Tribunal :
Lord Nicholas Phillips President
Mr. Horacio A. Grigera Naón Arbitrator
Mr. J. Christopher Thomas, QC Arbitrator

ICSID Secretariat :
Ms. Luisa Fernanda Torres Secretary of the Tribunal

For the Claimants :
Mr. Justin Williams Akin Gump Strauss Hauer & Feld
Mr. Stephen Kho Akin Gump Strauss Hauer & Feld
Ms. Katie Hyman Akin Gump Strauss Hauer & Feld
Mr. Johann Strauss Akin Gump Strauss Hauer & Feld
Ms. Katherine Afzal Akin Gump Strauss Hauer & Feld
Mr. Kevin McClintock-Batista Akin Gump Strauss Hauer & Feld
Mr. Thomas R. Kingsbury (*) BSAM and BSLS, Witness
Ms. Audrey Williams (via video link) (*) Benedetti & Benedetti, Witness

For the Respondent :
Mr. E. Whitney Debevoise Arnold & Porter Kaye Scholer LLP
Ms. Gaela Gehring Flores Arnold & Porter Kaye Scholer LLP
Ms. Mallory Silberman Arnold & Porter Kaye Scholer LLP
Ms. Amy Endicott Arnold & Porter Kaye Scholer LLP
Ms. Katelyn Horne Arnold & Porter Kaye Scholer LLP
Mr. Kelby Ballena Arnold & Porter Kaye Scholer LLP
Ms. Bailey Roe Arnold & Porter Kaye Scholer LLP
Ms. Sara Ureña Arnold & Porter Kaye Scholer LLP
Ms. Karla González Embassy of Panama in the U.S.
Ms. Geniva Escobar (via video link) Ministry of Economy and Finances
Mr. Norman Harris Ministry of Commerce and Industry
Mr. Francisco Olivardia Embassy of Panama in the U.S.
Ms. Marissa Lasso de la Vega Ferrari Alfaro, Ferrer & Ramírez, non-testifying independent Panamanian Law Expert

For the United States :⁵
Ms. Nicole Thornton U.S. Department of State
Mr. Matthew Olmsted U.S. Department of State
Mr. John Blanck U.S. Department of State
Ms. Amanda Blunt Office of the U.S. Trade Representative

Court Reporter(s) :
Mr. David Kasdan B&B Reporters

(*) present during his/her examination

On behalf of the Claimants :
Mr. Thomas R. Kingsbury Witness
Ms. Audrey Williams (via video link) Witness

• Claimants : Demonstrative Exhibits CD-001 to CD-002; Exhibits C-127 to C-129; Legal Authorities CLA-039 to CLA-047.

• Respondent : Demonstrative Exhibits RD-001 to RD-003.

• Revised Exhibits: C‐271‐REV (ENG); R‐095‐REV (ENG); VP‐042‐REV (ENG).

• New Exhibits: C‐313 to C‐316; R‐209 to R‐210.

• New Legal Authorities: RLA‐224.

Tribunal :
Lord Nicholas Phillips President
Mr. Horacio A. Grigera Naón Arbitrator
Mr. J. Christopher Thomas, QC Arbitrator

ICSID Secretariat :
Ms. Luisa Fernanda Torres Secretary of the Tribunal

For the Claimants :

Counsel: Akin Gump Strauss Hauer & Feld
Ms. Karol Kepchar Akin Gump Strauss Hauer & Feld
Mr. Stephen Kho Akin Gump Strauss Hauer & Feld
Mr. Justin Williams Akin Gump Strauss Hauer & Feld
Ms. Katie Hyman Akin Gump Strauss Hauer & Feld
Mr. Johann Strauss Akin Gump Strauss Hauer & Feld
Ms. Adriana Ramirez Mateo (paralegal) Akin Gump Strauss Hauer & Feld

Parties:
Mr. Michinobu Matsumoto Bridgestone Licensing Services, Inc.
Ms. Akane Mori Bridgestone Licensing Services, Inc.

Witness: (*)
Mr. Thomas R. Kingsbury Bridgestone Licensing Services, Inc.

Experts:
Mr. Adán A. Arjona Galindo, Arias & Lopez
Mr. Edwin Molino Jimenez, Molino y Moreno
Ms. Roberta Jacobs-Meadway
Mr. Brian M. Daniel Charles River Associates

For the Respondent :
Counsel:
Mr. E. Whitney Debevoise Arnold & Porter Kaye Scholer LLP
Ms. Gaela Gehring Flores Arnold & Porter Kaye Scholer LLP
Ms. Mallory Silberman Arnold & Porter Kaye Scholer LLP
Ms. Katelyn Horne Arnold & Porter Kaye Scholer LLP
Mr. Brian Vaca Arnold & Porter Kaye Scholer LLP
Mr. Michael Rodriguez Arnold & Porter Kaye Scholer LLP
Ms. Natalia Giraldo-Carrillo Arnold & Porter Kaye Scholer LLP
Mr. Kelby Ballena (paralegal) Arnold & Porter Kaye Scholer LLP
Ms. Gabriela Guillen (paralegal) Arnold & Porter Kaye Scholer LLP

Experts:
Ms. Marissa Lasso de la Vega Ferrari Alfaro, Ferrer & Ramírez
Mr. Gabriel Fried Hilco Streambank
Ms. Nadine H. Jacobson Fross Zelnick Lehrman & Zissu, P.C.
Mr. Jorge F. Lee Alemán, Cordero, Galindo & Lee
Mr. Matthew D. Shopp Versant Partners
Ms. Yelena Aleksandrovich Versant Partners

For the United States :
Ms. Lisa Grosh¹¹ U.S. Department of State
Ms. Nicole Thornton U.S. Department of State
Mr. John Blanck U.S. Department of State
Ms. Amanda Blunt Office of the U.S. Trade Representative
Mr. Khalil Gharbieh Office of the U.S. Trade Representative
Ms. Catherine Gibson Office of the U.S. Trade Representative
Mr. Colin Halvey U.S. Department of Treasury
Mr. Jonathan Liebman U.S. Department of Treasury
Mr. John Rodriguez U.S. Patent and Trademark Office

Court Reporter(s) and Interpreters :
Mr. David Kasdan B&B Reporters (English)
Ms. Elizabeth Cicorria D-R Esteno (Spanish)
Ms. Silvia Colla Interpreter
Mr. Daniel Giglio Interpreter
Mr. Charles Roberts Interpreter

(*) not present before his/her examination

On behalf of the Claimants :
Mr. Thomas R. Kingsbury Witness
Mr. Adán A. Arjona Expert
Mr. Edwin Molino Expert
Ms. Roberta Jacobs-Meadway Expert
Mr. Brian M. Daniel Expert

On behalf of the Respondent :
Ms. Marissa Lasso de la Vega Ferrari Expert
Mr. Gabriel Fried Expert
Ms. Nadine H. Jacobson Expert
Mr. Jorge F. Lee Expert
Mr. Matthew D. Shopp Expert

• Claimants : Demonstrative Exhibits CD-003 to CD-007; corrections to Mr. Edwin Molino's First Expert Report.¹⁴

• Respondent : Demonstrative Exhibits RD-004 to RD-010; corrections to Mr. Mathew D. Shopp's Second Expert Report.¹⁵

Tribunal :
Lord Nicholas Phillips President (VC/London)
Mr. Horacio A. Grigera Naón Arbitrator (VC/DC ICSID)
Mr. J. Christopher Thomas, QC Arbitrator (VC/Vancouver)

ICSID Secretariat :
Ms. Celeste Salinas ICSID Legal Counsel (VC/DC ICSID)
(in the absence of the Secretary)

For the Claimants :
Counsel:
Mr. Justin Williams Akin Gump Strauss Hauer & Feld (VC/London)
Ms. Karol Kepchar Akin Gump Strauss Hauer & Feld (VC/DC ICSID)
Mr. Stephen Kho Akin Gump Strauss Hauer & Feld (VC/DC ICSID)
Ms. Katie Hyman Akin Gump Strauss Hauer & Feld (VC/DC ICSID)
Ms. Adriana Ramirez (paralegal) Akin Gump Strauss Hauer & Feld (VC/DC ICSID)

For the Respondent :
Counsel:
Mr. E. Whitney Debevoise Arnold & Porter Kaye Scholer LLP (VC/Panama)
Ms. Gaela Gehring Flores Arnold & Porter Kaye Scholer LLP (VC/Panama)
Ms. Mallory Silberman Arnold & Porter Kaye Scholer LLP (VC/DC ICSID)
Ms. Katelyn Horne Arnold & Porter Kaye Scholer LLP (VC/DC ICSID)
Mr. Brian Vaca Arnold & Porter Kaye Scholer LLP (VC/DC ICSID)
Mr. Michael Rodriguez Arnold & Porter Kaye Scholer LLP (VC/DC ICSID)

Parties:
Mr. Aristides Valdonedo Ministry of Economy and Finance (VC/Panama)
Ms. Germaine Perret Ministry of Economy and Finance (VC/Panama)

Witness: (*)
Amb. Emanuel Gonzalez-Revilla (VC/Panama)
(*) not present before his/her examination

"Article 10.5: Minimum Standard of Treatment.

1. Each Party shall accord to covered investments treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of 'fair and equitable treatment' and 'full protection and security' do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide:

(a) 'fair and equitable treatment' includes the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; […]."³⁶

"[…] [T]he Supreme Court Judgment […] made findings that no honest and competent court could have made. Those incomprehensible findings permeate every element of the Supreme Court's determination, namely the Cassation Recourse, liability under Article 217 of the Judicial Code, causation and loss. Such findings, individually and/or collectively, amount to a denial of justice in breach of the TPA. […]."

(i) the award of US$ 5,431,000 made by the Supreme Court, which is claimed by BSLS alone;³⁹

(ii) damage to the Claimants' respective "trademark rights" alleged to have been caused by the Supreme Court Judgment, in excess of the US$ 5,431,000 above.⁴⁰

"For the reasons set out above and in their Memorial, BSLS and BSAM respectfully reaffirm their request that the Tribunal render an award:

(a) Declaring that Panama has violated its obligations under the TPA;

(b) Ordering Panama to pay damages of between USD 5,988,604 and USD 19,954,541;

(c) Ordering Panama to pay interest on any amount awarded to BSLS and BSAM;

(d) Ordering Panama to pay attorney's fees and expenses arising from these proceedings; and

(e) Granting any further or other relief to BSLS and BSAM that the Arbitral Tribunal shall deem just and proper."⁴²

"289. For all of the foregoing reasons, the Republic of Panama respectfully requests that the Tribunal:

a. Dismiss [BSAM's] claim under Article10.5 of the TPA for lack of standing, or in the alternative, reject such claim for lack of merit;

b. Reject [BSLS's] claim under Article 10.5 of the TPA for lack of merit;

c. In any event, reject (1) [BSLS's] claim to recover the USD 5,431 million in damages awarded to Muresa and [TGFL]; and (2) Claimants' claim for compensation in excess of USD 5,431 million; and

290. Award to Panama, with interest, all costs of the arbitration, including all attorneys' fees, and costs and expenses of Panama."⁴⁶

"For the reasons set forth in Panama's written and oral submissions, Panama respectfully requests that the Tribunal grant the following relief:

a. dismiss, for lack of standing or merit, [BSAM's] claim under Article 10.5 of the TPA;

b. dismiss, for lack of merit, [BSLS's] claim under Article10.5 of the TPA;

c. in any event, reject both Claimants' damages claims (1) for being untethered from any genuine injury caused by the Supreme Court Judgment to Claimants' respective investments, and (2) for exceeding the TPA's territorial limits on damages;

d. order Claimants, jointly and severally, to pay USD 600,000 to cover Panama's costs advances to ICSID, and USD 8,006,906.00 to cover the legal fees and expenses incurred by Panama during this proceeding, plus interest on these amounts at the Wall Street Journal Prime Rate plus 2% per annum from the date of the Award to the date of full payment; and

e. order Claimants to pay any additional costs, including legal fees and expenses, incurred by Panama after 31 October 2019, but before the Tribunal renders its Award, plus interest at the rate specified in sub-paragraph (d) above."⁴⁷

• First, Panama submits that under Article 10.16 of the TPA only a "claimant" is permitted to advance a claim, and a "claimant" refers to "an investor of a Party" as the term is defined in Article 10.29 of the TPA.⁵⁹ It follows, the Respondent argues, that BSJ cannot advance any claims as it does not have the required nationality.⁶⁰

• Second, the Respondent argues that "a claimant may not assert a claim on behalf of another entity, or on the basis of another entity's investment."⁶¹ Accordingly, the Respondent says, claims made on behalf of the "Bridgestone group" are impermissible and the Tribunal must examine BSLS and BSAM's claim separately, as different entities with different investments that have different values.⁶²

• Third, Panama contends that "a claimant may not assert a claim in respect of an alleged investment outside of Panama."⁶³ This is, the Respondent argues, because under the TPA, only a "claimant" might bring a claim, it can only do it on its own behalf, and the definition of "claimant" operates around the existence of an investment in Panama, as does the scope and coverage of Chapter 10 of the TPA.⁶⁴

"As a threshold matter, Article 10.5.1 requires a Party to accord 'treatment' to a covered investment. Article 10.5.1 differs from other substantive obligations (e.g., 10.3, 10.4 and 10.6) in that it obligates a Party to accord treatment only to a 'covered investment.' The minimum standard of treatment under Article 10.5.1 includes the obligation to provide 'fair and equitable treatment,' which, as explained in 10.5.2(a), includes the customary international law obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings. Therefore, to establish a breach of Article 10.5.1 on the basis of denial of justice, a claimant must establish that the treatment accorded to its covered investment rose to the level of a denial of justice under customary international law."

"Because it is intrinsically tied to the treatment afforded to aliens under municipal law, a claim for denial of justice is limited to the treatment that a party experiences over the course of a local (often judicial) proceeding. If a party does not participate in the process, I fail to see how it could assert a denial of justice claim. This is a corollary to at least two well-accepted rules. The first is that the exhaustion of local remedies is a prerequisite to a denial of justice claim; to exhaust a particular remedy, one necessarily must first pursue it. The second is the concept of waiver: If a party declines suo moto to pursue a remedy or argument, it could not properly claim to have been denied access to the courts or an opportunity to be heard. There is also a logical fallacy in the notion that a party could claim that a court violated its right to be heard when that party did not attempt to participate in the judicial proceedings at issue."¹⁰⁶

"Conversely to a free-standing claim for denial of justice which can only be brought by a person that has participated in the national court proceedings, the standard of fair and equitable treatment also protects the foreign shareholder in a local company. If the standard is breached by a denial of justice, the State will be held responsible towards the indirect investor for a breach of fair and equitable treatment."

"It seems to the Tribunal that the two claims must stand or fall together. Each claims in respect of its interest in the FIRESTONE trademark, BSLS as the owner and BSAM as the licensee. Each was benefitting from the exploitation of the trademark. BSLS' interest in the trademark was restricted to the royalties that it was to receive from BSAM for the use of the trademark. BSAM's interest was in the fruits of the exploitation of the trademark. BSAM had relied upon BSLS to protect the trademark and thus to protect BSAM's interest in the trademark. As Ms. Williams explained, BSAM as licensee could have joined with BSLS in opposing the registration of the RIVERSTONE trademark. Had it done so, it would no doubt also have been joined as a defendant in the proceedings that resulted in the Supreme Court's judgment."

"For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of 'fair and equitable treatment' and 'full protection and security' do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide: (a) 'fair and equitable treatment' includes the obligation not to deny justice […] in accordance with the principle of due process embodied in the principal legal systems of the world […]."¹¹³

"BSLS will no doubt consider carefully whether to pursue a claim in relation to events outside Panama in circumstances where the Tribunal has ruled that it has no jurisdiction to entertain an identical claim by BSAM."¹⁴⁸

"This creates uncertainty for a potential purchaser of BSLS or BSAM's trademark rights: how would future courts deal with trademark registrations by competitors? Would competitors file similar damages claims? Would future courts grant those claims, on the basis of the precedent set in the Supreme Court Judgment?"¹⁵⁰

(i) An erroneous decision by a national court does not constitute a denial of justice under international law. A denial of justice under international law will only occur where there is a systemic failure in the administration of justice by a State.¹⁸⁹

(ii) International law does not vest international adjudicators with authority to act as courts of appeal from national courts.¹⁹⁰

(iii) A bona fide error by a court, even if it results in serious injustice in the individual case, does not amount to a denial of justice under international law.¹⁹¹

(iv) An erroneous decision of a national court can demonstrate that there has been a denial of justice under international law if, but only if, it demonstrates that the court was guilty of bias, fraud, dishonesty, lack of impartiality or gross incompetence.¹⁹²

(v) An exacting standard must be applied to the question of whether a particular judicial decision demonstrates a systemic failure that amounts to a denial of justice under international law. That standard normally requires that the decision demonstrates "a wilful disregard of due process at law […] which shocks, or at least surprises, a sense of judicial propriety."¹⁹³

"[T]he proof of the failed process is that the substance of a decision is so egregiously wrong that no honest or competent court could possibly have given it."

"As you are well aware, the Trademark Trial and Appeal Board has rendered judgment against your client, sustained our opposition and refused registration in connection with your client's application to register RIVERSTONE as a trademark for tires.

Please take notice that Bridgestone/Firestone objects not only to any registration of the RIVERSTONE mark for tires by your client, but also to any use of the mark. Although it is not aware of any current use of the RIVERSTONE mark in the United States, Bridgestone/Firestone hereby makes formal demand upon your client to refrain from any use of the RIVERSTONE trademark in the United States now or at any time in the future.

As for use of the RIVERSTONE mark in other countries, please also take notice that Bridgestone/Firestone's position – that L.V. International, Inc. should refrain from use of the RIVERSTONE mark for tires – is not limited to the United States. Without undertaking a country-by-country analysis at this time and without making any specific demand at this time directed to use of the RIVERSTONE mark in any particular foreign country, you and your client should know that Bridgestone/Firestone objects to and does not condone the use or registration anywhere in the world of the mark RIVERSTONE for tires. Hence, L.V. International, Inc. is acting at its own peril if it chooses to use the mark RIVERSTONE in other countries."²⁰⁷

"The plaintiff companies are members of a single corporate group and represent a single group of economic interests, which group has made itself known for a great many years through the use of the identifiers BRIDGESTONE and FIRESTONE to identify a broad range of products in their countries of origin, in Panama, and in international trade."²¹²

"[T]hat the prior-use rights held by Plaintiffs are not unknown to L.V. INTERNATIONAL, INC. and, based on what L.V. INTERNATIONAL, INC. alleged, they should also be known by Defendant MURESA INTERTRADE, S.A. by virtue of their presumed relationship. This leads to the conclusion that the companies in question are fully aware of Plaintiffs' superior rights over the BRIDGESTONE and FIRESTONE brands, and of the harm caused to Plaintiffs by using and registering a brand similar to theirs."²¹⁹

"The manner in which opposing trademarks' presence in the market has materialized (both the opposing and the disputed trademarks, all company trademarks) is one of the determinant factors to eliminate any likelihood of confusion between signs."²²¹

"[G]iven that this administration of justice offices deems that it has acted with evident good faith, maintained and held its position in the process, submitted suitable evidence material to prove its standing in cause, all without abusing the right to litigate."²²²

"[G]iven that the product of the brand RIVERSTONE […] stopped being commercialized (sold) as a consequence of the suit filed."²²⁸

"It is worth noting that in a process opposing the registration of the RIVERSTONE Y DISENO brand filed by BFS BRANDS LLC and BRIDGESTONE/FIRESTONE NORTH AMERICA TIRE LLC against L.V. INTERNACIONAL, INC., in the United States of America, the latter accepted the former's claims."²³¹

"[…] [C]ommercial customers who previously had purchased RIVERSTONE tires refused to place new orders, concerned that they might get caught in the crossfire. To mitigate, Muresa, Tire Group, and L.V. International sold lower-quality replacement tires, which (1) 'were not well received, because [their] customers were already familiar with the quality of RIVERSTONE,' and (2) could only be sold 'at cost or at 50% of cost.'"

"Fears of a seizure were based on the information we were given by customs agents and by some related persons that in the case of a brand registration challenge we could face seizures, and consequently, we decided to halt production, we sent a letter to our agent in China instructing him to communicate this to the factory and that we had also been notified in the Dominican Republic of the seizure of the inventory that our distributors had in that country."²⁴⁰

"Once [sic] of the main reasons for which we stopped selling the brand is that all of the factories in China and all of our customers were aware of the dispute and therefore the latter refused to buy and the former to produce."²⁴¹

"[…] I informed Ms. LUCINDA DE LUQUE in addition to MR. EGGIS LUQUE and MR. FERNAN LUQUE of the objection that existed to the brand in the United States and of the danger that if they continued to import the tire [sic] they could be seized, this according to the letter that was sent to us by our attorney JESUS SANCHEZLIMA. In relation to the letter that he received from the attorneys for BRIDGESTONE Mr. PETER MACK of the FOLEY legal firm, where he stated that we could not register and sell the RIVERSTONE brand in any part of the world and that they could seize any tire not only in the United States but in any part of the world where the RIVERSTONE brand was sold or marketed."

"Also, prior to the complaint, on November 3, 2004, Foley & Lardner LLP Attorneys sent a letter that is attached with the documents submitted with the expert's report, which specifies that the position of Bridgestone/Firestone was to formally request that L.V. International Inc. abstain from using the brand RIVERSTONE, not just in the United States but also in all parts of the world."²⁴⁸

(i) It was not possible to obtain information supporting the veracity of Muresa's sales projections.

(ii) It was not possible to submit a professional opinion as to why the sales projections were not met, because it was not possible to obtain supporting documentation.

(iii) No documents were seen evidencing concern on the part of customers about purchasing RIVERSTONE tires.

(i) She did not see documents supporting Muresa's sales projections.

(ii) She did not see any documents that explained any limitation on achieving Muresa's sales objectives.

(iii) She saw no documentation evidencing concern on behalf of buyers in respect of the purchase of RIVERSTONE tires.

(iv) In relation to the allegation that damages were caused to Muresa because of an inability to sell RIVERSTONE tires:

"We do not have documents that indicate that they have had to suspend sales and the projections were not based on any study, also the question asks what were the damages, by not being able to sell their products, and the company did not stop selling the RIVERSTONE tires, therefore we cannot say if there were damages caused to […] Muresa […] if they existed and neither can we say what the possible causes were of those damages given that there is no information in the file that would allow us to attribute the existence of such damages."²⁵²

(i) The inferior tires had been sold by the plaintiffs before the Trademark Opposition Proceeding, and continued to be sold thereafter.

(ii) RIVERSTONE tires continued to be sold by Muresa after the commencement of the Trademark Opposition Proceeding.

(iii) The plaintiff's evidence was that it was fear of seizure that caused the cease of production and sales of RIVERSTONE tires, not any judicial order in the Trademark Opposition Proceeding; nor could such an order have been made in those proceedings.

(iv) The accountancy evidence, as analysed by the experts, did not reflect the losses alleged by the plaintiff. Insofar as the claim was based on projected sales for 2005 and 2006 there was no accounting basis for these projections, which were in conflict with historic sales accounts.

"[T]he form and substance of each piece of evidence submitted with the third-party coadyuvante application because they are irrelevant to the proceeding and because they are foreign documents that were not properly authenticated […]."²⁷⁰

"The Appellant's disagreement inevitably leads us to exhaustively examine the body of evidence that is the basis of the claim, in accordance, of course, with the requirements to establish non-contractual liability.

In that sense one must seek to DETERMINE THE DAMAGES. As a first precondition of civil liability, we must examine the body of evidence in the file, and the Plaintiff's legal standing to claim the aforementioned damages."

"Consequently, one needs to verify whether the Respondents acted recklessly and [in] bad faith when they opposed the trademark registration requested by the Plaintiffs."

"Thus, it has been understood that 'to become a source of liability, recklessness – represented by an abuse of the litigation right – should be characterized by excessive conduct, where recklessness goes beyond a mere exercise of procedural rights authorized by the law in defense of an interest.' In other words, one infers that recklessness that gives rise to compensation, as stated in Article 217 of the Judicial Code, is comparable to 'gross negligence or willful conduct' […].

[…]

Thus, if the aforementioned recklessness or willful conduct by the Respondents has not been proven, we can hardly examine whether the alleged damages – allegedly caused by a conduct consisting in exercising a right – have been proven, let alone determine their quantum."

"The Cassation Recourse on the merits takes place with regards to the resolutions referred to in [A]rticle 1164, when there are grounds to determine the infringement of substantive rules of law, by any of the following concepts: direct violation, misapplication or misinterpretation of the rule of law, error of fact about the existence of the evidence and the rule of law in terms of the appreciation of the said evidence."²⁷⁷

The error must substantially have affected the result.

"Breach of substantive rules of law, by error of fact as to the existence of the evidence, which has substantially influenced the operative provisions of the appealed resolution (Cause contained in Article 1169 of the Judicial Code)."²⁷⁹

(i) The Foley Letter.

(ii) The evidence of Ms. Moreira, Muresa's accountant, that Muresa and TGFL had ceased to sell RIVERSTONE tires due to the Trademark Opposition Proceeding.

(iii) The record showing that BSJ and BSLS withdrew their appeal in the Trademark Opposition Proceeding.

(iv) The evidence given to the First Instance Court by Muresa's witnesses that Muresa and TGFL could not sell RIVERSTONE tires due to the Trademark Opposition Proceeding.

(v) The evidence given to the First Instance Court by Muresa's witnesses that they were aware of the Foley Letter.

(vi) The evidence of the Muresa accountancy experts that there was a decrease in sales in the sum of US$ 5,168,270.56 due to the Trademark Opposition Proceeding.

"[…] [W]hen evidence in the proceeding was ignored by the Upper Court when issuing a decision; and when such evidence would have had an influence on the dispositive part of the decision."²⁹¹

"[…] [A] thorough review of the challenged Decision shows that the evidence referred to in the Six Reasons was ignored. The Upper Court only pointed out that a review of the body of evidence did not support the Plaintiffs' claim. The Upper Court did not conduct a thorough analysis of the evidence, and did not identify any evidentiary elements referring to it in a general and global way.

[…] It has been shown that the aforementioned evidence was not assessed by the Upper Court in the challenged decision. […]."

"The Chamber notes that the aforementioned evidence, on whose grounds the merits are based, was duly and timely submitted to the Court, and does not appear to have been challenged as to its authenticity and truthfulness. Thus, such evidence may be assessed jointly."

"This Chamber fully verified the body of evidence, on which the notion of factual error is based about the existence of the evidence."

"Such statements clearly and coincidentally show a sales crisis, reflected in the Plaintiffs' earnings which, despite the implementation of contingency plans, could not prevent the loss of sales or market position of the RIVERSTONE brand."²⁹⁸

(i) The Foley Letter was "obviously intimidating and reckless conduct."³⁰⁰

(ii) BSJ and BSLS "went to extremes to oppose the registration of a product brand that was conveniently commercially competitive. Then, after spending a significant amount of time in litigation, they withdrew the appeal [that] they had filed against an adverse Decision."³⁰¹

(iii) There was strong evidence that Muresa had a legal right to market their product and BSJ and BSLS, without strong legal grounds, set out to cause damage to their commercial rivals, wishing to jeopardize Muresa's dominant market presence. This was not behaviour taken in good faith. It was negligent and caused irreversible damage to the plaintiffs' business activities.³⁰²

(i) Submitting the Foley Letter and filing the Trademark Opposition Petition were not "reckless" per se.³⁰⁴

(ii) The Majority Judgment did not verify the Foley Letter's origin, how it reached the proceedings, or when it was drafted or sent.³⁰⁵

(iii) The copies of the Foley Letter did not meet the necessary procedural requirements to be admitted as evidence.³⁰⁶

(iv) The plaintiffs advanced their claim on the basis that owing to the Trademark Opposition Proceeding they stopped selling RIVERSTONE products, but the Majority Judgment states that the damages were caused by a decrease in sales.³⁰⁷ In fact, RIVERSTONE tires were never withdrawn from the market.³⁰⁸

(v) The Majority did not have regard to the plaintiffs' own evidence, which showed that lower quality tires were already being marketed by Muresa before the Trademark Opposition Proceeding.³⁰⁹

(vi) The decrease in sales of RIVERSTONE products was attributable to a fear of seizure and not to the Trademark Opposition Proceeding.³¹⁰

(vii) The Majority disregarded the finding of the Eighth Circuit Court that BSJ and BSLS had acted in evident good faith and without abuse of litigation.³¹¹

(viii) The Majority carried out no analysis to support their conclusion that a US$ 5 million loss was suffered, and ignored the evidence of the Court's expert that there was no evidence to support the damages claimed.³¹²

(i) A Motion for Clarification and Modification.³¹⁴ This was rejected.³¹⁵

(ii) A Request for Judicial Review.³¹⁶ This was rejected.³¹⁷

(iii) An Appeal against the rejection of the Request for Judicial Review.³¹⁸ This was rejected.³¹⁹

(iv) A further Motion for Clarification.³²⁰ This was rejected.³²¹

• There was no basis for the Supreme Court to conclude that the First Superior Court had totally ignored the Foley Letter, because the First Superior Court repeatedly mentioned that letter; and therefore, the Supreme Court's conclusion is "impossible to understand."⁴⁰⁹

• It is "not possible to understand" the Supreme Court's finding that the First Superior Court made a mistake or ignored certain certificates by Muresa's accountants regarding amounts of sales, because, although the First Superior Court did not mention those certificates, it did refer to Muresa's expert reports on quantum which are expressly based on them.⁴¹⁰

• It was "absurd" for Muresa to complain that the First Superior Court ignored the BSJ and BSLS's withdrawal of the appeal in the Trademark Opposition Proceeding, because that fact was never raised by Muresa with the First Superior Court.⁴¹¹

• It is "not possible to understand" how the Supreme Court could have made the finding that the First Superior Court ignored or made a mistake about the existence of witness evidence about the volume of tire sales, because that evidence is expressly cited in the First Superior Court Judgment.⁴¹²

• It is "not possible to understand" how the Supreme Court believed that the First Superior Court ignored a witness statement about alleged threats concerning seizure and confiscation, when the First Superior Court expressly referred to that.⁴¹³

• It is not possible to understand how the Supreme Court concluded that the First Superior Court thought that certain accounting expert evidence did not exist or was ignored, when the First Superior Court Judgment contains numerous references to that evidence.⁴¹⁴

• The Claimants argue that the first basis for liability was the Supreme Court's finding that the Trademark Opposition Proceeding was reckless because (i) Muresa had a legal right to market the product; (ii) Muresa's product was a competitor; (iii) BSLS had intent to cause damage; and (iv) the opposition had no legal basis.⁴¹⁹ And for the Claimants, finding (i) "misunderstand [] the purpose of intellectual property," and "cannot be understood," because the opposition to the registration did not affect Muresa's ability to continue selling;⁴²⁰ finding (ii) is "absurd" because the purpose of the trademark opposition regime is to protect against similar marks for the same or similar products;⁴²¹ finding (iii) is unexplained, and cannot be reconciled with the finding of good faith in the Trademark Opposition Proceeding;⁴²² and finding (iv) is unsupported and based on the fundamental misunderstanding that is wrong to oppose the registration of a mark for a competing product, and it is "impossible to understand" in light of other successful oppositions by the Bridgestone Group of "STONE" suffix trademarks in Panama and the finding of good faith in the Trademark Opposition Proceeding.⁴²³ Moreover, the Claimants argue, there is a "fundamental problem" with the Supreme Court Judgment finding liability under Article 217 of the Judicial Code, which presupposes underlying litigation in which the liable party exhibited bad faith, when the court in the underlying litigation had itself found that the party acted in good faith.⁴²⁴

• The Claimants submit that the second basis of liability was the Supreme Court's finding that the Foley Letter was "obviously intimidating and reckless," which appeared to be the primary basis for liability.⁴²⁵ And for the Claimants, this finding entails a denial of justice because (i) it was "irrational and unreasonable" in light of the content, the sender and the recipient of the letter; and (ii) it was in violation of due process to rely on a document not properly admitted into evidence, and to which BSJ and BSLS did not have an opportunity to respond.⁴²⁶ The Claimants also fault the Supreme Court for not explaining how the Panamanian court "even had jurisdiction" or why Panamanian law should apply to the sending of this letter sent in the United States between U.S. attorneys.⁴²⁷ This finding, the Claimants say, was "so fundamentally flawed" that "no competent court could have reached that outcome."⁴²⁸

• The Claimants contend that the third basis for liability was the Supreme Court's finding that the withdrawal of the appeal in the Trademark Opposition Proceeding was reckless.⁴²⁹ And for the Claimants, this finding is "incomprehensible," because the short deadline to file an appeal makes it inevitable for parties to file precautionary appeals, and the appeal was withdrawn in a timely manner and Muresa did not even have to respond to it, nor did it incur in any cost.⁴³⁰ Moreover, Claimants argue, the finding constitutes a "serious error" because the withdrawal of the appeal was not raised in Muresa's complaint.⁴³¹ Lastly, the withdrawal of the appeal does not constitute evidence that that the Trademark Opposition Proceeding was without merit.⁴³²

• The Supreme Court accepted Muresa's employees and Muresa's accounting expert's assertions that the Trademark Opposition Proceeding had caused RIVERSTONE sales to "cease," without providing any explanation for why that was the case; and failing to recognize that a trademark opposition does not prevent the applicant from continuing to make sales unless there is an injunction, which BSLS never sought.⁴³⁵

• The alleged loss for Muresa concerned sales in Central and South America, the Caribbean and elsewhere, when the opposition action was only in Panama.⁴³⁶

• The Supreme Court ignored contrary documentary evidence, and evidence from BSLS's expert and the Court's own expert.⁴³⁷ There was a "serious procedural defect," and a "fundamental breach of due process," as the Supreme Court made a conscious decision to ignore evidence contrary to its findings, as shown by the fact that such evidence was cited by the dissenting judge.⁴³⁸

• The Supreme Court's finding (that the sales had decreased) was contrary to the allegations in Muresa's own pleadings (that the sales had ceased).⁴³⁹