The following persons were present at the hearing on jurisdiction, namely:
Members of the Tribunal : Professor Francisco Orrego Vicuña, President, Mr. William Laurence Craig and Judge Christopher G. Weeramantry.
ICSID Secretariat : Mr. Ucheora O. Onwuamaegbu, Secretary of the Tribunal.
Attending on behalf of the Claimant: Mr. Hugh R. McCombs, Partner, Mayer, Brown, Rowe & Maw, Chicago; Mr. James E. Tancula, Partner, Mayer, Brown, Rowe & Maw, Houston; Mr. Michael D. Regan, Partner, Mayer, Brown, Rowe & Maw, London; Mr. Timothy Tyler, Mayer, Brown, Rowe & Maw LLP, Houston; Mr. James Fielden, Mayer, Brown, Rowe & Maw; Mr. James A. Chokey, Joy Global Inc.; and Kim R. Kodousek, Joy Global Inc.
Attending on behalf of the Respondent : Dr. Ahmed Sadek El-Kosheri, Kosheri, Rashed and Riad, Cairo; Dr. Andres Reiner, Counsel, Vienna; Counselor Hossam Abd-El Azim, President of the State Lawsuits Authority; and Counselor Osama Aboul-Kheir Mahmoud Soysal.
a. The existence of a forum selection clause in the Contract should be respected with regard to all contractual claims.
b. The absence of any Treaty breaches that can be attributed to the Egyptian Government.
c. That certain conditions required under Articles 25 and 26 of the ICSID Convention and the Treaty are not fulfilled in this case, in particular the requirement of an investment.
"The value of the guarantee is a real contingent liability which has the ongoing potential to affect the day-to-day operation of Joy and its ability to do business. The contingent liability only exists because Egypt have failed to return the guarantees".12
"(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally."
"The promissory notes were issued by the Republic of Venezuela under the terms of the Law on Public Credit (the Law), which specifically governs public credit operations aimed at raising funds and resources ‘to undertake productive works, attend to the needs of national interest and cover transitory needs of the treasure'. It is quite apparent that the transactions involved in this case are not ordinary commercial transactions and indeed involve a fundamental public interest".24
"...comment prétendre, en effet, que le refus de l'Etat débiteur de payer le prix convenu est extérieur au contrat, sous le prétexte qu'il s'agirait de la confiscation de ce prix (ou des biens qu'il represente), alors qu'il saute aux yeux que l'on est en présence de l'inéxecution pure et simple d'une obligation contractuelle, inéxecution qui ne peut d'ailleurs étre constatée par le juge qu'à la lumière du contenu même de ces obligations?".30
"The leases deal with questions that are by definition of a commercial nature. The IPPA [the Treaty] deals with questions that are essentially of a governmental nature, namely the standards of treatment accorded by the State to foreign investors...It is therefore apparent that Wena and EHC (the Egyptian Hotels Corporation) agreed to a particular contract, the applicable law and the dispute settlement arrangement in respect of one kind of subject, that relating to commercial problems under the leases. It is also apparent that Wena as a national of a Contracting State could invoke the IPPA for the purpose of a different kind of dispute, that concerning the treatment of foreign investors by Egypt. This other mechanism has a separate dispute settlement arrangement and might include a different choice of law provision or make no choice at all.The private and public functions of these various instruments are thus kept separate and distinct".31
"In a case where the essential basis of a claim brought before an international tribunal is a breach of contract, the tribunal will give effect to any valid choice of forum clause in the contract".40
"...where "the fundamental basis of the claim" is a treaty laying down an independent standard by which the conduct of the parties is to be judged, the existence of an exclusive jurisdiction clause in a contract between the claimant and the respondent state or one of its subdivisions cannot operate as a bar to the application of the treaty standard".41
"Should the Parties fail to agree upon any or all matters in dispute, the disputed matters will be finally settled in accordance with the rules of ‘UNCITRAL' (United Nations Commission on International Trade rules and Law). The disputes shall be finally settled through arbitration under the auspices of the regional center for arbitration in Cairo after obtaining the consent of the minister of industry or to be settled through Egyptian courts".
"I am solemnly declaring: In the name of the Egyptian Government as well as in the name of IMC that both have never raised and shall never raise in the future any objection against any arbitration that Joy may file against IMC seeking remedies for whatever claims pertaining to or in relation with the contract of 26th April 1998, its amendment or other issues resulting therefrom, including the letters of guarantee. This solemn declaration has to be recorded in the minutes of the meeting and relied upon in any manner the tribunal considers appropriate".43
In the light of the above considerations, the Tribunal decides:
a. The Centre lacks jurisdiction and the Tribunal lacks competence to consider the claims made by the Company.
b. The Tribunal notes that IMC is under the obligation to observe the Contract forum selection clause in so far as arbitration in the Cairo Regional Arbitration Centre governed by the UNCITRAL Arbitration Rules might be initiated by the Company, and to abide by any award issued in respect of this dispute.
c. The Tribunal further takes note that the approval of the Contract by the Minister of Industry constitutes the consent given by the Egyptian State for IMC to submit disputes under the Contract to UNCITRAL Arbitration and that such consent to IMC's agreement to arbitrate has been expressly confirmed by Declaration made in this arbitration by counsel on behalf of the Egyptian State.
d. The Tribunal also takes note that the Egyptian State is under an international legal obligation to facilitate the enforcement of any award issued in this case to the extent that the intervention of the State is required.
e. The Tribunal further notes that the option of submitting the Contract disputes to the Egyptian courts as provided for in the Contract forum selection clause is effectively precluded by the above mentioned Declaration if the Company initiates arbitration proceedings.
f. Each Party shall pay one half of the arbitration costs.
g. Each Party shall bear its own legal costs.
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