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Decision on Respondent's Request for Reconsideration


On 2 November 2007, Claimants submitted to the International Centre for Settlement of Investment Disputes (" ICSID " or " the Centre ") a Request for Arbitration against the Bolivarian Republic of Venezuela (" Venezuela " or " the Respondent ") pursuant to Article 36 of the ICSID Convention. On 13 December 2007, the Secretary-General of ICSID registered the Request for Arbitration in accordance with Article 36(3) of the ICSID Convention.
The Tribunal was constituted on 23 July 2008. Its members were Judge Kenneth Keith, President, appointed by the Chairman of ICSID Administrative Council pursuant to Article 38 of the ICSID Convention; Mr L. Yves Fortier, CC, QC, appointed by the Claimants; and Sir Ian Brownlie, CBE, QC, appointed by the Respondent. On 1 February 2010, the Tribunal was reconstituted, with Professor Georges Abi-Saab being appointed by Respondent, following Sir Ian Brownlie's passing.
On 3 September 2013, the Tribunal issued a Decision on Jurisdiction and the Merits, concluding as follows:

"... For the foregoing reasons, the Tribunal decides as follows:

a. It does not have jurisdiction under Article 22 of the Investment Law and accordingly the claims by ConocoPhillips Company are dismissed; and

b. It has jurisdiction under Article 9 of the Bilateral Investment Treaty over:

i. the claims brought by ConocoPhillips Petrozuata BV, ConocoPhilips Hamaca BV and ConocoPhillips Gulf of Paria BV in respect of (1) the increase in the income tax rate which came into effect on 1 January 2007 and (2) the expropriation or migration; and

ii. the claims brought by ConocoPhillips Petrozuata BV and ConocoPhillips Gulf of Paria BV in respect of the increase in the extraction tax in effect from 24 May 2006.

c. All claims based on a breach of Article 3 of the BIT are rejected.

d. The Respondent breached its obligation to negotiate in good faith for compensation for its taking of the ConocoPhillips assets in the three projects on the basis of market value as required by Article 6(c) of the BIT.

e. The date of valuation of the ConocoPhillips assets is the date of the Award.

f. All other claims based on a breach of Article 6(c) of the BIT are rejected.

g. All other questions, including those concerning the costs and expenses of the Tribunal and the costs of the parties' determination are reserved for future determination.

Items (a), (b)(i), (b)(ii), (c), (f) and (g) above have been decided unanimously by the Tribunal. Items (d) and (e) have been decided by majority, with Arbitrator Georges Abi-Saab, dissenting."

On 8 September 2013, counsel for Respondent submitted a letter requesting a clarification and further explanations from the Tribunal regarding certain findings in the Decision on Jurisdiction and the Merits (" the September 8 letter "). In its letter, counsel for Respondent also requested "a limited and focused hearing" to address the specific issues raised.
Counsel for the Claimants replied to the September 8 letter on 10 September 2013. Claimants opposed Respondent's requests and proposed instead a briefing schedule for submissions on quantum.
On 11 September 2013, Respondent submitted further comments, to which Claimants replied on 12 September 2013. Additional comments were received from Respondent on 12, 16 and 23 September 2013 and from Claimants on 23 September 2013.
By letter of 1 October 2013, the Tribunal fixed a schedule for the parties to file submissions on: (i) the Tribunal's power to reconsider the Decision on Jurisdiction and the Merits of 3 September 2013; and (ii) a possible scheduling for quantum briefs.
In accordance with the schedule, the Parties simultaneously filed briefs on 28 October and 25 November 2013


So far as the first matter set out in paragraph 7 is concerned, this decision is limited to answering the question whether the Tribunal has the power which the Respondent would have it exercise. The decision does not address the grounds the Respondent invokes for reconsidering the part of the Decision which it challenges and the evidence which it sees as supporting those grounds. The power must be shown to exist before it can be exercised.
The Parties referred to a number of provisions of the ICSID Convention and the ICSID Arbitration Rules, as well as to commentaries, matters of principle and decisions of various international courts and tribunals. It is convenient to set out the relevant ICSID provisions at this stage:

Convention, Article 43

Except as the parties otherwise agree, the Tribunal may, if it deems it necessary at any stage of the proceedings,

(a) call upon the parties to produce documents or other evidence, and

(b) visit the scene connected with the dispute, and conduct such inquiries there as it may deem appropriate.

Convention, Article 44

Any arbitration proceeding shall be conducted in accordance with the provisions of this Section and, except as the parties otherwise agree, in accordance with the Arbitration Rules in effect on the date on which the parties consented to arbitration. If any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the parties, the Tribunal shall decide the question.

Convention, Article 53

(1) The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention.

Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.

(2) For the purposes of this Section, "award" shall include any decision interpreting, revising or annulling such award pursuant to Articles 50, 51 or 52. Arbitration Rules, Rule 38(2)

(2) Exceptionally, the Tribunal may, before the award has been rendered, reopen the proceeding on the ground that new evidence is forthcoming of such a nature as to constitute a decisive factor, or that there is a vital need for clarification on certain specific points.

The Respondent places major emphasis on Article 44 of the Convention and in particular on its second sentence. That provision, it says, recognises the well-established principle that tribunals have inherent powers to make decisions regarding the conduct of proceedings going beyond the specific rules under which they are constituted provided that such decisions do not contradict those specific rules. It quotes a well known commentator: "An ICSID tribunal's power to close gaps in the rules of procedure is declaratory of the inherent power of any tribunal to resolve procedural questions in the event of lacunae ".1 In support of the proposition that under Article 44, or the inherent powers reflected in it, the Tribunal has power to reconsider the Decision, it cited a number of cases. The Tribunal will return to them.
The Respondent also contends that a tribunal that is still in session can always revise its "interim" and "preliminary" decisions.2 It sees the Decision as an interim one rendered far before the closure of proceedings. Under article 44 of the Convention, it says, the Tribunal remains free to examine evidence up to the time it renders its award.3
In relation to ICSID Arbitration Rule 38(2) which enables the tribunal to reopen even a closed proceeding before an award is rendered on the ground that new evidence is forthcoming or certain points must be clarified, the Respondent quotes this passage from the ICSID official commentary:

"Closure of the proceeding is considered to be without prejudice to the discretionary power of the Tribunal to re-open it on its own initiative or on motion of either party. However, paragraph (2) emphasises the exceptional character of re-opening. Since the new evidence, or the need for clarification, may require both further written and further oral procedures, it is the ‘proceeding' that may be re-opened."4

The Respondent continues in these terms: "if an ICSID Tribunal has the power to reopen even a closed proceeding, there can be no question that it has the power to reconsider an interim decision rendered far before the closing of the proceedings."5
The Claimants submit in respect of Article 44 of the Convention that it "is no licence for a Tribunal to adopt procedures at variance with the ICSID system"6 and that "gapfilling cannot be used to overcome an express prohibition in the ICSID Convention and the ICSID Arbitration Rules."7 That prohibition is seen as arising from article 53: "the ordinary meaning of this provision favors the finality of decisions on merit issues"8. Further, "when the ICSID Convention provides that there are no appeals, it means that there are no appeals... [T]he limited review that is permissible is reserved for after the final award is issued."9 While the Claimants recognised that Article 53 does not explicitly prohibit Parties from appealing decisions rendered in an intermediate phase, that does not mean that there is a "gap" in the rules to be filed using Article 44. "There is an outright prohibition that Venezuela seeks to elide."10
The Claimants next submit that to grant the Respondent the relief it seeks would treat the Parties unequally. For instance, had the Respondent prevailed on jurisdiction or the merits, the Tribunal would have issued an award dismissing the claim and the Claimants would have had no right of appeal.11
Further, the Claimants submit that the Respondent's analogy to the power to reopen under Rule 38(2) is groundless; the stage which that provision refers to has passed: the Tribunal has rendered a decision resolving the merits issues submitted to it.12
By contrast to the Respondent's characterisation of the decision as interim or preliminary, the Claimants see it as having res judicata effect and challengeable only through the post award remedies provided for in Articles 49 to 52 of the Convention.13 It points out that the relief the Respondent is seeking is unprecedented in ICSID practice.14 The ICSID system, they say, "forbids appeal entirely, and restricts even the extraordinary review mechanisms provided for in the Convention until after a final award is issued."15 It provides this background:

That is not the result of accident or oversight. Unlike other systems of international arbitration, the drafters of the Convention consciously chose to permit only one instrument called an award and to defer any remedies until after its issuance.

The Convention's drafters expressly contemplated, for example, that Tribunals could issue decisions on jurisdictions prior to the award. They just as consciously rejected proposals to permit applications for the annulment or challenge of jurisdictional decisions. Among the reasons for this deliberate choice was to avoid the "unfortunate" circumstance of "open[ing] endless possibilities of one Party to frustrate or delay the proceedings". Thus decisions - be they on jurisdiction or the merits - are meant finally to settle a subset of issues that are later incorporated in the final award, and may then, and only then, be subject to review as part of the award.

The drafters of the Convention themselves stressed "[T]he binding character of any decision by [an arbitral tribunal] on preliminary questions or merits."16



The following schedule for quantum briefs is fixed:

a. The Claimants shall file a Memorial on Quantum (including all supporting evidence and legal authorities) within ten (10) weeks from the date of the present Decision;

b. Respondent shall file a Counter-Memorial on Quantum within ten (10) weeks from their receipt of Claimants' full Memorial on Quantum (including all supporting evidence and legal authorities);

c. Claimants shall file a Reply on Quantum within four (4) weeks from their receipt of Respondent's full Counter- Memorial on Quantum (including all supporting evidence and legal authorities); and

d. Respondent shall file a Rejoinder on Quantum within four (4) weeks from their receipt of Claimants' full Reply on Quantum (including all supporting evidence and legal authorities).

e. The Tribunal will fix a date for a hearing on quantum, in consultation with the parties, in due course.

Costs are reserved for future determination.
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