On 18 December 2012, the Committee issued its Decision on the Application for Annulment of the Republic of Chile (the "Annulment Decision") partially annulling the award rendered on 8 May 2008 in ICSID Case No. ARB/98/2 (the "Award") between Victor Pey Casado and the Foundation "President Allende" (the "Claimants") and the Republic of Chile (the "Republic" or "Respondent").
It argues that Rule 54(3) of the Rules of Procedure for Arbitration Proceedings (the "Arbitration Rules") of the International Centre for Settlement of Investment Disputes (ICSID or the "Centre") establishes this Committee’s power to order the temporary stay of enforcement of the unannulled portions of the Award.3
The power to stay the enforcement of the unannulled portions of an award is intended to help manage the "more complicated case [of execution]" of a partially annulled award. In that scenario, "[p]art of the award remains in existence and would, in theory, be enforceable. But an award that has been annulled in part and upheld in another is likely to create a lopsided situation." [Footnote omitted]
For example, the Committee in MINE v. Guinea recognized the necessity of a stay when it annulled part of the award related to damages. Conversely, in CMS v. Argentine Republic, the Committee did not grant a stay because the partial annulment of the award did not affect the final monetary amount owed. Similarly, in Enron Creditors Recovery Corp. Ponderosa Assets EP. v. Argentine Republic, the Committee refused to grant a stay under Article 54(3) of the ICSID Convention because, although it annulled only the portions of the award on damages and liability, its decision rendered the rest of the award unenforceable. [Footnotes omitted]
The question left open by the Annulment Decision regarding the application of interest to the costs amounts the parties owe each other places in doubt the ultimate sum that the Republic is obligated to pay to Claimants for costs. In view of this uncertainty, any enforcement of the Award would require a judicial court to substitute its judgment for that of the Committee when applying interest, with the risk of an enforcement for the wrong amount, or, conceivably, to deny enforcement of the Award. These outcomes would frustrate the purpose of the Convention, the finality of the Award, and the efforts of the parties to resolve this dispute.8
[...] les Demanderesses ont été dans l’obligation de commencer une procédure d’exécution en Espagne pour forcer le paiement de ces sommes que le Chili a refusé de verser volontairement. Contrairement aux allégations du Chili, cette procédure est parfaitement justifiée et légitime. Les cours espagnoles ont simplement imposé au Chili de respecter ses obligations conformément à la Sentence.16
En réalité, la demande de suspension sollicitée est provisoire pendant « la demande actuelle de procédure supplémentaire ». On relèvera que le Chili a été dans l’incapacité de citer une quelconque disposition de la Convention ou du Règlement octroyant au Comité la compétence d’accéder à une telle requête.19
(2) The Tribunal upon the request of a party made within 45 days after the date on which the award was rendered may after notice to the other party decide any question which it had omitted to decide in the award, and shall rectify any clerical, arithmetical or similar error in the award. Its decision shall become part of the award and shall be notified to the parties in the same manner as the award. The periods of time provided for under paragraph (2) of Article 51 and paragraph (2) of Article 52 shall run from the date on which the decision was rendered.
(5) The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request.
Stay of Enforcement of the Award
(1) The party applying for the interpretation, revision or annulment of an award may in its application, and either party may at any time before the final disposition of the application, request a stay in the enforcement of part or all of the award to which the application relates. The Tribunal or Committee shall give priority to the consideration of such a request.
(2) If an application for the revision or annulment of an award contains a request for a stay of its enforcement, the Secretary-General shall, together with the notice of registration, inform both parties of the provisional stay of the award. As soon as the Tribunal or Committee is constituted it shall, if either party requests, rule within 30 days on whether such stay should be continued; unless it decides to continue the stay, it shall automatically be terminated.
(3) If a stay of enforcement has been granted pursuant to paragraph (1) or continued pursuant to paragraph (2), the Tribunal or Committee may at any time modify or terminate the stay at the request of either party. All stays shall automatically terminate on the date on which a final decision is rendered on the application, except that a Committee granting the partial annulment of an award may order the temporary stay of enforcement of the unannulled portion in order to give either party an opportunity to request any new Tribunal constituted pursuant to Article 52(6) of the Convention to grant a stay pursuant to Rule 55(3).
(4) A request pursuant to paragraph (1), (2) (second sentence) or (3) shall specify the circumstances that require the stay or its modification or termination. A request shall only be granted after the Tribunal or Committee has given each party an opportunity of presenting its observations.
(5) The Secretary-General shall promptly notify both parties of the stay of enforcement of any award and of the modification or termination of such a stay, which shall become effective on the date on which he dispatches such notification.
|8 May 2008||Award||Respondent ordered to pay part of Claimants’ costs||USD 2,000,000.00|
|8 May 2008||Award||Respondent ordered to pay Claimants part of costs of arbitration||USD 1,045,627.78|
|18 November 2009||Revision Decision||Claimants ordered to pay entirety of costs of Revision Proceeding||(USD 200,000.00 + 1,305.11)|
|18 December 2012||Annulment Decision||Claimants ordered to pay half of the costs of Annulment Proceeding||(USD 373,637.78)|
Lastly, with the view to facilitate the enforcement process and taking into account the Committee’s intention to decide the Supplementation Request within a reasonable period of time, the Committee recommends that the Claimants suspend the enforcement proceedings presently pending before the "Tribunal de 1iere Instance No. 101 de Madrid" until such time as the Committee issues a decision on the Supplementation Request.
- Denies the Republic of Chile’s Request;
- Recommends to the Republic of Chile that it pay forthwith to the Claimants the "undisputed" sum of USD 2,470,684.89;
- Recommends to the Claimants that they suspend the enforcement proceedings presently pending before the "Tribunal de liere Instance No. 101 de Madrid" until such time as the Committee issues its decision on the Supplementation Request.
Already registered ?