137 It has found that this discriminatory conduct had to be considered as an unfair and unequitable treatment.138
258.
As to the long delay of the procedure before the Chilean courts, the First Tribunal found that this delay amounted to a denial of justice and unfair and unequitable treatment, without any reference to the subject matter, i.e. the seizure of the Goss machine.
259.
The issue of the constitutionality and nullity of Decree No. 165 was irrelevant for the adjudication by the First Tribunal of the violation of Chile’s obligation to guarantee fair and equitable treatment.
260.
The First Committee confirmed the violations of the fair and equitable treatment standard and insisted that the First Tribunal had correctly determined that both the execution of Decision No. 43 and the denial of justice "were completely separate and distinct from the 1975 expropriation."139 The First Committee explicitly stated that "the duty to provide redress for violation of rights persists even if the rights as such have come to an end, as long as the relevant treaty obligation was in force for the State concerned at the time of the alleged breach."140 The First Committee thus dismissed Chile’s assertion that subsequent to the expropriation, there was no investment left to which the fair and equitable treatment standard could apply. At the same time, these reasons made it clear that the finding of a breach of fair and equitable treatment was not dependent on the qualification of the expropriation as a continuous fact.
261.
The First Committee confirmed the finality of the First Tribunal’s determination that Chile owes compensation for the violation of its obligation to guarantee fair and equitable treatment, insofar as it occurred after the entry into force of the BIT.
262.
The First Award’s res iudicata effect also prevented the Resubmission Tribunal from taking into account the Applicants’ argument that absent the denial of justice, the First Tribunal could have taken account of the judgment of the Santiago court to the alleged effect that Decree No. 165 was null ab initio so that the expropriation was a continuous fact. Having found that the expropriation was not within the temporal scope of application of the BIT, the First Tribunal reasoned that as a logical consequence thereof, arguments and evidence concerning the expropriation could not be used to establish a prejudice resulting from the denial of fair and equitable treatment. This statement was made in Chapter VIII, paragraph 688 of the First Award. As further discussed in paragraphs 620 ss. below, the First Committee quoted this paragraph affirmatively and confirmed in paragraph 283 of its Decision that "the Tribunal expressly stated that an evaluation of the damages allegedly suffered by the Claimants as a result of the expropriation was irrelevant and that all the allegations, discussion and evidence related to such damages could not be considered by the Tribunal." The First Committee thereby made the content of paragraph 688 of the First Award its own, with the consequence that it was res iudicata for the Resubmission Tribunal.

(3) The Resubmission Tribunal’s general appreciation of the res iudicata effect

263.
The Resubmission Tribunal defined its role as being limited to determining "the nature of the compensation due for the breach or breaches already established by the First Tribunal" and insisted:

[T]hat the present Tribunal is absolved from any need to investigate afresh whether there was any breach of Chile’s obligations towards the Claimants in respect of the present dispute, what that breach consisted in, or whether the breach gives rise to a right to compensation. All of those matters have been predetermined by the First Award and are binding on all Parties under Article 53(1) of the ICSID Convention. Not only is there no need for the Tribunal to go into these matters, but it would be a manifest excess of its own jurisdiction if the Tribunal purported to do so. That is the express consequence of Arbitration Rule 55(3).141

264.
It held, however, that the duty to refrain from re-determining the non-annulled portions of the First Award did not:

[P]revent the present Tribunal from proceeding to an interpretation of the First Award for the purposes of carrying out its mandate under the ICSID Convention and the ICSID Arbitration Rules. Indeed, it could hardly be otherwise; the essence of the Tribunal’s mandate consists in giving effect, in the light of the arguments marshalled by the Parties, to certain paragraphs in the dispositif of the First Award, and this the Tribunal can hardly do without first understanding what those paragraphs mean.142

265.
In that perspective, the Resubmission Tribunal recalls that the First Tribunal had rejected claims linked to the expropriation in 1973-1975 because the temporal scope of the BIT did not cover that period and that only the breach of the Respondent’s obligation to accord fair and equitable treatment, including not to deny justice, which was linked to Chile’s Decision No. 43 of the year 2000 to compensate non-owners instead of Mr. Pey Casado and to the long delay of Chilean court proceedings starting in 1995, was a valid basis for compensation. The Resubmission Tribunal reasons that the Claimants try to circumvent this "insuperable obstacle" by a "complex" answer which it describes as follows:

In certain places, the Claimants contend that elements of the non-annulled parts of the First Award need to be revisited and modified by the present Tribunal. That would however (as already indicated) be well beyond the Tribunal’s functions and powers under ICSID Arbitration Rule 55 and will not be further considered in this Award. The main substance of the Claimants’ answer is, however, different. It consists essentially in the contention that the central consequence of the denial of justice found by the First Tribunal to exist, as a result of the delays in the proceedings before the Santiago court over the Goss press, was that they (the Claimants) were disabled from invoking a conclusive argument that Decree No. 165 was absolutely null (ex tunc) and as such incapable of producing any legal effects. Had they been in a position to do so, the argument continues, they (the Claimants) would either have been able to recover their confiscated property in Chile, or at the least would have been able to establish before the First Tribunal that the expropriation of this property was not an instantaneous act taking final effect in 1975, but was not in fact completed until many years later, and the result of that would have been that the expropriation did indeed fall under the jurisdiction of the First Tribunal under the BIT, contrary to the findings in the First Award.143

266.
The Resubmission Tribunal continues its reasoning through "a brief excursus on the status of Decree No. 165 under Chilean public law" and justifies this excursus as "convenient" since the issue has "absorbed an appreciable portion of the argument between the Parties, both in the written phase and at the oral hearing." It weighs the Respondent’s expert’s reasoning and finds merit in the opinion that the nullity ab initio of a normative act should be pronounced explicitly and that the Claimants’ assertions are more "of the speculative than of the operational."144
267.
The Resubmission Tribunal then considers that it "sees no need to go further into the matter as it has concluded that, even if the Claimants were able to establish the proposition for which they have been arguing, it would have no material bearing on these resubmission proceedings."145 This is due to the possible consequences with respect to remedies which might result from the status of Decree No. 165:

As the Tribunal sees it, there are only two: one is that the First Tribunal was wrong in its finding that the expropriation was excluded ratione temporis from the scope of the BIT; the other is that what amounted in effect (if not in form) to the expropriation took place with Decision No. 43. Each of these has figured, in various forms, in the submissions of the Claimants in the course of these resubmission proceedings. Both of them, however, encounter insuperable difficulties. As to the first, the Tribunal is in no doubt that the First Tribunal, although it used slightly different forms of words in different parts of its Award, was of the view that the expropriation was completed (fait consomme) with the physical seizure in 1975 and thus fell outside the scope of the BIT. More to the point, however, the present Tribunal is simply not empowered to hear an appeal against that finding, or to substitute a view of its own for that of the First Tribunal, or to award any relief of any kind whatsoever on that account. As to the second (i.e. that the effective expropriation did not take place until Decision No. 43), it is also in its turn incompatible with the First Tribunal’s findings as to the chronology of the expropriation, but it is equally incompatible with Decision No. 43 itself, the whole tenor of which is that it was an award of compensation in respect of a confiscation that had already occurred. The Tribunal’s final observation before leaving the subject, is that, if the alleged nullity under Chilean law of Decree No. 165 did indeed have decisive significance, the consequence would surely be that the investment continued to be, in law, the property of Mr Pey Casado and/or the Foundation - the remedy for which could lie in the domestic sphere but clearly not before this Tribunal in these resubmission proceedings.146

268.
In other words, the Resubmission Tribunal reasoned that a finding that Decree No. 165 was null ex tunc would serve no useful purpose in the Resubmission Proceeding, since the Resubmission Tribunal was bound by the First Tribunal’s res iudicata finding that the expropriation was an instantaneous act occurring at the time of that decree.
269.
In addition, the Resubmission Tribunal found that it was also bound by the res iudicata finding in the First Award that the compensation for the violation of the fair and equitable treatment standard could not be based on the value of the expropriated assets. Paragraph 230(d) of the Resubmission Award thus provides that "any assessment of injury and damage based on the original expropriation is inconsistent with the First Award and must therefore be rejected."147 This is discussed in more detail in paragraphs 661-672 below.

(4) The Parties’ positions before this Committee

270.
The anti-constitutionality, the illegality and the absolute nullity ex tunc of Decree No. 165 remain central elements in the Applicants’ claim, "la question la plus essentielle des échanges dans le cadre de la procédure en resoumission."148 They assert that this has been definitely established by the Chilean courts and is res iudicata between the Parties. As a consequence, the Applicants have never lost their status as legal owners and the confiscation in 1973 and 1975 was restricted to a purely physical seizure, to a de facto but not to a de iure confiscation:149

Comme il ressort des §§665-674 de la Sentence initiale, de la décision d’un Tribunal de Justice de Santiago du 29 mai 1995, des articles de la Constitution du Chili d’application directe et impérative tels qu’interprétés par la Cour Suprême, les Demanderesses continuent aujourd’hui à être les propriétaires légaux de tous les biens et droits du Groupe Clarin.150

271.
The Applicants further assert that they did not ask the Resubmission Tribunal to correct the First Tribunal’s determination on the temporal scope of the BIT and the exclusion of a claim for compensation for the expropriation "d'un iota."151 They have not found an error in the First Tribunal’s reasoning with respect to Decree No. 165 at the time of the Award because at that time, the Tribunal "avait estimé devoir s’aligner sur l’hypothèse de sa validité en droit interne"152
272.
Rather, they consider first that the First Tribunal granted a claim for compensation under Article 4 BIT and not under Article 5 because it had found that Chile had acted unfairly and unequitably in compensating non-owners instead of Mr. Pey Casado after the confiscation and its uncontested illegality, and second that the denial of justice had prevented the Applicants from proving the continuous character of the expropriation.153 To this end, they quote in their Memorial on Annulment from their Resubmission Reply of 9 January 2015:

En effet, le déni de justice a consisté en ce que les Demanderesses ont été privées de la preuve des rapports de droits de leur investissement avec l'Etat du Chili. L’effacement des effets du déni de justice ne consiste pas à dire ce que le Tribunal arbitral initial aurait décidé, mais à statuer aujourd’hui en connaissance de cause au lieu et place du Tribunal arbitral initial, puisque cette partie de la décision a été annulée.154

273.
The Applicants assert that the Resubmission Tribunal:

- manipulated and denaturalized the Claimants’ submissions with respect to the First Tribunal’s arguments and findings in order to accommodate the Respondent’s wishes, which amounts to a lack of impartiality and bias and represents a serious departure from one of the most fundamental rules of procedure, i.e. the neutrality and impartiality of the tribunal;155

- failed to apply the applicable law and in particular Article 7 of the Constitution and Chilean court decisions when not treating Decree No. 165 as invalid and null ab initio156

- contradicted itself within the structure of paragraph 198 of the Award, first by presenting a reasoning "concernant l'application du droit applicable sur la question la plus essentielle des échanges dans le cadre de la procédure en resoumission, [qui] est donc limitée à une « brève digression », pourrait-on dire une remarque en passant !, ce qui en soit est contradictoire"; and second by presenting a reasoning on the Claimants’ submissions with respect to Decree No. 165 and Decision No. 43 that the Claimants have never made, these contradictions amounting to a lack of reasons;157 and

- systematically disrespected the unannulled portions of the First Award, in flagrant contradiction of ICSID Arbitration Rule 55(3), and thereby usurped an authority that it does not have and manifestly exceeded its powers.158

274.
The Applicants submit that Subchapter HI E. ("The Status of Decree No. 165") of the Resubmission Award, and in particular its paragraph 198, crystallises the Resubmission Tribunal’s erroneous and annullable reasoning by denying the injustice perpetrated by the military dictatorship and by preventing a just compensation for the illegal confiscation of the Claimants’ investments, caused by unfair treatment and denial of justice. Since paragraph 198 "constitue le point d'ancrage des paragraphes suivants de la 57?,"159 the Applicants request that the Committee not only to annul paragraph 198 but also "les paragraphes de la SR 216, 219, 220, 221, 224, 227-229, 23-236, 244, qui découlent, directement ou indirectement, des ‘conclusions’ établies au § 198 [...] ainsi que, en consequence, les points 2-7 du Dispositif dont ils constituent le fondement et l'ensemble de la SR"160
275.
The Respondent refutes the Applicants’ arguments and request. It asserts that the First Tribunal determined, with res iudicata effect, that the expropriation was completed in 1975, i.e. before the entry into force of the BIT and that "none of the BIT’s substantive provisions applied to the expropriation of El Clarín."161 The Respondent summarises that:

[T]he Resubmission Tribunal concluded that the Chilean law issues under discussion were irrelevant simply because what [sic] Claimants’ theory about the implications of Chilean law necessarily contradicted the conclusions in the First Award. The Resubmission Tribunal therefore could not have accepted such arguments without doing violence to the First Award, which had clearly held that "the expropriation [of El Clarín] was completed (fait consommé) with the physical seizure in 1975 [sic] and thus fell outside the scope of the BIT." Given that conclusion, Claimants’ theories about Decree No. 165 were irrelevant, since the issue of whether or not the expropriation was a continuing one or not - for purposes of the BIT and of international law - did not depend on the legal status of Decree No. 165 under Chilean law. [...] Accordingly, there was no need for the Resubmission Tribunal to take any decision or make any pronouncement on the Chilean law issues that had been raised by Claimants. The tribunal’s handling of the applicable law issues was therefore unimpeachable.162

276.
The Respondent asserts that the "Claimants’ arguments did not persuade the Resubmission Tribunal" and that it is inadmissible to substitute the Resubmission Tribunal’s determination by another one, which would necessarily amount to an appeal.163

(5) The Committee’s Analysis

277.
The Committee will address the asserted grounds for annulment in the subsequent sections of this Decision. In the context of these initial considerations, it will analyse the Resubmission Tribunal’s reasoning and findings with a view to determining whether it was systematically biased in favour of Chile as alleged by the Applicants. Two indicators in that sense would be a denaturalization of the Applicants’ submissions and a disrespect of the First Tribunal’s adjudication in order to accommodate Chile’s interests, thereby disregarding the injustice perpetrated by the military dictatorship through the violent seizure of the Applicants’ investments and the ensuing adoption of an illegal, anti-constitutional and absolutely invalid sham normative act, Decree No. 165, again as alleged by the Applicants.
278.
In that perspective, the Committee has juxtaposed and compared the arguments and findings of the First Tribunal as far as they were confirmed as final by the First Committee, the Resubmission Tribunal, and the Parties in relation to the qualification and relevance of Decree No. 165. After a careful analysis, it has found that the Resubmission Tribunal has not denaturalized the Applicants’ submissions and has not reconsidered the non-annulled portions of the First Award. As a consequence, it cannot confirm that the Resubmission Tribunal acted in a partial and biased manner and favoured Chile by an inappropriate reasoning with respect to this issue. The Committee will document this determination in the following paragraphs.
279.
Paragraph 198 of the Resubmission Award, which the Applicants present as the "anchor" of the Tribunal’s decision on the qualification of the confiscation, starts by stating that the qualification of Decree No. 165 has no "material bearing" on the proceeding. In this light, it is unclear why the Resubmission Tribunal has embarked on a long discussion on that qualification in the preceding paragraph 197. Perhaps it wanted to pay tribute to the fact that the Parties, and in particular the Applicants, had taken the issue very seriously, that it had been a dominant feature during the initial phase, the first annulment phase and the resubmission phase of the proceeding, and that the First Tribunal had not treated the matter in as much detail as it could have done.
280.
Be that as it may, the Resubmission Tribunal’s statement does not distort the First Tribunal’s res iudicata findings on the content and relevance of Decree No. 165. It remains an obiter dictum. Obiter dicta are not grounds for annulment since they are without relevance for the decision and are not outcome-determinative. The decisive finding of the Resubmission Tribunal is the first sentence of paragraph 198 according to which none of the controversial propositions by the Parties has a "material bearing."
281.
This determination dovetails the First Tribunal’s finding and thus respects the res iudicata effect of the First Award. It had decided that the expropriation had been completed irrespective of its illegality. The Resubmission Tribunal accepts this result as res iudicata. It had no authority to re-open this issue. The Applicants’ reproach that it has failed to apply the Chilean Constitution therefore has no legal merit. This is not a matter of whether the Constitution was part of the applicable law before the Resubmission Tribunal. The point is that the First Tribunal’s res iudicata finding that the expropriation was an instantaneous act occurring at the date of Decree No. 165, together with its reasoning that "[à] la connaissance du Tribunal, la validité du Décret n° 165 n’a pas été remise en cause par les juridictions internes et ce décret fait toujours partie de l’ordre juridique interne chilien,"164 barred the Resubmission Tribunal from applying the Chilean Constitution so as to reach the opposite conclusion that the decree was not part of the Chilean legal order so that the expropriation was a continuous act.
282.
Whatever criticism the First Tribunal’s reasoning may attract, it could not be directed against the Resubmission Award. It would be concerned with the First Tribunal’s finding, as confirmed as final by the First Committee.
283.
The Applicants submit that the First Tribunal did not have knowledge about the nullity of Decree No. 165 and therefore decided to "s'aligner sur l’hypothèse de sa validité en droit interne."165 Instead of criticizing the First Tribunal for having made a wrong decision, the Applicants asked the Resubmission Tribunal to decide anew, "en connaissance de cause au lieu et place du Tribunal arbitral initial,"166 taking account also of the Chilean court decision of July 2008 which, as a consequence of the denial of justice, was rendered too late for the First Tribunal to consider.
284.
However, notwithstanding the Applicants’ assertion, the Chilean court decision of July 2008 did not acknowledge the absolute nullity of Decree No. 165. As already mentioned, the decision decided the opposite. Mr. Pey argued before the court that Decree No. 165 was "entaché de nullité de droit public, imprescriptible [et] incurable, qui provoque son inexistence juridique."167 This was disputed by the State which asserted that the decree had been enacted in accordance with constitutional provisions applicable at the time, with the consequence that Mr. Pey’s request was time-barred.168 The Court dismissed Mr. Pey’s argument, reasoning that his claim was time-barred by calculating the relevant periods of time as from the enactment of the decree.169 The Chilean court’s decision therefore appears to be to the effect that Decree No. 165 did exist in the Chilean legal order. One does not see how it would have changed the First Tribunal’s determination that the decree was still part of the Chilean legal order.170
285.
In sum, therefore, by aligning itself on the First Tribunal’s res iudicata assessment, the Resubmission Tribunal complied with its obligation pursuant to Articles 52 and 53 of the ICSID Convention and ICSID Arbitration Rule 55(3) to recognize the non-annulled parts of the First Award as final. In doing so, it did not exceed its power nor did it express bias against the Applicants.
286.
The second sentence in paragraph 198 summarises the Applicants’ argument that Decree No. 165 was illegal, that the physical seizure was not a legally effective expropriation and that, therefore, the Applicants were still the legal owners of the shares and the assets. This cannot be a distortion of the Applicants’ argument, since they state unequivocally that they "continuent aujourd’hui à être les propriétaires légaux de tous les biens et droit du Groupe Clarin"171
287.
The Applicants further assert that the Resubmission Tribunal implies, in the third and fourth sentence of paragraph 198, that the Applicants brought arguments which in fact they never brought, namely that "the First Tribunal was wrong in its finding that the expropriation was excluded ratione temporis from the scope of the BIT" and "that what amounted in effect (if not in form) to the expropriation took place with Decision No. 43."172
288.
As concerns the first limb of this argument, the Applicants had asked the Resubmission Tribunal to decide that Decree No. 165 was null and void ab initio, "en connaissance de cause au lieu et place du Tribunal arbitral initial"173 This was an invitation to correct the First Tribunal’s finding. Even if the Applicants exonerate the First Tribunal from having committed an error by insisting that they did not know better, they nevertheless argue that it appeared - ex post - "wrong" to regard Decree No. 165 as valid, and, as an alleged consequence, that the expropriation was completed. The Committee therefore does not find any evidence of bias against the Applicants in the Resubmission Tribunal’s assumption that the Applicants believed that the First Tribunal "was wrong in its finding" and that their request in effect, albeit indirectly, amounted to requesting the Resubmission Tribunal to overturn res iudicata findings of the First Award.
289.
Along the same lines, the Resubmission Tribunal did not distort the Applicants’ request and argument that it should grant compensation for the violation of fair and equitable treatment based on the value of the expropriated assets because the denial of justice had prevented the Chilean court decision being available in time for the First Tribunal to consider. This request was adequately summarised by the Resubmission Tribunal at paragraph 196 of the Resubmission Award:

[T]he central consequence of the denial of justice found by the First Tribunal to exist, as a result of the delays in the proceedings before the Santiago court over the Goss press, was that they (the Claimants) were disabled from invoking a conclusive argument that Decree No. 165 was absolutely null (ex tunc) and as such incapable of producing any legal effects. Had they been in a position to do so, the argument continues, they (the Claimants) would either have been able to recover their confiscated property in Chile, or at the least would have been able to establish before the First Tribunal that the expropriation of this property was not an instantaneous act taking final effect in 1975, but was not in fact completed until many years later, and the result of that would have been that the expropriation did indeed fall under the jurisdiction of the First Tribunal under the BIT, contrary to the findings in the First Award. From this it follows, so the Claimants’ argument concludes, that the loss suffered by them arising out of the denial of justice is the loss of that right to compensation in the original arbitration, so that such loss is the one they can now claim in the present proceedings.174

290.
The Resubmission Tribunal then - implicitly but certainly - rejected this thesis at paragraph 198 of the Resubmission Award, where it reasoned that the Applicants’ position was incompatible with the First Tribunal’s finding that the expropriation had been completed with the physical taking in 1975, as well as with Decision No. 43 which purported to grant compensation for an expropriation that had already occurred.175 Accordingly, the Resubmission Tribunal did not distort the Applicants’ position and neither does its handling of the request and argument evidence any bias to the detriment of the Applicants.
291.
The second limb of the Applicants’ argument as to the Resubmission Tribunal’s alleged bias evidenced by the fourth sentence of paragraph 198 concerns the Resubmission Tribunal’s incriminated assumption on the Applicants’ conclusion on Decision No. 43. The Applicants criticise the Resubmission Tribunal for assuming that they regarded Decision No. 43 as the expropriatory act, so as to oppose it to them. However, in considering, as it does, the various "conclusions the Claimants would seek to draw [...] so far as the remedies available in the present proceedings are concerned," and in observing that "[a]s the Tribunal sees it, there are only two," the Resubmission Tribunal does not seek to attribute to the Applicants a thesis which was not theirs, but considers all possible ways to make concrete the Applicants’ position in a manner that might possibly warrant the granting of compensation. There is no evidence of bias in these reasons.
292.
As concerns the fifth sentence of paragraph 198 of the Resubmission Award, the Applicants had argued during the resubmission phase that the First Tribunal had considered Decree No. 165 "faisait toujours partie de l’ordre juridique interne chilien, et, par voie de conséquence, que les dispositions de l'article 5 de l'API étaient inapplicables aux faits de confiscation."176 This assertion justifies the Resubmission Tribunal’s statement in the fifth sentence of paragraph 198 that the arguments with respect to the continuous character of the expropriation and the effect of Decision No. 43 "figured, in various forms, in the submissions of the Claimants in the course of these submission proceedings." The Committee does not find any basis for annulment in this statement.
293.
The sixth sentence of paragraph 198 of the Resubmission Award prepares the following sentences and mentions "insuperable difficulties" of the Applicants’ proposals, as assessed by the Resubmission Tribunal. In sentences seven and eight, the Resubmission Tribunal summarises the First Tribunal’s determination correctly that the expropriation was completed in 1975 and states that it has no authority to "hear an appeal against that finding." The Committee does not find any basis for annulment in these statements. With respect to Decision No. 43, the Resubmission Tribunal reiterates that the Claimants’ conclusions do not correspond to the First Tribunal’s chronology and are in themselves based on the completed act of expropriation. Again, these statements do not distort the First Tribunal’s findings.
294.
In the last sentence of paragraph 198, the Resubmission Tribunal makes an observation on the alleged nullity of Decree No. 165 under Chilean law.177 The Resubmission Tribunal believes that "if the alleged nullity under Chilean law of Decree No. 165 did indeed have decisive significance, the consequence would surely be that the investment continued to be, in law, the property of Mr Pey Casado and/or the Foundation - the remedy for which could lie in the domestic sphere but clearly not before this Tribunal in these resubmission proceedings."
295.
The Applicants allege that "la conséquence de ces contradictions étant de submerger les Demanderesses dans le déni de justice le plus absolu consistant en ce que la 2ème Sentence décline (§216) en faveur de ‘la sphère domestique’ la compétence pour porter remède au déni par l'État Chilien, depuis le 24 mai 1995, des droits des Demanderesses sur leur investissement que la Sentence initiale a déclaré sous la protection de l’API"178
296.
The Committee does not share the Applicants’ analysis. The Resubmission Tribunal does not renounce exercising the powers it otherwise has in favour of the domestic sphere. In the preceding sentences of paragraph 198, and in the last sentence itself, the Resubmission Tribunal makes it explicit that, for reasons totally unrelated to any recourse the Applicants may or may not have in the domestic sphere, the Resubmission Tribunal cannot, in accordance with the applicable international law, grant the Applicants the reparation requested. Accordingly, while the Resubmission Tribunal may have been wrong in suggesting that "the remedy [...] could lie in the domestic sphere," this did not constitute a denial of justice, nor did it evidence any bias to the detriment of the Applicants.
297.
In fact, the Resubmission Award echoes the First Award. When discussing the compensation granted by Decision No. 43 to the non-owners instead of Mr. Pey Casado whom the First Tribunal had identified as the real owner and investor, the First Award distinguishes clearly between the spheres of domestic law and international law. It states: "[q]uoi qu’il en soit de la pertinence et de la valeur des éléments qui ont été retenus à cet égard en droit interne chilien, ces éléments ne peuvent prévaloir sur les considérations qui ont conduit le Tribunal arbitral aux conclusions précédemment énoncées, en application des dispositions de I'API."179
298.
The First Tribunal had concluded that the Applicants were entitled to compensation for the consequences of the violation of Chile’s obligation to treat the Claimants fairly and equitably in adopting Decision No. 43 in 2000 but not to compensation for the internationally wrongful act of illegal expropriation. The latter was precluded in international law ratione temporis but not necessarily in national law. This is the reason why both tribunals have urged Chile to compensate the Claimants and to "rétablir la légalité et réparer les dommages causés par le régime militaire," in light of the "invalidité des confiscations"180 The First Tribunal does not doubt the illegality of the expropriation under Chilean law and the entitlement to compensation under Chilean law but sees no possibility to repair the damages under international law, given the inapplicability "ratione temporis des obligations de fonds contenues dans TAPI"181
299.
This is what the Resubmission Tribunal expresses in the last sentence of paragraph 198 of its Resubmission Award. It does not violate the res iudicata effect of the First Award but to the contrary, it abides by it. The Committee does not find partiality in a determination that respects this effect.
300.
In sum, the Applicants’ perception of injustice indeed results from the fact that a violent confiscation by a military regime, which is wrongful, illegal and anti-constitutional under national law, is not sanctioned by an international arbitral tribunal. However, to the Committee’s mind, this result is not attributable to the Resubmission Tribunal but to the res iudicata adjudication of the First Tribunal on the applicability of the law of expropriation under international law, which itself echoed the difficulties inherent in bringing a claim on the basis of a BIT for facts originating before the BIT’s entry into force.

B. The Appointment of Mr. Alexis Mourre and the Resubmission Tribunal’s APPROACH TO THE APPLICANTS’ REQUESTS FOR HIS REMOVAL

(1) The Applicants’ Position

301.
The Applicants asserted three grounds for annulment relating to Mr. Mourre’s appointment by Chile, and the Resubmission Tribunal’s failure to take action on his removal from the Tribunal:

(a) That the Tribunal was not properly constituted (Article 52(1)(a));

(b) That the Tribunal has manifestly exceeded its powers (Article 52(1)(b)); and

(c) That there has been a serious departure from a fundamental rule of procedure (Article 52(1)(d)).

In their Reply on Annulment, the Applicants withdrew their assertion that the Tribunal failed in this respect to state the reasons on which its award is based.182

302.
With respect to the improper constitution of the Tribunal, the Applicants submit as follows.
303.
During the first arbitration Chile forfeited its right to appoint one of the arbitrators when the arbitrator it had appointed resigned without the consent of the Tribunal. The resignation triggered the application of Article 56(3) of the ICSID Convention which provides that in such circumstances the "Chairman [of the Administrative Council] shall appoint a person from the appropriate Panel to fill the resulting vacancy."
304.
The objective of Article 56(3) of the ICSID Convention is, according to an explicatory note of the ICSID Secretariat "to lessen the possibility of a party inducing an arbitrator appointed by it to resign, so as either to enable his replacement by a more tractable person or merely to delay the proceeding."183
305.
The objective justifies the exception of the normal principle, according to which vacancies are to be filled in the same way as the original appointments. It reflects, in the words of A. Broches, "the suspicion that the party [that made the original appointment] may not be a stranger to the resignation." It serves "not only the principles of non-frustration and expediency but also the principle of the immutability."184
306.
In the present case, the Applicants argue, the general suspicion has materialized through Chile’s conduct before the First Tribunal. Chile had to admit before the ICSID Secretariat that its party appointed arbitrator) - in the words of the First Award:

[A]vait cru pouvoir communiquer [le projet de décision partielle proposé par le Président] à la partie qui l’avait désigné, au mépris de l’obligation, incontestée, de la confidentialité des documents de travail du Tribunal et du secret des délibérations. L'existence de cette violation n’est pas contestée, mais au contraire reconnue par défenderesse. Le doute subsiste seulement sur la question de savoir qui en a pris l’initiative mais il n’incombe pas au présent Tribunal arbitral de se prononcer à ce sujet, malgré les protestations et demandes présentées au CIRDI par les demanderesses.185

307.
Chile’s conduct was qualified by the First Tribunal as "incidents parfois incompatibles avec les usages de l’arbitrage international"186
308.
These findings were confirmed by the First Committee. They are res iudicata.187
309.
Therefore, the Applicants argue, Chile has lost its right to appoint an arbitrator for the totality of the proceeding, encompassing the Resubmission Proceeding,188 which are but "a continuation of the original arbitration" as explicitly recognised in the Resubmission Award.189 Instead, the right and duty to appoint the arbitrator which under normal circumstances would have been to be appointed by Chile, had from the moment of resignation been transferred to the Chairman of the Administrative Council.
310.
This is also in line with ICSID Arbitration Rule 55(2)(d) according to which the Secretary-General shall, upon receipt of an annulment request, invite the parties to proceed to constitute a new Tribunal, including the same number of arbitrators, and "appointed by the same method, as the original one." Articles 50(2) and 51(3) of the ICSID Convention and ICSID Arbitration Rules 51(3) and 55(2)(d) use the terms "tribunal initial" "tribunal ayant statué," "original tribunal" and "tribunal which rendered the award" interchangeably. The reference in ICSID Arbitration Rule 55(2)(d) to the "original" Tribunal must therefore be interpreted as a reference to the Tribunal which rendered the award.190
311.
The decisions leading to Mr. Mourre’s appointment and continued membership of the Resubmission Tribunal happened against systematic objections by the Applicants against every single step and decision of the Centre, the Tribunal and Mr. Mourre.191
312.
In sum, the Applicants assert that:

[L]e Centre et, par extension, le Tribunal, auraient dû prendre en compte, au moment de la constitution du tribunal de resoumission, le fait que la Défenderesse avait perdu le droit de nommer un arbitre suite à la démission de M. Franco an cours de la procédure initiale avec la réprobation du Tribunal initial. Le fait d'avoir autorisé la Défenderesse à procéder à la nomination d'un arbitre en la personne de M. Mourre affecte la constitution du TR d’un vice au sens de l’article 52(1)(a) de la Convention.192

313.
With respect to the manifest excess of power, the Applicants submit as follows.
314.
First, the Resubmission Tribunal has violated ICSID Arbitration Rule 55(3) which provides that the "new Tribunal shall not reconsider any portion of the award not so annulled."
315.
During the first arbitration, the Tribunal had determined that the Respondent’s appointed arbitrator had acted improperly and had resigned without consent of the other arbitrators, that Chile had provoked incidents that were contrary to good international arbitration practice, and that the Chairman of the Administrative Council had filled the resulting vacancy by appointing Professor Gaillard. All these findings are res iudicata.
316.
The Applicants argue that the Resubmission Tribunal disrespected these res iudicata effects of the First Award and decided anew, thus arrogating a power that it does not have:

Or l’arbitre ayant rempli la place du Professeur Emmanuel Gaillard, M. Alexis Mourre, a été nommé par l’Etat Défendeur en enfreignant l’autorité de la chose jugée de la Sentence du 8 mai 2008, notamment celle des §§34, 35, 36, 37, 729 en rapport avec les paras. 5 à 7 du Dispositif, la décision du 25 avril 2006 du Tribunal arbitral initial et le §359(4) de la Décision du 18 décembre 2012 du Comité ad hoc, obligatoires pour les parties.193

317.
Second, the Applicants requested that the Tribunal address the question of improper appointment of Mr. Mourre when Procedural Order No. 1 was discussed. Instead of responding to this question in accordance with the authority bestowed upon it by Articles 41(1) and 44 of the ICSID Convention, the Tribunal had simply rejected the request:

At the first session, the Claimants, while indicating that they were not proposing the disqualification of the arbitrator nominated by the Respondent, nevertheless requested the Tribunal to decide whether the arbitrator in question had been duly appointed in accordance with the Convention and Arbitration Rules, and, if not, that the Tribunal invite him to resign; whereas the Respondent maintained that the arbitrator in question had been properly appointed in accordance with Article 37(2)(b) of the Convention. In the absence of a proposal for disqualification under the Convention and Rules, the Tribunal does not feel called upon to rule on the matter.194

318.
The Applicants submit that since a refusal to exercise authority which in fact exists constitutes as much an excess of powers as the exercise of authority which does not exist, the decision of the Tribunal "de ne pas trancher par la voie de l’article 44 de la Convention la question relative à la nomination irrégulière de Tun des arbitres, [...] constitue un tel excès de pouvoir manifeste"195
319.
With respect to a serious departure from a fundamental rule of procedure, the Applicants submit as follows.
320.
The Resubmission Tribunal rejected the Applicants’ request to take action on the irregularity of Mr. Mourre’s appointment stating that it was for the Applicants to initiate such action by a request for disqualification in accordance with Article 57 of the ICSID Convention. Article 57 provides that the disqualification can be proposed on account of facts indicating "a manifest lack of the qualities required by paragraph (1) of Article 14," or when the arbitrator "was ineligible for appointment to the Tribunal under Section 2 of Chapter IV."
321.
However, the Applicants consistently argued that their refusal to accept the appointment of Mr. Mourre was in no way based on any of his personal qualities but on the fact that he was appointed by a party that had forfeited its right to appointment. Therefore, "en imposant aux Demanderesses d’avoir recours à une procédure inapplicable pour trancher la question de procédure relative à la nomination de ce troisième arbitre le Tribunal a manqué aux règles du procès équitable."196
322.
It seems that the Applicants extend their assertion of a serious departure from a fundamental rule of procedure to the Centre, when they submit that they "voient dans cette décision [to incite the Applicants to have recourse to Article 57] du Centre et du Tribunal l’observation grave d’une règle de procedure fondamentale."197

(2) The Respondent’s Position

323.
The Respondent refutes the Claimants’ request and assertions and contends that none of the grounds evoked for annulment with respect to the appointment of Mr. Mourre exists.
324.
With respect to the improper constitution of the Tribunal, the Respondent submits as follows.
325.
Article 52(6) of the ICSID Convention "identifies a closed list of Convention provisions that govern the process of constituting a resubmission tribunal," meaning that other Articles such as Article 56(3) are not applicable.198 Even if the Resubmission Proceeding is the continuation of the original arbitration, the Resubmission Tribunal is not a continuation of the tribunal in the original arbitration. It is, as explicitly stated in Article 52(6) of the ICSID Convention and ICSID Arbitration Rule 55(2)(d), a new tribunal. This new tribunal must be constituted in accordance with Articles 37 to 40 of the ICSID Convention. The unambiguous language of all provisions and their purpose leave no doubt that there is no place for the application of any further norm such as Article 56(3) of the ICSID Convention, be it "by analogy or otherwise."199
326.

In any event, Article 56(3) cannot apply to the constitution of a tribunal because it relates to a situation that has occurred after such constitution, i.e. to the resignation of an arbitrator and a "resulting" vacancy and not the situation at the outset of the constitution of the tribunal. In addition, its plain language restricts the application to one single appointment and the replacement of one particular arbitrator. The Applicants’ theory that an appointing party would be deprived of its right to appoint arbitrators again in any subsequent new proceeding contradicts not only the ordinary meaning of the terms of Articles 56(3), 52(6) and 37 to 40 of the ICSID Convention but also their purpose to establish general rules for the constitution of a new tribunal, on the one hand, and react to a specific situation which has occurred thereafter, on the other.200

327.
The Applicants interpret ICSID Arbitration Rule 55(2)(d) as governing the composition of a new tribunal upon annulment in light of ICSID Arbitration Rule 51, which is concerned with interpretation and revision. Yet, it is useful to have revising and interpreting be done by the same tribunal that rendered the award, and only if that is not possible shall a new tribunal be constituted. The constitution of a new tribunal upon annulment is inherently different.201
328.
Therefore, the Centre and the Resubmission Tribunal respected the procedure provided for in the ICSID Convention and the ICSID Arbitration Rules related to the constitution of the Resubmission Tribunal, and "there is no basis whatsoever for Claimants’ assertion that Chile was not entitled to appoint an arbitrator to the Resubmission Tribunal, and any annulment claim that rests on that premise must therefore be rejected."202
329.
With respect to the manifest excess of power, the Respondent submits as follows.
330.
First, the First Tribunal’s explanations on the resignation of one arbitrator in paragraphs 34-37 of the First Award and the statement on Chile’s alleged delay tactics in paragraph 729 do not amount to a binding decision with res iudicata effect with respect to the appointment of an arbitrator in the Resubmission Proceeding. Therefore, neither the Centre nor the Resubmission Tribunal exceeded their power when accepting the appointment of Mr. Mourre.203
331.
Second, the Resubmission Tribunal did not fail to exercise the authority bestowed upon it by Articles 41(1) and 44 of the ICSID Convention. It has made a ruling on its competence in accordance with Article 41(1) when it found that no action was required with respect to Mr. Mourre’s appointment in the absence of a formal request for disqualification.204
332.
Further, the Resubmission Tribunal conducted the proceeding in accordance with the ICSID Convention and the Rules, when it respected the Convention’s directives that the parties constitute the tribunal in accordance with Chapter IV Section 2, "which is exactly what was done, with the Centre’s blessing." Since there was no issue which was not covered by the Convention and no "lacuna," there was no place for a decision of the Tribunal as required by Article 44 of the ICSID Convention.205
333.
With respect to a serious departure from a fundamental rule of procedure, the Respondent submits as follows.
334.
The Applicants asserted that the Resubmission Tribunal, by requiring them to make an application for the disqualification of Mr. Mourre under Article 57 of the ICSID Convention, committed a serious departure from a fundamental rule of procedure simply because the application would have been inappropriate. They neither substantiated what fundamental rule of procedure was in focus besides another simple assertion that due process had not been respected nor of what the departure consisted. "This is plainly not sufficient" to apply for annulment.206
335.
In addition, the Respondent submits that the Resubmission Tribunal acted correctly when inviting the Applicants to make a formal application without which it would not be authorised to rule on the matter either by inviting Mr. Mourre to resign or the Chairman to appoint another arbitrator, since there "is simply no mechanism in the body of ICSID norms that enables arbitrators to fire a co-arbitrator."207 In fact, an application in accordance with Article 57 of the ICSID Convention does not only allow for the examination of the personal qualities of an arbitrator as required according to Article 14 of the ICSID Convention but also the determination of whether "he was ineligible for appointment." That is exactly what the Applicants’ complaint was about. In other words, the Tribunal’s invitation to make an application under Article 57 of the ICSID Convention did not depart from a procedural rule but indicated the procedurally correct way to trigger a formal determination of the lawfulness of Mr. Mourre’s appointment.208

C. Challenges to Sir Franklin Berman and Mr. V.V. Veeder, their alleged MANIFEST LACK OF IMPARTIALITY, THEIR ALLEGED FAILURE TO DISCLOSE INFORMATION, TO INVESTIGATE RELEVANT FACTS AND TO ORDER THE PRODUCTION OF DOCUMENTS TO CHILE, AND THEIR ALLEGED CONDUCT AFTER THE SECOND CHALLENGE

(1) The Applicants’ Position

336.
The Applicants’ narrative of events, conduct, decisions and circumstances allegedly warranting the annulment of the Resubmission Award of 13 September 2016, because of the participation of Sir Franklin Berman as president and Mr. V.V. Veeder as arbitrator in the Resubmission Tribunal, covers a period starting with the appointment of Sir Franklin Berman on 24 December 2013 and Mr. Veeder on 31 January 2014,209 continuing with:

- the Tribunal’s decision of 21 November 2016 to refuse further disclosure on President Berman’s and Mr. Veeder’s impartiality;210

- President Berman’s letter of 1 March 2017 where he refuses to decide the second challenge of Mr. Veeder;211

- two Decisions of the Chairman of the Administrative Council of 21 February 2017 and 13 April 2017, rejecting the proposals to disqualify President Berman and M. Veeder;

and ending with a Resubmission Tribunal’s decision of 15 June 2017 to reject a request for information from Chile on payments made to Essex Court Chambers.212

337.
The Applicants assert different facts and events for different grounds for annulment:

- The appointment to and the continued membership in the Resubmission Tribunal of President Berman and Mr. V.V. Veeder amount to an improper constitution of the Tribunal (Article 52(1)(a)) of the ICSID Convention) and a serious departure from a fundamental rule of procedure (Article 52(1)(d) of the ICSID Convention).213

- The Resubmission Tribunal’s decision of 21 November 2016 "constitue une infraction grave à la règle de procédure établie à la Règle 6(2) [...] et elle comporte l’annulabilité de la Sentence du 13 septembre 2016 pour le même motif"214

- President Berman’s letter of 1 March 2017 "constitue une inobservation grave des articles 57 et 58 de la Convention, un excès de pouvoir, une inobservation grave d’une règle fondamentale de procédure et un défaut de motifs."215

- The Decision of the Chairman of the Administrative Council, dated 21 February 2017:

[C]onstitue une inobservance grave de la Règle n° 6 et un excès de pouvoir ne pouvant pas valider le vice existant dans la constitution du Tribunal arbitral dans l'étape processuelle régie par l’article 49(2) de la Convention, le manque d'impartialité et de neutralité des arbitres, et son inobservance grave des règles de procédure applicables lors du traitement de la proposition de récusation du 22 novembre 2016.216

- The Decision of the Chairman of the Administrative Council, dated 13 April 2017:

[C]onstitue une inobservance grave des obligations établies à la Règle n° 6 et à l'art. 14(1) de la Convention, et un excès de pouvoir ne pouvant pas valider, le vice dans la constitution du Tribunal arbitral lors de l'étape processuelle régie par l’article 49(2) de la Convention, le manque de neutralité et d’impartialité de M. Veeder et l’inobservance grave des règles de procédure applicables lors du traitement de la proposition de récusation de M. Veeder du 23 février 2017.217

- The Decision of the Chairman of the Administrative Council, dated 13 April 2017:

[C]onstitue une inobservation grave des articles 57 et 58 de la Convention, un excès de pouvoir, avec défaut de motifs, ne pouvant pas valider le vice dans la constitution du Tribunal arbitral lors de l’étape processuelle régie par l'article 49(2) de la Convention, le manque de neutralité et d'impartialité de M. Berman et l’inobservance grave des règles de procédure applicables lors du traitement des propositions de récusation de M. Berman des 28 février et 4 mars 2017.218

- The Tribunal’s decision of 15 June 2017 constitutes an "excès de pouvoir, défaut de motifs et manquement à une règle fondamentale de procedure."219

338.
The Applicants assert that, in sum, all circumstances, taken together, warrant the annulment of the Resubmission Award under Article 52(1)(a), (b), (d) and (e) of the ICSID Convention cumulatively or individually.
339.
With respect to the improper constitution of the Tribunal, the Applicants submit as follows.
340.
Close business relations existed between Chile and Essex Court Chambers "depuis au moins une dizaine d’années," i.e. throughout the period of the Resubmission Proceeding and before and after it. It generated a significant and regular income to Essex Court Chambers of "plusieurs millions voire dizaine de millions de dollars," and of which President Berman and Mr. Veeder, being members, profited at least indirectly. Chile was "un client d’importance stratégique."220
341.
The fact that members of Essex Court Chambers not only acted in favour of but also against Chile is irrelevant for the appraisal because it "n’explique ni n’excuse l’absence de révélation par MM. Veeder et Berman, ou par la Défenderesse, des liens existant entre certains membres des Essex Court Chambers et la République du Chili."221
342.
These are circumstances which should have caused both to decline the appointment or to step down as members of the Resubmission Tribunal, in accordance with the "IBA Guidelines on Conflicts of Interest in International Arbitration." Theirs is the typical situation as described in Article 1.4 as part of the Non-Waivable Red List when an arbitrator derives significant financial income from advisory services that he/she or his/her law firm dispenses to a party. Essex Court Chambers must be equated to a law firm, as they present themselves like a law firm where individual barristers no longer act independently.222
343.
Even if one followed the concept of the IB A Guidelines according to which "barristers’ chambers should not be equated with law firms for the purposes of conflicts, and no general standard is proffered for barristers’ chambers," the same Guidelines provide that "disclosure may be warranted in view of the relationships among barristers, parties or counsel."223 In fact, both the "Waivable Red List" and the "Orange List" require full disclosure, as widely confirmed in literature and case law.224
344.
The obligation of disclosure in situations where business relations exist is commonly accepted in case law, literature and guidelines on ethical and professional conduct of arbitrators. In that sense, the ad hoc committee in Vivendi v. Argentina (II) held - in line with other committees - that "it is for the arbitrator personally first to consider such a connection in terms of a voluntary resignation as arbitrator. Such connection must otherwise be properly disclosed to the parties through an adequate amendment of earlier declarations under Rule 6."225
345.
This duty to disclose also extends to publicly available information since arbitrators, as explained in Tidewater v. Venezuela, are in a better position to gather and evaluate the accurate information than the parties who would have to conduct difficult and intrusive investigations "and rely on indirect and not always reliable sources."226
346.
Under the present circumstances, two connected aspects give rise to serious and objective doubts as to President Berman’s and Mr. Veeder’s impartiality and independence as required by Article 14 of the ICSID Convention and the objectively grounded suspicion that they would seek to rule in Chile’s favour: first, the close business relationship between Chile and Essex Court Chambers from which they profited, and second, the failure to conduct an inquiry on these connections and disclose them, which - in the words of Article 4.1 of the "IBA Rules of Ethics for International Arbitrators" - "creates an appearance of bias, and may of itself be a ground for disqualification."
347.
It is true that before their appointments, both President Berman and Mr. Veeder disclosed that they are members of Essex Court Chambers, and, during the disqualification procedure before the Chairman of the Administrative Council, that they did not and should not have had knowledge about relations between Chile and other members of their Chambers. These declarations are reproduced in the Chairman’s "Decision on the Proposal to Disqualify Sir Franklin Berman QC and Mr. V.V. Veeder QC" of 21 February 2017, in paragraphs 13 and 14. Such declarations are, the Applicants submit, des "tromperie[s] " and "mensongère[s] " :

Que les arbitres n 'aient pas connaissance des montants précis en cause peut se comprendre. Qu 'ils prétendent n 'avoir pas eu connaissance de l'intervention de leurs collègues pour la République du Chili relève en revanche de la gageure.227

348.
According to the Applicants, not only have President Berman and Mr. Veeder failed to make a full disclosure of their Chambers’ long-standing, close, and lucrative relationship with Chile, they have stubbornly, fraudulently and in bad faith refused to start or even facilitate an in-depth inquiry into this relationship.228
349.
This conduct leaves no doubt that both President Berman and Mr. Veeder manifestly lack the qualities required under Article 14(1) of the ICSID Convention, and that they cannot "be relied upon to exercise independent judgment." In fact, the doubt and suspicion have amply materialized, since both arbitrators demonstrated a systematic bias in favor of Chile.
350.
For these reasons, both President Berman and Mr. Veeder must be disqualified, the Resubmission Tribunal was not properly constituted and the ad hoc Committee must annul the Award.
351.
The ad hoc Committee has the authority and the duty to proceed accordingly.
352.
It is true that the Chairman of the Administrative Council formally rejected the request for disqualification on two occasions and for different reasons by his two Decisions "on the Proposals to Disqualify Mr. V.V. Veeder QC and Sir Franklin Berman QC" dated 21 February 2017 and 13 April 2017. It is also true that other ad hoc committees - for instance in EDF v. Argentina and Suez v. Argentina - have found that in such circumstances:

[T]he role of an ad hoc committee is not to determine whether or not an arbitrator possesses the requisite qualities of independence and impartiality; Articles 57 and 58 entrust that function to the remaining members of the tribunal, or to the Chairman of the Administrative Council. Only if the matter is raised for the first time after the proceedings are closed does the ad hoc committee become the primary decision-maker in respect of this issue;229

and:

[A] decision has been made on this issue [of the proper constitution of the Tribunal] in the underlying proceedings and in light of the context as well as the object and purpose of the annulment proceeding, it is not for this Committee to perform a de novo review of any issues decided in the underlying proceedings.230

353.
However, under the circumstances of the present proceeding, a de novo determination on the disqualification and, thus, on the improper constitution of the Tribunal is required because the Chairman’s Decisions:

- were taken after the Resubmission procedure;

- did not take the merits into account and concentrated on purely procedural considerations and thereby have no res iudicata effect, at least as far as the Decision of 21 February 2017 is concerned;

- could not take facts into consideration that emerged only after the Chairman’s decisions;

- and are untenable and manifestly unreasonable.231

354.
Both the ad hoc committees in EDF v. Argentina and Suez v. Argentina confirm this approach. They ruled that an ad hoc committee has the authority to determine the reasons for the disqualification of arbitrators anew, if the Chairman’s decision "not to disqualify the arbitrator in question is so plainly unreasonable that no reasonable decision-maker could have come to such a decision."232 Both committees have correctly dismissed the narrow approach of the ad hoc committee in Azurix v. Argentina which had held that a committee "would only be able to annul an award under Article 52(1)(a) if there had been a failure to comply properly with the procedure for challenging members of the tribunal set out in other provisions of the ICSID Convention."233 The Azurix approach neglects evidently the necessity to protect the ICSID system against partial and biased tribunals.234 The broad power of ad hoc committees to appreciate de novo a challenge previously decided upon by the Chairman of the Administrative Council finds further support in the annulment committee’s decision in Mobil v. Argentina.235
355.
In the present case, both Decisions of the Chairman of the Administrative Council of 21 February 2017 and 13 April 2017 are manifestly untenable and so plainly unreasonable that no reasonable decision maker could have come to such decisions. Further, they constitute a serious departure from ICSID Arbitration Rule 6 and an excess of power, together with (in the case of the Decision of 13 April 2017) a lack of reasons.236
356.
With respect to the Decision of 21 February 2017, which rejects the proposal to disqualify Sir Franklin Berman and Mr. Veeder for purely procedural reasons, the Chairman has simply followed Chile’s biased arguments and documentation through press clippings covering a period from 2012 to 2016, according to which the relations between Chile and Essex Court Chambers were publicly known and regularly reported in the press.
357.
The Chairman has taken these submissions to deduce that "les Demanderesses auraient dû avoir connaissance du fait que certains membres des Essex Court Chambers intervenaient ou étaient intervenus par le passé pour la République du Chili au moment du déroulement de la procédure en resoumission."237 In reality, the press clippings mention a number of people acting as counsel for Chile but none mentions Essex Court Chambers itself. The available information was not detailed and notorious enough to arouse doubts and suspicion and it would have been manifestly unreasonable and excessive to start a systematic inquiry on the connection of the individuals mentioned with Chile and Essex Court Chambers. Before appointing Mr. Veeder, the Applicants had searched for a person who would guarantee quality, prestige and independence and be "at the level of the President,"238 who was member of Essex Court Chambers.
358.
It was not the Applicants’ duty to investigate relations between Essex Court Chambers and Chile but the arbitrators’ duty to disclose it.
359.
Only a few days after the notification of the Resubmission Award, on 18 September 2016, the press published an article which revealed relations between Chile and a member of Essex Court Chambers, specifying that until then these relations had been kept secret ("sigilosca"). The Applicants acted promptly upon this information. As from 20 September 2016, they started to investigate the relations themselves, and they requested in repeated communications to the Centre, that the arbitrators conduct an in-depth inquiry into the relations, which was refused in bad faith.
360.
The Chairman of the Administrative Council exceeded his powers, departed from a fundamental rule of procedure and acted unreasonably by:

- assuming that it was the Applicants’ duty to conduct a conflict search;

- believing Chile’s arguments, failing to examine the press clippings and to add even new ones sua sponte that he had never shared with the Applicants;

- not ordering Sir Franklin Berman and Mr. Veeder to make an inquiry into the relations between Chile and Essex Court Chambers;

- not taking into consideration that the relations had been kept secret and therefore out of reach of the Applicants; and

- defining the period from which to determine whether the Applicants had acted "promptly" in the sense of Rules 9 and 27 from the moment of the appointment of the arbitrators and not from the moment when the Applicants started to have access to secret information, which would undoubtedly lead him to understand that "le caractère prompt de la réaction des Demanderesses est manifeste."239