Convened a hearing procedure in the presence of the agents of the parties on May 10, 11, 12, 14, 15, 16, 17 and 18, 2012 in a special hall at the Hotel Athenaeum Intercontinental in Athens and subsequently met in conference in Athens on October 6, 2012, on November 21, 2012, on December 21, 2012, on January 11, 2013, on January 25, 2013, February 8, 2013, February 22, 2013, March 8, 2013, March 15, 2013, March 29, 2013, in order to decide upon the differences which arose between the parties in connection with the no. 020A/03 contract dated May 19, 2003 between the parties of the present arbitration for the provision of the C4I Olympics Security System and related Products and Services ("The Contract"), as modified by subsequent modifications. The procedure of the present arbitration was instituted by the Request for Arbitration dated June 16, 2009, which the Claimant filed with the International Court of Arbitration of the International Chamber of Commerce (ICC) on June 17, 2009, to which the Respondent responded with its answer dated September 25, 2009.
"The difference which the Arbitral Tribunal is called upon to resolve arises from Contract No. 020A/03 which was contracted between the parties on May 19, 2003, the subject of which was, according to article 3.1 of same, the study, design, construction, installation, testing, certification, fulfillment, sale, provision of services, as applicable and "turnkey" delivery of the C4I Systems of Olympics Security, compatible and interoperable amongst each other, as described in Annex A of the above contract as a unified whole, which are comprised of a computer system for security and operations support titled "Command Control Communications Coordination & Integration - C4I" related to the security of the 2004 Olympic Games initially and subsequently for permanent use (hereinafter "C4I System"). According to the Contract, the C4I System is comprised of three systems: (a) the Command Decision Support System - CDSS, comprised in total of 7 sub-systems, (b) the Communication and Information System - CIS, comprised of 13 sub-systems and (c) the Command Support System - CSS, comprised of 10 sub-systems.
The initial contract was subsequently modified by the following amending contracts:
(i) the 1st Amendment dated December 23, 2003
(ii) the 2nd Amendment dated April 7, 2004
(iii) the 3rd Amendment dated June 25, 2004
(iv) the 4th Amendment dated August 05, 2004
(v) the 5th Amendment dated March 29, 2007
(vi) the 6th Amendment dated September 11, 2007
(vii) the 7th Amendment dated October 27, 2008
The initial contract and its modifications shall for the purposes of the present arbitration be hereinafter referred to as the Contract."
"According to the Request for Arbitration dated June 16, 2009 of the Claimant (hereinafter "Request for Arbitration"), the Claimant claims that the Respondent has acted in default of the contract and in bad faith and has committed multiple violations of the Contract. More specifically, the Claimant deems that, while the C4I System has been fulfilled and received by the Respondent and is already being used daily and has become a permanent part of the public safety infrastructure of the Greek State, the Respondent refuses to compensate the Claimant and to return the letters of guarantee which the Claimant had provided. The Claimant argues that the Respondent has not fulfilled its obligations, without any justification and specifically breached the obligation of good faith conduct and compliance with its contractual obligations."
"(d) The reqeusts of the Claimant
With the Request for Arbitration it has filed, the Claimant requests from the Arbitral Tribunal [for]:
The issuance of a decision which shall order the following:
(1) That it recognize that: a) the Claimant has fulfilled its obligation to deliver the C4I System and has fulfilled its obligations for Phase I as demanded by the Contract, b) the Claimant delivered the C4I on time and c) the Respondent has irrevocably received the C4I System in accordance with the terms and conditions of the Contract, as amended, i.e. that de jure receipt has occurred.
(2) To order the Respondent to pay to the Claimant the balance of the Contract (Final Payment), due to receipt of the C4I System, which was evidenced by the Respondent's System Quantitative and Qualitative Receipt Protocol (QQRP) of the System on November 14, 2008. The Respondent be ordered to pay 36,900,810 Euro, plus VAT of 25,093,423 Euro and to reimburse the Claimant for all damages it has suffered as a result of the non-payment and delay in payment of the Claimant by the Respondent pursuant to the Contract with interest.
More specifically (and according to what is specified in Chapter E.V.1 and 2 of the Request for Arbitration):
a. The Respondent be obligated to pay to the Claimant the amount of 15,434,259 Euro with interest, plus VAT of 25,093,423 Euro, an amount which even the Respondent does not doubt constitutes an outstanding contractual payment.
b. That it recognize that the claims of the of the Respondent regarding alleged discrepancies and deficiencies, amounting to 21,466,551 Euro, are unfounded, untrue, unproven and specious and that any attempt by the Respondent to reduce the Final Payment of the Contractual Price, by this amount or any other amount, be rejected as unfounded, unproven and improper.
c. The Respondent violated its obligations in accordance with the Contract, as provided by Amendment No. 5, unlawfully withholding 21,466,551 Euro in payments, based on claims of discrepancies and deficiencies. The Respondent had the contractual obligation (Article 8.8 of the Contract) to participate in and complete all negotiations with the Claimant, regarding any discrepancies and deficiencies, within 50 days. Due to its refusal to participate in said negotiations with the Claimant, the Respondent waived any right to withhold any amounts for any discrepancies and deficiencies. The refusal of the Respondent to participate in negotiations in good faith also proves that the withholding of funds was an unlawful attempt to procure funds from the Claimant. The attempted withholdings are unfounded, unjustified and non-existent. In any event for these reasons, the Respondent must be ordered to pay the additional amount of 21,466,551 Euro for the full payment of the Final Payment of the Contractual Price with interest.
(3) To recognize that the Respondent violated its obligations (Article 11.2 of the Contract) for reduction of the Letter of Guarantee for down payment after the acceptance of the System by the Greek State. Consequently, the Respondent must be ordered to return to the Claimant the outstanding down payment Letter of Guarantee. Furthermore, the Respondent must be ordered to reimburse the Claimant for the additional bank charges it incurred in order to maintain the Letter of Guarantee in effect beyond the timeframe foreseen by the contractual requirements.
(4) To recognize that the Respondent violated its obligations (Amendment 5, specifically Article 11.1.1a and Article 8.8 of the Contract) to reduce the Letter of Guarantee for Good Faith Performance after
(5) the acceptance of the System by the Respondent and [that] it refused to negotiate with the Claimant regarding discrepancies and deficiencies. Consequently, the Respondent must be ordered to return to the Claimant the entirety of the portion of the Letter of Guarantee for Good Performance which concerns Phase I. Furthermore, the Respondent must be ordered to reimburse the Claimant for the additional bank charges it was subjected to in order to maintain the Letter of Guarantee in effect beyond the timeframe foreseen by the contractual requirements.
(5) To recognize that the Respondent did not make (as specified in Chapter V.E.5 of the Request for Arbitration) payments for the structural construction works which were not part of the application framework of the Contract and which the Claimant executed at the instruction of the Respondent prior to the 2004 Summer Olympic Games and that the Respondent be ordered to pay to the Claimant the true cost associated with the requested structural works, a sum of 4,950,000 Euro with interest, since December 17, 2004, at least. Alternatively, the Respondent must be ordered to pay at least the agreed upon reduced price of 3,000,000 Euro of the claim for structural works and to reimburse the Claimant for all damages it has suffered as a result of non-payment of the Claimant by the Respondent, in accordance with the negotiated compromise (Council of State Minutes 1791/18.3.2008 [March 18, 2008), with interest.
(6) To recognize that the Respondent violated its obligation to pay the Claimant for other extra-contractual works, for which it instructed the Claimant, as described in Chapter V.E.6 of the Request for Arbitration ((a) for support for the Final Four Euroleague Basketball and UEFA Final, (b) wiring of the Operations Center of the Ministry of Shipping and the Aegean, (c) wiring of the General Police Directorate of Attica(GPDA) and (d) de-installation of a camera in Igoumenitsa -a sum of 135,083 Euro and Presentation related to Amendment 7: Technical changes 2,415,651 Euro). The Respondent accepted the works, but never paid for them. Consequently, the Respondent must be ordered to pay to the Claimant the entire amount for the extra-contractual works, a sum which exceeds 2,550,734 Euro with interest.
(7) To recognize that the Respondent has unlawfully withheld at least the amount of 722,966.30 Euro, as a result of the incorrect valuation of penalties arising from the Service Level Agreement set forth in the Contract, as defined in Chapter V.E.7a of the Request for Arbitration. Consequently, the Respondent must be ordered to pay to the Claimant this entire amount with interest.
(8) To order the Respondent to pay to the Claimant the amount of 28,750 Euro for decommissioning services of venue sites which were conducted by the Claimant (as defined in Chapter V.E.7b of the Request for Arbitration) and were accepted by the Respondent, with interest.
(9) That it be recognized that the payments, which the Respondent has paid since the signing of Amendment No. 5, were delayed and that the Claimant is entitled to interest on said payments (See (10)Chapter V.E.8 of the Request for Arbitration).
(10) That it be recognized that the Respondent delayed the release of the down payment letters of guarantee of the Claimant upon acceptance of the systems on March 29, 2007. Consequently, the Respondent must be ordered to reimburse the Claimant, for the additional bank charges for maintaining the Letter of Guarantee in effect beyond the time required by the Contract (Chapter V.E.9 of the Request for Arbitration).
(11) That the Respondent be ordered to pay all costs for arbitration, including the legal costs of the Claimant, including its attorney fees, as well as every other cost associated with the present arbitration (expenses for travel, personnel, special advisors etc.).
(12)The Claimant requests any other appropriate forms of restitution of its damages, which the Arbitral Tribunal shall deem just and suitable.
(d1) The Claimant in its "Claimant's Answer to the Supplementalary Answers of the Respondent" dated May 19, 2010 and its letters of May 27, 2010, July 6, 2010 and July 20, 2010 included the following arguments, which it itself summarized:
(1) Subsidiarily (with respect to its demand (2)a above) in the event that, for whatever reason, it be deemed that it is not entitled to receive the requested amount as the outstanding contractual price, the Respondent be ordered to pay the specific amounts either in accordance with the provisions regarding unjust enrichment, or as reimbursement for use, given the long term unencumbered enjoyment by the Respondent of the fruits of the fulfillment of the Claimant's contractual obligations.
(2) That the invalidity of the following actions of the Respondent be recognized:
a) The decision of the Deputy Minister of Citizen Protection dated April 21, 2010 regarding non-approval of the final receipt and final acceptance of the C4I System Olympics Security and regarding withholding of the letters of guarantee for good performance and receipt,
b) The decision of same said Deputy Minister dated May 25, 2010 regarding proclamation of "the supplier company SAIC in forfeiture of the no. 020A/03 contract, as per the part which concerns the provision of training services on Subsystem 1-7 (CDSS) of the C4I System for Olympics Security,
c) The letter by the same Deputy Minister dated May 25, 2010 regarding termination of the Contract, and
d) The two (2) letters by the same Deputy minister dated May 27, 2010 regarding forfeiture of the letters of guarantee, and
(3) That the Respondent be ordered to pay remuneration for any direct and consequential damages which the Claimant has suffered due to the defective fulfillment by the Respondent of its obligations arising from the Contract, as well as from the invalid and unlawful partial termination of the Contract by the Respondent, including the damage from the forfeiture of the letters of guarantee for down payment and good performance, interest on the down payment and financial remuneration, due to immaterial damages, as such damage will be explained by the Claimant in its Statement of Claim."
"According to the Respondent's Answer dated September 25, 2009 (hereinafter "Answer") to the Request for Arbitration, the Respondent claims that the Claimant was not capable of providing to the Respondent a turnkey and elaborate and interoperational security system for the 2004 Athens Olympic Games as required by the terms and conditions set by the Respondent. The Respondent claims that the Claimant did not fulfill its obligations and in particular failed to provide, besides other systems and sub-systems, the CDSS System. The result was that the country was exposed to the danger of international denigration by the impending transfer of the Games to another country. In light of the Olympic Games, the temporary use as needed and non-contractual receipt of some of the Systems and Sub-systems of the C4I was made necessary, without all the agreed testing, subject to the conducting all of the contractual procedures for acceptance of delivery of the System.
The Respondent claims that the Claimant acted in bad faith, abusively and that the Request for Arbitration is being made prematurely. The Claimant should have delivered the C4I System as a unified "turnkey" system ready for operational use. A fundamental term of the Contract was its timely execution. The Claimant delayed and failed to fulfill fundamental arguments of the Contract, mainly the interoperability of the system and the development of the CDSS system.
Following the 5th Amendment of the Contract, while the Respondent fulfilled its obligations, the Claimant did not fulfill its [obligations] and delayed the delivery of some of the remaining sub-systems, such as subsystem 16 AVL, while in subsystem 17 it did not develop a broadband network which it itself had promised. In addition to these, the Claimant did not pay the difference in telecommunications fees, which arose due to the change in the network architecture of subsystem 17, as it was obligated to do under the Contract. Furthermore, it did not fulfill its contractual obligation for construction, up until the completion of the general test of the C4I system (October 2008), of a second switching center in subsystem 20 TETRA at GPDA. In addition, the Claimant delayed the fulfillment of its contractual (5th Amendment) obligation for the delivery of the overall design implementation of sub-systems 1-7.
Furthermore the Respondent claims that SIEMENS HELLAS S.A., replaced the Claimant, following the 5th Amendment of the Contract."
"(f) The arguments of the Respondent
1. Request for postponement of the procedure due to the institution of criminal proceedings. The Respondent requests the postponement of arbitration, in accordance with Article 250 Code of Civil Procedure, due to the institution of criminal proceedings against officers of the company SIEMENS HELLAS S.A. for unlawful and unfair practices in obtaining and executing public contracts, as well as for various crimes which allegedly took place during the period from 2003 to 2007, among other things also for the crimes of fraud during the contracting and executing of the Contract for the C4I Systems, and until the issuance of irrevocable decisions in its criminal cases so that it may successfully exercise its rights to defense. The company SIEMENS HELLAS S.A. was one of the fundamental subcontractors and a chief collaborator of the Claimant, whose rights it assumed, following the 5th Amendment of the Contract, with regard to the provision of Systems and Sub-systems it (i.e. SAIC) had assumed.
2. Challenge on legal merits. Alternatively, the Respondent claims that there is confusion regarding who the legal representative of the Claimant is, as well as how, when and on the basis of which of its charter provisions it was authorized to institute the Request for Arbitration and that moreover, as it arises from the comparison of Annexes Z' of the initial Contract and following the 5th Amendment, the Claimant was replaced, fully and completely, by the company SIEMENS HELLAS S.A..
3. Inadmissibility of the Request for Arbitration due to lack of preliminary proceedings in writing. Article 28 Par. 1 provides a specific written preliminary proceeding, which has both judicial and material content and should have been followed and, because it does not appear that it was followed, the Request for Arbitration is inadmissible.
4. The arguments of the Claimant are inadmissible, groundless in fact and law, among other things and exercised in bad faith and abusively and have been exercised prematurely.
5. The Respondent fulfilled its obligations after Amendment No. 5 of the Contract, in contrast to the Claimant.
6. More specifically, in response to the respective arguments of the Claimant, the Respondent presents the following claims:
(A) Demand no. 1 is refuted on the one hand as abusively presented and on the other hand as vague and groundless in fact and law. With regard to the de jure receipt with deficiencies/ discrepancies it is vague, as the time of receipt is not specified. Furthermore it is groundless, as the Receipt Committee is an advisory body (and it has discovered omissions and deviations, estimated at 21,466,551 Euro, proposing a respective reduction in the price), while the competent body for receipt has not been specified, namely the Minister of Public Order (now Minister of Citizen Protection) in accordance with Article 8.8 of the Contract, as amended, and Articles 68 Par. 5 and 69 Par. 2 PRESIDENTIAL DECREE 284/1989 and Article 19 of Law 3483/2006. The absence of [such] specification is justified due to: a) the criminal outcome of the SIEMENS case which also concerns the specific project and affects direct associates of the Claimant and which criminal outcome may potentially have a direct consequence on the validity of the Contract and b) the technical difficulties presented by the crisis on the suitability of the system in light of the deficiencies/ discrepancies.
(B) Demand no. 2 should be rejected as groundless because the prerequisite for the payment of the price is the receipt which, according to the above, did not take place. Furthermore the claim of the Claimant that the Respondent is obligated to enter into negotiation for possible discrepancies is groundless, as this requires the submission of specific objections to the alleged deficiencies/ discrepancies. In any event, since the receipt of the project has not been approved, no deadline has commenced. Alternatively, if it were to be deemed that receipt has occurred, the amount of 21,466,551 Euro should be withheld, which the Claimant has implicitly accepted, as it did not submit specific objections to the deadline of 50 days of Article 8.8 of the Contract. Furthermore, the amount of 2,900,000 Euro should be withheld for fees for technical advisors in accordance with Article 41.4 of the Contract, as well as every other demand which arises directly from the Contract, the rights of which the Respondent expressly reserves.
(C) Arguments nos. 3 and 4, which concern the reduction of the letters of guarantee, should be rejected as they have as a prerequisite the receipt of the System which has not occurred. More specifically, the Respondent has fulfilled its obligation for gradual reduction of the letters of guarantee of down payment (of 121,879,638 Euro) by 118,772,872.71 Euro and it has not released the amount of 3,106,765.29 Euro, due to impairment, in accordance with Article 11 Par. 3 of the Contract, and shall be released, upon the approval of receipt by the qualified body, in accordance with Article 69 Par. 2 of PRESIDENTIAL DECREE 284/1989. The letter of guarantee for good performance [in the amount] of 15,770,610.00 Euro, shall be returned, in accordance with the terms of the Contract. Also, as concerns the letter of guarantee for good performance [in the amount of] 9,729,290 Euro which corresponds to 10% of the payment for TETRA services and maintenance/ support, this is returned gradually as provided by the Contract.
(D) Demand no. 5 for the payment of 4,950,000 Euro, with interest from 12.17.2004 [December 17, 2004], or 3,000,000 Euro, for additional structural works and remuneration for non-payment must be rejected, because (a) it is vague as to its calculation and amount, but also as to its legal basis, which is not specified, (b) based on the referenced provisions and terms, as well as the referenced Annexes of the Contract it concerns fees not for additional extra-contractual works, but for structural works and a cable tunnel which, even if they are not specifically stated, are part of the Contract, as necessary and required, based on common experience, for the completion of sub-systems 18 and 19, which comprise part of the "turnkey" deliverable as per the Contract, i.e. fully operational and ready for full commercial use, with all of the elements of the infrastructure, of the C4I System. Consequently, the fee for said works is included in the contractual price, (c) the documents of the State agencies and the minutes no. 1791/08 of the COUNCIL of STATE dated 12.17.2004 and 3.29.2007 do not constitute recognition, and in any event, the opinion of the COUNCIL of STATE, without approval from the qualified Minister, does not produce rights for any third party (Article 7 Par. 5 Law 3086/2002 COUNCIL of STATE) and (d) alternatively, is instituted prematurely due to non-issuance of QQRP, in accordance with Article 8 of the Contract or, in the event of discrepancies and deficiencies, approval from the qualified Minister (Article 66 Par. 1b PRESIDENTIAL DECREE 284/89).
(E) Demand no. 6 for the payment of 2,550,734 Euro with interest for other extra-contractual works must be rejected with respect to the first part (135,083 Euro for the execution of four additional works), because (a) the presented additional works do not arise from the Contract, nor are they connected with it and consequently do not fall within the scope of application of Article 28 of the Contract for Arbitration, (b) is vague and (c) alternatively, groundless and the burden of proof lies with the Claimant, while with respect to the second part (2,415,651 Euro for technical changes to the Command Decision Support System CDSS, which were to be incorporated with Amendment 7), because (a) it is vague (the cost is not analyzed, explained or associated with the works, the description of which also is exceptionally vague), it lacks legal basis, given that while the referenced technical changes which form the basis of the contested claim were the subject of related negotiations, were never incorporated into the Contract or in its modification no. 7, without specifying the responsibility or portion of blame of the parties for this, the causal association etc., (b) alternatively, the referenced prices do not correspond with market prices and it is the own fault of the Claimant because it did not follow the lawful procedures and alternatively both parts are instituted prematurely due to the non-issuance of a QQRP (Article 8 of the Contract and 66 Par. 1b PRESIDENTIAL DECREE 284/89).
(F) Demand No.7 (for 722,966.30 Euro which were withheld by the Respondent due to incorrect assessment of penalties for the services of the TETPA system) must be rejected as (a) it is vague and the criteria for proper or improper application of penalties and the mistakes of the administration are not specified, (b) the matter of the manner of determining the reduction of the price for deficiencies - discrepancies of said subsystem has been deemed binding for the parties by the dispute resolution committee of Article 69 PRESIDENTIAL DECREE 284/1989, which the Claimant willingly sought, and the Arbitral Tribunal does not have the authority to judge the matter, nor to cancel enforceable individual administrative acts, such as the decision of the committee, which should have been contested in due time at the administrative court of appeals and (c) in any event the calculation was neither erroneous, nor abusive, because the penalties for the reduced provision of TETRA services, of 722,966.30 Euro, have been partially imposed for the time period from the month of September 2007 through December 2008, and not erroneously [as] referenced in the petition of December 2007, in accordance with the manner indicated by the dispute resolution committee and the criteria of the Contract. The demand for interest is groundless in law because for interest to accrue action for payment is required (Article 21, KA 26/10 July 1944 Code of Law on Public Proceedings).
(G) Demand no. 8 (for 28,750 Euro) for site decommissioning service is vague, groundless in fact and law.
(H) Demand no. 9 (for interest on late payments) should be rejected because (a) it is groundless in law, since interest is sought before a lawsuit is brought (Article 21 K.A. 26/10 July 1944), (b) the delays are due to the Claimant, some could not be made before the 5th Amendment or were justified due to testing, (c) in any event, the demand is groundless in fact and law.
(I) Demand no. 10 (compensation for bank fees, due to delay in releasing the down payment letters of guarantee), must be rejected as it is vague and not rebuttable and arbitrated. In any event, this claim is groundless in fact and law.
(J) The demand for the payment of VAT, in the amount of 25,093,423 Euro, is groundless and premature, as the determination of VAT requires the final determination of the amount owed, following its receipt by the Agency and the submission of a related statement on the part of the Claimant, in accordance with the applicable provisions of the Code on Value Added Tax.
7. The claim of the Claimant for payment by the Respondent of any compensation is unlawful and groundless with respect to all of its bases, as those are outlined in the Request for Arbitration and must be rejected.
8. The Respondent retains the right to further develop and prove its claims with every legal means before the Arbitral Tribunal and to rebut the claims of the Claimant, as unlawfully and groundlessly presented with the aim of the rejecting the Request for Arbitration as inadmissible and groundless, in law and in fact.
9. A demand for the Claimant to be ordered to pay the expenses of the Arbitration Trial and the fees of the Arbitrators.
10. The Respondent retains the right to seek from the Claimant compensation for every damage to the Respondent from the violation of contractual terms, due to tort and in general any legal basis orcause, aswellasthe satisfaction of any of its rights arising from the contractoratort. The Respondent retains the right to demand from the Claimant beyond its already collectively stated claims and the penalties imposed by the no. 9008/13/216pn0'/5-25-2010 decision declaring the Claimant in default and the no. 7739-ζ/5-25-2010 partial termination of the Contract, every claim which arises from the above imposed partial termination of the Contract and the imposed default.
11. The Respondent submitted, along with its comments and observation on the plan of the Framework Document and within the deadline which was allowed for comments by the President of the Arbitral Tribunal, the Supplementary answer court document dated 4/20/2010 in which it included the following arguments, claims and reservations, as it itself summarized as follows:
(1) That the invalidity of the arbitration clause be recognized and therefore the lack of jurisdiction of the Arbitral Tribunal to remedy this dispute.
(2) In connection with the request for postponement of the arbitration, due to the exercising of criminal proceedings, which was submitted with the Respondent's Answer and in connection with the Invalidity of the arbitration clause, which was submitted with the Supplementary answer dated 4-20-2010, the Respondent expressly reserved the right to seek the cancellation, of the validity of the Contract, as well as the arbitration clause, due to fraud and corruption as well as the recovery of any other damage in this regard.
(3) To offset, as per Article 47 of PRESIDENTIAL DECREE 284/89 and Article 440 of the Civil Code the legal claims of the Claimant, at least as equal in amounts (70,246,683.30 Euro) to the arguments of the Respondent from the Claimant which arise from:
(a) contractual penalties, in the amount of 14,777,043 Euro,
(b) the non-development of a broadband network in subsystem 17, a total amount which shall be defined by the Respondent with its briefs,
(c) the cost associated with the Respondent's use of subsystem 17 from November 2003 up to the approval of its protocol of receipt, as well as from the non-payment of the additional telecommunications costs after the approval of receipt of subsystem 17, in accordance with the terms of the Contract, the total amount of which will be defined by the Respondent in its briefs,
(d) the failure of full operational realization of the C4I System due to failure to fulfill the contractual obligations of the Claimant, involving "turnkey" delivery of the compatible and interoperable C4I Systems, in the amount of at least 63,750,000 Euro,
(e) the failure to fulfill the contractual obligations of the Claimant to create a second switching center in subsystem 20 at GPDA, in the amount of at least 40,000,000 Euro,
(f) the Claimant's failure, at the expense of the Respondent, to provide repair work of problems in sub-systems 1-7 due to non-use and sub-systems 8-30 due to lack of interoperability, amounting to at least 3,500,000 Euro, and
(g) forfeiture of interest from a) transactions regarding the provided down payment until the date the supplier was declared to be in default and b) delays imposed by the no. 9008/13/216pn0'/5-25-2010 decision declaring the Claimant forfeited from providing the training service for sub-systems 1-7 CDSS. The analysis of these amounts shall be submitted with the briefs.
(4) As regards the second demand of the Claimant regarding payment of the remaining price in the amount of 36,900,000 Euro, it is added that, alternatively, if it is deemed that delivery of the project has occurred, an amount equal to at least the above amount which corresponds to the value of the deficiencies/ discrepancies of the project according to the technical and operational specifications be deducted, and/ or in any event that the amount of 21,466,551Euro be withheld from the price.
12. In addition, with its second Supplementary answer dated 5/14/2010, the Respondent notified the Arbitral Tribunal, delivering attached copies of : a) the decision of the Deputy Minister of Citizen Protection dated 4-21-2010 with which the final receipt and final receipt of the of the C4I System was not approved, as non-compliant with the provisions of the Contract and down payment letters of guarantee were withheld, in the amount of 3,106,766.29 and good performance, in the amount of 15,770,610.00 Euro and b) the Extrajudicial Declaration/ invitation of same said Deputy Minister dated 4-21--2010, with which the intent to terminate contract 020/A/03 is declared, unless the C4I System is delivered in "turnkey" status within 15 days or the Claimant proposes a remedy in accordance with the contractual obligations and a related timeframe for its completion, otherwise the reservation is made in respect of all rights arising from the Contract and the law, such as forfeiture of letters of guarantee which have been provided.
Consequently issued were a) the no. 9008/13/216pn07 5.25.2010 decision of the Deputy Minister of Citizen Protection, with which the Claimant was declared in default as concerns the provision of training services on sub-systems 1-7 CDSS and the penalties referenced therein were imposed and b) the no. 7339-ζ'/5.25.2010 decision of partial termination of the Contract of same Deputy Minister."
The Arbitral Tribunal also considered the sworn statements of witnesses which were provided by the Respondent, namely: (1) the no. 7200/2011 sworn statement of Nakios Liberis dated November 30, 2011, before the Magistrate of Athens, (2) the no. 7196/2011 sworn statement of Dem. Ach. Rigogiannis dated November 30, 2011, before the Magistrate of Athens, (3) the no. 7199/2011 sworn statement of Georgios N. Syllaios dated November 30, 2011, before the Magistrate of Athens, (4) the no. 7198/2011 sworn statement of Dem. Panakoulias dated November 30, 2011, before the Magistrate of Athens, (5) the no. 7445/2011 sworn statement of Kon. Kardaras dated December 9, 2011, before the Magistrate of Athens, (6) the examination report of the witness Dem. Maravelis dated April 29, 2010, before the Appellate Associate Magistrate, (7) the no. 7201/2011 sworn statement of Ioannis Petropoulos dated November 30, 2011, before the Magistrate of Athens, (8) the no. 7202/2011 sworn statement of Pan. Anastopoulos dated November 30, 2011, before the Magistrate of Athens, and (9) the no. 7197/2011 sworn statement of Pan. Merti dated November 30, 2011, before the Magistrate of Athens.
« 1. The Arbitral Tribunal
The Arbitral Tribunal is composed of :
(a) Gregorios I. Timagenis, Attorney LL.M, Ph.D.
(President of the Arbitral Tribunal)
Notara Street 57, 8th floor
185 35 Piraeus
(b) Dionysios Kondylis, Honorable Areopagite (Co-
Arbitrator appointed by the Claimant)
Amaryllidos Street 23,
153 41 Ag. Paraskevi
(c) Styliani Charitaki, Legal Counsel of the State (Co-Arbitrator appointed by the Respondent) Karageorgis Servias Street 10,
101 84 Athens
Tel.: +30-210-3375190, 3375039 (secretary 210-3375221)
2. The Introductory Filings
The present arbitration began with the Request for Arbitration of the Claimant dated June 16, 2009, to which the Respondent responded with its Answer dated September 25, 2009, following an extension which was issued by the Registrar's office of the International Court of Arbitration of the ICC with its letter to the parties dated August 27, 2009.
3. Composition of the Arbitral Tribunal
The Arbitral Tribunal was composed as follows:
(a) On September 3, 2009 by virtue of Article 9(2) of the Arbitration Regulation of the ICC the Head Registrar of the International Court of Arbitration of the ICC certified the appointment of Mr. Dionysios Kondylis as co- Arbitrator, proposed by the Claimant Request for Arbitration dated June 16, 2009.
(b) On September 3, 2009 by virtue of Article 9(2) of the Arbitration Regulation of the ICC the Head Registrar of the International Court of the ICC certified the appointment of Ms. Styliani Charitaki, as co-Arbitrator, proposed by the Respondent with the document dated August 6, 2009 (Prot. No. 87774/457380).
(c) Because the two arbitrators, who were appointed by the contesting parties, did not agree on the appointment of the President of the Arbitral Tribunal, on November 26, 2009 the International Court of Arbitration of the ICC appointed Mr. Gregorios I. Timagenis, Doctor of Law, Attorney, President of the Arbitral Tribunal, following the proposal of the Greek committee of the ICC (Articles 8(4) and 9(3) of the Arbitration Regulation of the ICC)."
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION,
1710SAIC DRIVE, McLean, VA, 22102, United Stated of America
Its authorized attorneys are :
1. Mssrs. Allen B. Green and William T. O'Brien
McKenna Long & Aldridge LLP
1900 K Street NW
Washington, DC 20006-1108
United States of America
Tel: +1 202,496.7107 Fax: +1 202,496.7756
Email.: wobrien@ mckennalong.com and
2. Mr. Gregorios Pelecanos
Ballas, Pelecanos & Associates
Kolonaki 106 73 Athens
Tel: 210 3625943 Fax: 210 3647925
3. Mr. Epameinondas Labadarios
Labadarios and Associates
105 62, Athens
Tel: 210 3224047 Fax: 210 3226368
Email.: mailto: email@example.com
The Greek State, as legally represented by the Minister of Finance and the Minister of Citizen Protection Akadimias 68 106 78 Athens Greece
Tel: 210 3804971 Fax: 210 3328180
Its authorized attorneys are :
Mr. Demetrios Chanis (Legal Counsel of the State)
105 61 Athens, Greece
Tel: +30 210 3252977 and +30 210 3368747 / Fax: +30210 3231964
Mr. Demetrios Katopodis
(Associate Justice of the Council of State),
Ms. Georgia Papadaki
(Associate Justice of the Council of State),
Akadimias 3,106 71 Athens, Greece Tel: 210 3682541 /Fax: 210 3682221
(The Claimant and the Respondent are referred to hereinafter also as the "contesting parties").
(a) From the Claimant the Power of Attorney dated May 24, 2010 (in English with an official translation into Greek and Apostille dated 26 May 2010) which was signed by Lawrence E. Ruggiero, Vice President and Assistant General Legal Counsel, as legal representative of the Claimant before the notary of the State of Virginia of the USA Kaye Elliot Endahl, and
(b) From the Respondent the documents dated August 6, 2009 (ref. no. 87775/457380), December 11, 2009 (ref. no. 136444/457380) and June 17, 2010 (ref. no. 69270/457380) of the President of the Legal Council of State, as well as the decision dated July 14, 2010 (rf. no. 10107) of the Minister of Finance.
(a) Paragraph 14 of the Framework Document states:
14. Pre-trial matters
A separate discussion shall be conducted and a separate decision will be issued for the pre-trial matters. For the purposes of the present paragraph 14 (in other words regarding the separate discussion and decision) defined as pre-trial matters are those that are connected with:
(a) the following arguments of the Claimant:
(1) Inadmissibility of the Supplementary answers of the Respondent
(2) Inadmissibility of Opposition to offsetting both because it conceals an expired counter appeal and because of the non-payment of the ICC arbitration fees
(3) Separation of the examination of the substance of the matter into two (2) stages, in the first the acceptance or non-acceptance of the C4I System by the Respondent shall be judged.
(b) the following arguments of the Respondent:
(1) Request for Postponement of the proceeding, due to the instituting of criminal proceedings.
(2) Challenge of locus standi.
(3) Inadmissibility of the Request for Arbitration, due to an absence of pre-trial proceeding in writing.
(4) Invalidity of the arbitration clause and as such the lack of jurisdiction of the Arbitral Tribunal.
(b) The Arbitral Tribunal following a hearing proceeding on December 17, 2010 and having considered the written and oral claims of both parties and the evidence they placed at its disposal issued the "Decision on pre-trial Matters" (Interim Award) dated July 14, 2011 which was served to the parties on July 19, 2011 and with which it found admissible that it has jurisdiction to judge the disputes which arose between the parties from or in connection with Contract No.020A/03 dated May 19, 2003 for the Provision of C4I Olympics Security System and Services, in accordance with the arbitration clause of Article 28.3 of the Contract, which is valid, in accordance with Law. 2735/1999 and Articles 69 Par. 7, 71 Par. 1 and 73 Par. 1 of Presidential Decree 284/1989, and rejected all of the other pre-trial arguments of the contesting parties.
(c) The Arbitral Tribunal via its present final decision confirms all of the decisions contained in the above decision dated July 14, 2011 and deems them to be incorporated in the present decision without expressly repeating them excepting the decision on jurisdiction which it repeats verbatim below in Chapter C of the present decision.
Finally, during the hearing there was a cross examination (on Friday May 18, 2012) on the one hand of the witnesses Fotios Demopoulos and Konstantinos Kardaras (pp. 824 through 874 of the stenotyped minutes) and on the other hand of the witnesses Kemble Widmer and Demetrios Panakoulias (pp. 874 through 901 of the stenotyped minutes).
(a) During its meeting the Arbitral Tribunal decided in its majority that it has jurisdiction to rule on the disputes which arose from the contested contract between the contesting parties, based on the arbitration agreement (clause) contained in Article 28.3, which is valid and it rejected the opposition of the Respondent pursuant what is more specifically presented in the following paragraphs of the present Chapter D and the findings.
(b) The prevailing opinion as to the justification is presented in the following paragraphs, while the minority opinion and dissenting or supplemental justifications are presented in Chapter F below.
2. The arbitration clause (and applicable law)
The jurisdiction of the Arbitral Tribunal is established firstly in the arbitration agreement ("Arbitration clause") found in Article 28 Par. 3 of Contract No. 020A/03 for the Provision of a C4I Olympic Security System and Related Products and Service between the contesting parties dated May 19, 2003 and states that:
"Any claim or dispute which arises from or in connection with this CONTRACT or its interpretation shall be resolved irrevocably by arbitration, in accordance with the Rules of Arbitration of the International Chamber of Commerce - ICC and shall be adjudicated according to Greek Law. The arbitration shall be conducted in Athens, Greece, by three Greek arbitrators who are appointed pursuant to the Rules of the International Chamber of Commerce (ICC), where one Arbitrator is appointed by the PURCHASER, one Arbitrator is appointedby the SUPPLIER and the thirdArbitrator, who shall act as President, shall be appointed by the two appointed Arbitrators or, in the event of disagreement, in accordance with the aforementioned rules."
3. Challenge of jurisdiction / Authority of the Arbitral Tribunal to judge its jurisdiction
(a) The Respondent with its Supplementary answer dated April 20, 2010 and for the reasons referenced therein, asked that the invalidity of the arbitration clause be recognized and as a consequence the lack of jurisdiction of the Arbitral Tribunal, while moreover with paragraph 14 of the Framework Document dated July 21, 2010 it was agreed that for certain pre-trial matters, among which also is the invalidity of the arbitration clause, a separate discussion shall be held and a separate decision be issued. The Claimant sought the rejection of this request with its documents and briefs which are referenced above under A4 and 5.
(b) The Arbitral Tribunal has jurisdiction to deliberate on the matter of its jurisdiction in accordance with Article 6 paragraph 2 of the Rules of Arbitration of the International Court of Arbitration of the International Chamber of Commerce (ICC). Irrespective, however, of the related request of the Respondent, the Arbitral Tribunal is bound of its own accord to examine and to rule on its jurisdiction, before examining any other pre-trial matter or the substance of the dispute.
4. Applicable Law
Given that according to the arbitration clause as well as the Framework Document (paragraph 10) the place of arbitration is Athens, Greek law is applicable to the arbitration, including insofar as the validity of the arbitration agreement and the jurisdiction of the Arbitral Tribunal.
5. The Constitution of Greece
In accordance with paragraphs 1 and 2 of Article 94 of the Constitution of Greece (hereinafter the "Constitution") :
"1. Administrative differences fall under [the jurisdiction] of the Council of State and the regular administrative courts, as the law provides, with the exception of the responsibilities of the Supreme Court of Audit.
2. Civil disputes, as well as cases of voluntary jurisdiction, fall under [the jurisdiction] of the civil courts, as the law provides."
6. The legislative basis for the inclusion of civil disputes in arbitration of the Code of Civil Procedure
Based on these provisions it is clear that for a dispute, whether administrative or civil, to be excluded from the jurisdiction of the courts defined by the Constitution and for an agreement between the parties on this matter (an arbitration agreement) to be valid it is mandated that this be prescribed by law ("as the law provides"). For civil disputes which are subject to arbitration according to the Code of Civil Procedure (CCivP) it is consistently (and without contrary opinion) accepted that their subjection to arbitration is permitted based on the agreement of the parties pursuant to Article 867 of the Code of Civil Procedure and with its provisions. More specifically, when one of the contracting parties is the Greek State, the subjection to arbitration pursuant to the Code of Civil Procedure is based also on Article 49 Introduction of the Code of Civil Procedure and its provisions.
7. Decision 24/1993 of the Supreme Special Court of Greece for the remanding of administrative disputes to arbitration
(a) For administrative disputes however it has been questioned whether they can be remanded to arbitration (and consequently whether the related arbitration agreement is valid) even if this is provided for or permitted by law and more specifically the issue was raised whether such a law is unconstitutional.
(b) This matter was resolved with decision 24/1993 of the Supreme Special Court of Greece in favor of the opinion that in the true spirit of Article 94 Par. 1 of the Constitution, the lawmaker is not prohibited from allowing the inclusion of administrative disputes in arbitration with the agreement between the parties and the relevant law is not unconstitutional.
(c) Based on the above it is therefore accepted that administrative disputes can also be remanded to arbitration provided the law so permits. However, for administrative disputes there is no general provision which allows the inclusion in arbitration similar to Articles 867 of the Code of Civil Procedure and 49 Introduction of the Code of Civil Procedure and for this reason it is examined each time if there exists a law which permits the inclusion of the specific category of administrative disputes in arbitration because, if there is no legislative basis, the arbitration agreement is invalid as it directly contravenes the above provision of the Constitution.
8. The claims of the contesting parties
The Respondent has already raised the issue of invalidity of the arbitration clause with its Supplementary answer dated 4-20-2010 and it expanded on it more specifically with its briefs and statements which are referenced above (under A5) but also verbally during the hearing proceeding on December 17, 2010, while the Claimant raised objections both in respect of the timeliness and admissibility of the substance of the claim concerned, both with its letter dated 4.30.2010 as well as with its remaining letters, briefs and statements which are referenced above (under A4 and 5 respectively) and verbally during the hearing proceeding of December 17, 2010 and supported the validity of the arbitration agreement.
At this point particular reference is made to the Arbitral Tribunal's own investigation concerning its jurisdiction, while within the scope of this self initiated investigation the related claims of the contesting parties are also answered.
9. The Arbitral Tribunal's self initiated investigation
In light of the above the Arbitral Tribunal must investigate of its own accord during the review of its jurisdiction whether the dispute being presented before it is a civil or administrative dispute, and in the case of the latter whether a law exists which would permit the inclusion of the dispute for arbitration or if there is a legal basis which permits the inclusion of the dispute for arbitration regardless whether the dispute is civil or administrative. Specifically in regard to this latter issue, it must be examined whether Law. 2735/1999 for international commercial arbitration comprises a legal basis for the validity of the arbitration agreement contained in the contested contract, a matter which the Claimant also raised with its statement dated January 21, 2011.
10. Clarification of the interpretation of Article 1 of Law 2735/1999 and its subjection to the interpretation and other provisions
In this regard, the Arbitral Tribunal must rule first on whether there exist conditions for the application of Article 1 of Law 2735/1999 and more specifically whether the present arbitration is international and commercial under the definition of this provision. It is notable that in the adjudication of this matter there is no bearing on the matter of whether the dispute of the contesting parties is an administrative dispute or not and this is because the characterization of a dispute as administrative or not or its characterization as international or commercial or not, is made always in the context (Interpretation) of specific provisions in order to determine if they are truly fulfilled so that their legal consequences may be applicable. Thus, what constitutes an administrative dispute is judged as a rule in the scope of the interpretation of Article 1 Law 1406/1983 or of Article 94 paragraph 1 of the Constitution or possibly also other provisions which contain the term administrative dispute.
In the specific case the subject of interpretation is Article 1 of Law 2735/1999 which in actuality does not contain such a term (in other words "administrative dispute"), but the terms "international" and "commercial." Consequently a dispute which in accordance with other provisions is administrative, can be "international" or "commercial" in the scope of interpretation of Article 1 of Law 2735/1999, without this being contrary to the differing characterization of the same dispute in the scope of interpretation of other provisions. The independent interpretation of Article 1 of Law. 2735/1999 is supported also by the fact that in essence this law incorporates into the Greek legal system an international standard and more specifically the UNCITRAL Model Law on international commercial arbitration.
11. Regarding whether the nature of the arbitration is international or not
(1) In accordance with Article 1 of Law2735/1999oncommercialarbitration "the provisions of this law are applicable to international commercial arbitration, the location of which is in the Greek territory" (paragraph 1), "Arbitration is international when: a) the parties have, at the time of signing of the arbitration agreement, their headquarters in different countries..." (paragraph 2) and concerning the application of paragraph 2 "a) if one party has more than one headquarters, its main headquarters is deemed to be the one which has a closer relationship to the arbitration agreement, b) if a party does not have its own headquarters, its usual place of residence is taken into consideration and in the case of a legal entity the place where it maintains offices" (paragraph 3).
(2) Despite the stipulation of the law (use of the definite article "their headquarters" in Article 1 paragraph 2a) which refers to the true headquarters of a company, where its administration is conducted, as it arises from paragraph 3a of Article 1, the law allows for a business to have multiple headquarters, which are branches (special commercial residences) and not to the location of its central management where important business decisions are made (headquarters) which cannot be more than one.
(3) This arises also from the English model document where the term used is "place of business". This arises also from the prelaunch works of UNCITRAL for the Model law regarding international commercial arbitration (See Detailed Commentary on the draft of the Model Law regarding international commercial arbitration in the Report of the Secretary General at the 18th UNCITRAL Summit in Vienna, 3-21 June 1985 UN doc A/CN.9/264/March 25, 1985, hereinafter Model Law Commentary) where it is referenced that the Model Law does not refer to the principal place of business or to the head office, but to the branch through which a specific contract was assumed (See Model Law Commentary, under Article 1 Par. 26 and 27). This is also evident in the United Nations Convention on the International Sale of Goods (Vienna 1980, Law 2532/1997 Articles 1 and 10) the stipulation of which on this point was followed also by the Model Law regarding international commercial arbitration (See Model Law Commentary, under Article 1 Par. 24) and consequently the Convention on International sales can also be used to assist the interpretation, as well as its respective commentary by the Secretariat of the United Nations (See UN document A/CONF.97/5 hereinafter International Sales Commentary under articles 1 and 9 of the Draft now articles 1 and 10 of the Convention).
(4) Concurrently however the law provides that the location is taken into consideration at the time of signing of the arbitration agreement (Article 1 Par. 2a, Law 2735/1999) and if a business has more than one location, then the one that has a closer connection to the arbitration agreement is taken into consideration (Article 1 Par. 3a Law 2735/1999) and such a closer connection exists when the negotiation of the Contract occurred exclusively at one specific location regardless of where the contract was finally signed (Model Law Commentary, under Article 1 Par. 32, See also Article 1 Par. 2 of the Convention for international sales where it is referenced that if the location in one country is not mentioned in the contract or in earlier transactions of the parties or through prior information, then that location is not taken into consideration (See also Article 10 of the Convention on International Sale and International Sales Commentary, under Article 9 of the draft Par. 7 where it is referenced that fulfillment of the Contract at a later date at another location does not have as a consequence a change of the location which has a closer relationship with the agreement). Finally the law (Article 1 Par. 3b Law 2735/1999) also makes reference to where a legal entity maintains offices, which it considers to be a location. It is worth noting however that the UNCITRAL Model Law does not contain a relevant regulation, which [instead] refers only to customary location.
(5) In the case being adjudicated the contested contract no. 020A/03 dated May 19, 2003, as it arises from its text, was contracted between on the one hand the Hellenic Republic and on the other the company SAIC, which as is referenced in the Contract, has its central offices in the city of McLean of the State of Virginia of the USA. This contract however was signed on behalf of SAIC by the Senior Vice President Steven H. Weiss (via power of attorney) who does not have any established location in Greece. Concurrently no reference is made to a location of SAIC in Greece, to involve it any way with the negotiation and assumption of the Contract. The address Kifisias Avenue 90, Amarousio, Attica, which is referenced in Article 30 of the Contract for correspondence, even if it is the address of the headquarters of the Claimant in Greece at that time, is referenced for correspondence which shall be exchanged after the conclusion of the Contract (namely for the interpretation of the Contract Par. 30.2.1, for the execution of the Contract Par. 30.2.2 and for financial matters of the Contract Par. 30.2.2) and it is not evident that any location of the Claimant in Greece was involved in the negotiation and conclusion of the Contract, while the location which is taken into consideration at the time of signing of the contract and is more closely related to the agreement is the one at which the arbitration agreement was negotiated and concluded.
(6) Consequently the location of the Claimant which is evident from the Contract as being the location where the Contract was negotiated and concluded, which is not invalidated by other information, is the USA which is in a different country from the country of the headquarters of the Respondent and consequently the arbitration is international pursuant to the definition given in Article 1 of Law 2735/1999.
12. Regarding whether the nature of the arbitration is commercial or not
(1) Article 1 Par. 1 of Law 2735/1999 expressly states that the provisions of this law are applicable to international commercial arbitration.
(2) The law does not contain a definition of the term "commercial". However, in the Introductory Report of the law it is referenced, among other things, that:
"The same text of the model law, as drafted by UNCITRAL has in connection with the term "commercial" the following footnote which broadens its conceptual boundaries so that it be considered as "financial" :
"The term "commercial" is given a broad definition, so that it may cover matters which arise from every relationship of a commercial nature, contractual or not. Relationships of a commercial nature include- without being limited to - the following transactions : Every commercial transaction for the provision or exchange of goods or services, distribution agreement, commercial representation or agency, factoring, leasing, project construction, licensing, investment, financing, banking, insurance, licensing or assignment, joint venture and other forms of industrial or commercial collaboration, air sea, rail or road transport of goods and passengers". For legislative reasons this footnote has not been included in the text of the proposed legislation, as it was promoted to various countries in adoption of the model law as national law. However this does not preclude it from being an aid in interpretation of the scope of the term "commercial".
(3) Moreover, in commenting on Article 1, the Model Law Commentary references in this regard that the footnote to the term "commercial" was added as an aid to interpretation of said term (paragraph 16) and expresses the legislative intention that the term "commercial" be interpreted broadly (paragraph 18). Further, it is emphasized that this footnote guides the autonomous interpretation of the term "commercial," that the Model Law does not instruct on the characterization of a relationship as commercial in the national legislation of countries, as does the New York Convention of 1958 "for the recognition and execution of foreign arbitration decisions" (Law 4220/1961) in Article 1 paragraph 3 and that it would be a mistake for national views to be applied to the characterization of a relationship as commercial (paragraph 19). Finally, it is clarified that despite the fact that the Model Law does not reference the matter of state immunity, the Model Law also covers relationships in which a government body or a government entity are parties, under the condition of course that the relationship is of a commercial nature (paragraph 21).
(4) Moreover it has been historically emphasized that the term "international arbitration" without any other qualification, refers to arbitration of (public) international law particularly between states and consequently the addition of the term "commercial" distinguishes this arbitration from the arbitration of international law between states1 and although the involvement of trade is one indicator, this is not however primary as states may also participate in commercial arbitration within the framework of a commercial activity2.
(5) Furthermore, it has been emphasized that the definition of commercial is so broad that it encompasses in essence any financial dispute3 and with this definition of commercial disputes in which public entities participate and which originate from their international commercial transactions,mustbe included in the meaning of international commercial arbitration, since of ten the public nature of these entities does not influence the rules governing a contract or an international arbitration to which they are participants4.
(6) In this case the contested contract is a contract for the sale of goods and provision of services and the arbitration for the disputes arising from it clearly falls within the definition of commercial arbitration, as defined in Article 1 of Law 2735/1999 on international commercial arbitration, as this definition is clarified by the introductory report of the law, by the relevant footnote to the UNCITRAL Model Law and in the Model Law Commentary as above). This autonomous interpretation of the term "international commercial arbitration» in Law 2735/1999 is not influenced by, nor does it influence, any interpretation or characterization of this relationship in the scope of definition of any other law.
(7) Moreover and irrespective of the characterization and subjugation of the present arbitration to Article 1 of Law 2735/1999, at the time the arbitration agreement was concluded (and regardless of its admissibility or validity) but also during the negotiation and conclusion procedures of the supply Contract the Respondent was aware of the disputes that may arise from it as international [and] commercial and for this reason agreed to arbitration by the International Chamber of Commerce (ICC) in connection with which Article 1 paragraph 1 of the Rules of Arbitration defines that the function of the International Court of Arbitration of the ICC is the "the settlement by arbitration of business disputes of an international character."
(8) It is worth noting that the reference to disputes to arbitration according to the Rules of Arbitration of the ICC is included not only in said contested supply contract for the C4I Systems but also in the decision of the Ministry of National Defense which awarded the supply of the C4I Olympics Safety Systems (Φ600/AΠ 9092 Σ.16 May 13, 2003, paragraph 24). It is certain thus that this term was also a negotiated point since in the call for tenders for the provision of the C4I Olympics Safety Systems (Decision MINISTRY of NATIONAL DEFENSE Φ600/44139 Σ.23 September 6, 2002) while a provision is made for the resolution of differences through arbitration (paragraph 16) no reference is made to arbitration of the ICC something which was finally included in the award decision. Consequently these facts must also be taken into consideration in the search for the parties true intents both subjectively (Civil Code 173) as well as objectively (Civil Code 200), which leads to the conclusion that (and irrespective of the direct application of Article 1 of Law 2735/1999) and according to the understanding and intent of the parties the disputes which might possibly arise from the contested contract were commercial, subject to the present arbitration.
13. Law 2735/1999 as a legal basis for the lawful assumption of arbitration agreements
(1) In light of the above (under C11 and C12) the present arbitration comprises an international commercial arbitration according to the definition of Article 1 of Law 2735/1999 and is governed by the provisions of said law.
(2) The question however arises whether Law 2735/1999 forms a legal basis for the assumption of valid arbitration agreements, in other words ifit falls within the scope of the "law" as this term is used in paragraphs 1 and 2 of Article 94 of the Constitution ("as the law provides").
(3) Respectively, it must be noted that for private disputes no matter has arisen nor does it appear that any different opinion or question either in theory or in case law that Law 2735/1999 comprises the legal basis which is required by the Constitution (Article 94 Par. 2) for the removal of private disputes from the jurisdiction of the civil courts and their subjugation via agreement to arbitration. It is worth noting also that it is generally accepted without contradiction or challenge to the contrary that international commercial disputes which in accordance with other provisions (of national law) are characterized as private following the implementation of Law 2735/1999 (which is also newer than the Code of Civil Procedure and more specific since it references only certain private disputes, in other words international commercial ones, while Article 867 of the Code of Civil Procedure refers to all private disputes) are included hence in Law 2735/1999 and not in the Code of Civil Procedure. Consequently the legal basis for the validity of the relevant arbitration agreements is found in this law.
(4) Moreover it does not appear that the matter of whether Law 2735/1999 comprises a legal basis for subjugation to arbitration via agreement has yet been addressed in either the case law or in theory of disputes which under other provisions (such as Article 94 paragraph 1 of the constitution or Article 1 of Law 1406/1983) are characterized as administrative disputes but which at the same time and irrespective of this are included according to the above (under C 10-12) as international commercial [ones] in Article 1, and therefore fall within the scope of application of Law 2735/1999. However, for the sake of consistency, the same solution which was referenced above for private disputes must be given to this issue as well. Indeed, the stipulation of the first paragraph of Article 94 of the constitution which concern administrative disputes ("as the law provides") is identical to the stipulation of the second paragraph which concerns private disputes ("as the law provides") and for private disputes Law 2735/1999 is deemed without challenge and without contradictory opinions that it comprises as per Article 94 Par. 2 of the constitution legal basis for valid arbitration agreements. Consequently, also without challenge it must be accepted that the same law comprises the legal basis which is required by the identically stipulated Article 94 Par. 1 of the constitution for the conclusion of a valid arbitration agreement for this category of administrative disputes, in other words for those which concurrently fall also within the definition of international commercial disputes as per Article 1 of Law 2735/1999 (except those for which - as foreseen by Article 1 paragraph 4 of Law 2735/1999- there exist provisions of laws which specifically exclude them from arbitration, which does not appear to be the case for the contested dispute nor has either of the contesting parties claimed anything along these lines).
(5) The recognitionbyLaw2735/1999 of the arbitration agreement as reasons for removal from the civil courts and subjugation to arbitration of the disputes which fall under Article 1 of said law arises from the sum of its provisions, a prerequisite for which is the subjugation of the dispute to arbitration based on the agreement foreseen by Article 7 of the law but which is also expressly provided in Article 8 of said law (the "negative" result of the arbitration agreement, See also Model Law Commentary, under Article 8, Par. 1), which provides that when an arbitration agreement exists the court before which a suit is brought refers the case to arbitration (provided that the related application is submitted in a timely manner) while Article 9 provides that the arbitration agreement does not prevent the court from ordering protective measures, and consequently by disassociation it is concluded also from this provision that it prevents the adjudication of the essence of the dispute by the courts. Finally, same said Article 7 of Law 2735/1999 does not simply describe the term arbitration agreement but also contains the recognition of it as "the important legal document which comprises the basis and justification of an arbitration" (See also Model Law Commentary, under Article 7, Par. 1 and 2-4).
(6) However remanding to arbitration as per Article 1 Law 2735/1999 of international commercial transactions (in other words international provisions) and the Greek State, serves also the interests of the Greek State since if the possibility of a remand to internationally accepted arbitration did not exist many suppliers or providers of services from abroad would hesitate to participate in tenders or negotiations for contracts with the Greek state, which would deprive the Greek state from the capability of negotiating with more candidates and having more selections of better products and the chance of achieving better terms in its agreements.
(7) For this reason many provisions of Greek legislation make the conclusion of an arbitration agreement more desirable (and other terms of agreements by way of derogation restrictions applied to transactions of a purely domestic nature) in the international transactions of the Greek state. Indicatively we reference the exception from the restrictions Article 49 IntroN Code of Civil Procedure (in other words the existence of an opinion of the plenary of the legal council of state) in the case of international transactions (See Article 8 Par. 1 of Legislative Decree 736/1970 and An (Plen.) 8/1996 EMAvq 1996 p. 1052, EEN 1996 p. 32, ΕΝΔ 1996 p. 448, See also other such provisions below) under r14(13) (e) and Γ14(14)(e)).
(8) The fact that Law 2735/1999 does not make an express reference to administrative disputes cannot support the interpretation that said law does not include such disputes (with the argument that if it wished to include them it would contain a related provision), as Law 2735/1999 incorporates into Greek legislation the UNCITRAL Model Law, in other words an international text which could not refer to distinctions of Greek national legislation and which in fact consciously sought to distinguish the characterization of international commercial disputes from any characterization attributed to them based on the national legislation of any country (See also Model Law Commentary, under Article 1, Par. 19). However it also intended to include disputes with state entities (See also Model Law Commentary, under Article 1, Par. 21). Moreover Law 2735/1999 does not make reference either to private disputes but in spite of that the fact that private disputes are subject to it is not challenged. Finally, Law 2735/1999 - and through it the incorporation into Greek legislation of the UNCITRAL Model Law- cannot be interpreted (in other words questioning the intent of the legislator) with arguments derived from other laws such as Law 2717/1999 (Code of Administrative Procedure), which does not contain a provision for the possibility of subjugation of administrative disputes to arbitration such as the Code of Civil Procedure) in relation to which Law 2735/1999 is also newer and more specific, since as per the above analysis it concerns only one category of administrative disputes, namely those which concurrently comprise international commercial disputes in accordance with Article 1 of said law.
(9) In light of the above given that the present arbitration (irrespective of the characterization of the contested dispute according to other provisions) comprises an international commercial arbitration and that the dispute which is brought before [it] [is] an international commercial dispute [sic.], in accordance with Article 1 of Law 2735/1999, it is not necessary to examine whether the dispute brought before it is a private or an administrative dispute in accordance with paragraphs 1 and 2 of Article 94 of the constitution, since in either case it can be subjected to arbitration via agreement, hence the related arbitration agreement is valid and the legal basis for it consists of Law 2735/1999.
14. The validity of the arbitration agreement in accordance with Presidential DecreeΠΔ 284/1989
(1) Additionally the arbitration agreement (clause) contained in Article 28 of the contested Contract is valid in accordance also with Article 69 paragraph 7 of Presidential Decree 284/19895 for the procurement of the armed services, which was also in effect at the time of signing of the contested Contract (Presidential Decree 284/1989 was abolished by Article 71 of Law 3433/2006) and according to its provisions the contested contract was lawfully assumed.
(2) More specifically Article 1 of Presidential Decree 284/1989 states that: "The present Presidential Decree exclusively regulates the procedures for the supply construction works in provisions of services taking place in the interior and the exterior of the nation under the care of the Ministry of National Defense in execution of any of its needs".
(3) Moreover Article 1 Par. 1 of Law 2292/1995 on the organization and operation of the Ministry of National Defense states that: "National defense includes the sum of operations and activities developed by the state aimed at the protection of the national territory, national independence and sovereignty and the safety of the citizens against any external attack or threat, as well as in supportof national interests", while paragraph 3 of the same Article states that "the chief decision-making body for matters concerning exercising defense policy is the Government Council for Foreign Affairs and Defense (KYSEA)» and Article 3 of the same law (duties of KYSEA) states that KYSEA has the authority to approve "the major supply and production programs for defense means and materials" (element c') and to decide "on matters for the regulation of which the cooperation of more than one ministry is required" (element ιη').
(4) Concurrently Article 5 Par. 1 of Law 2833/2000 states that: "7. The security of the Olympic Games is the responsibility of the Greek police, at the headquarters of which is formed a special agency with the title "Olympic Games Security agency" for the central design and coordination of all those agencies involved in matters of security and order in the preparation and execution of the Olympic Games 2004", while paragraph 2 of the same Article states that: "2. For the execution of its mission the above agency cooperates with all those agencies involved i n the preparation and execution of the Olympic Games 2004. The subject and the manner of the cooperation and anything related thereto are regulated by joint decisions of the Minister of Public Order andthe Minister of Culture andother Ministers as the case may be".
(5) Finally Article 1 of Law 2800/2000 concerning the Ministry of Public Order (now ministry of Citizen protection), states that: "The Ministry of Public Order, within the scope of the constitution andlaws, has as a mission: a) the establishment and maintenance of civil order, b) the protection of public and state safety".
(6) From the above provisions it arises that the security of the Olympic Games was assigned pursuant to Article 5 of Law 2833/2000 to the Greek police and consequently it fell primarily under the jurisdiction of the Ministry of Public Order in accordance also with its organizational law. However, this assignment was not exclusive since from Article 5 of Law 2833/2000 (paragraphs 1 and 2) it arises that the proposed Olympic Games Security agency has the authority for "a nd coordination of all those agencies involved in matters of security and order» (Par. 1) and For the execution of its mission the above agency cooperates with all those agencies involved (Par. 2) among which undoubtedly also is the Ministry of National Defense since the safety of the citizens against any external attack or threat also falls under its duties (Article 1 Par. 1 Law 2292/1995) and security measures of the Olympic Games undoubtedly were aimed at the safety of the citizens from external attack during the Olympic Games.
(7) Consequently KYSEA as the qualified governmental agency for the regulation of matters which fall under the duties of the Ministry of National Defense and for which the cooperation of more than one ministry is required (Article 3 Par. 3 item. ιη' of Law 2292/1995) legally according to the authority of each (a) with its decision dated 1/1.23.2003 it authorized the MINISTRY of NATIONAL DEFENSE to directly negotiate with each participant in a previously unsuccessful procedure for the awarding of implementation of the C4I Olympics Security program in accordance with Presidential Decree 284/1989 by application of articles 6 Par. 2θ, 71 Par. 1b and 73 Par. 1b, 13 and 1ζ of same, which expressly references the decision but also in accordance with the provisions of articles 71 Par. Ιa and 1e, 73 Par. ΐη and 76 Par. 1 and 3, which do not reference the decision, the execution of which decision number Φ.600/9024/Σ3 of 1-29-2003 of the Minister of National Defense was issued with which the implementation of the programs approved (Par. 1b) and the program is characterized as "classified" and "urgent", (b) with its decision a no. 2 of 2-27-2003 it selected the joint venture SAIC Team, as the preferred contractor for the continuation of negotiations and (c) with its decision no. 1/3-13-2003 it decided to award the implementation of the C4I programmed to the joint venture SAIC Team, in the amount of 254,999,000 Euro.
(8) So qualified, the Minister of National Defense (based on the above decisions and the above laws) approved the awarding of C4I Olympics Security systems to the company Science Applications International Corporation (in other words the Claimant) with his decision Φ.600/ΑΠ.9092/Σ.16 of May 13, 2003 relevant to which 26 documents (α' - κστ') are listed which are referenced in the previous procedure, in paragraph 1 of the decision a series of provisions (α-ι) are listed also in Presidential Decree 284/1989 «regarding supply, construction, execution of works of the armed forces» (under η) and its authorizing law namely Legislative Decree. 721/1970 «on Financial Considerations and accounting of the armed services» (under α').
(9) And in light of all of the above there remains no doubt that the contested contract was the subject of a negotiation and was assumed in accordance with the provisions of Presidential Decree 284/1989 and that this occurred lawfully and according to the legal procedures as presented above.
(10) Moreover Article 69 (dispute resolution) of Presidential Decree 284/1989 in its paragraphs 1-6, defines an administrative procedure for the resolution of certain disputes particularly in connection with the receipt of provisions. Given that paragraph 7 states that: "Particularly for provisions of major importance, the resolution of disputes is determined by the related contract. In this case there will be a related provision within the specific terms of the relevant call for tenders," the question is raised whether this provision comprises a legal basis for the validity of the arbitration agreement (clause) included in Article 28 of the contested Contract.
(11) Regarding this matter it must first be emphasized that the letter of the provision of paragraph 7 of Article 69 Presidential Decree 284/1989 is clear («for provisions of major importance, the resolution of disputes is determined by the related contract ») and there is no doubt that the provision of the Olympics Security C4I System is a «provision of major importance», while the resolution of the disputes via arbitration is foreseen both by Article 16 of the 6 September 2002 invitation to express interest (MINISTRY of NATIONAL DEFENSE Decision Φ.600/44139/Σ.23 of Sep. 6, 2002, which was issued in execution of the 12-6-2002 decision of the Cross Ministerial Committee Coordinating Olympic Preparedness -ΔΕΣΟΠ, but also find its legal basis in the above referenced provisions for even a partial authority of the MINISTRY of NATIONAL DEFENSE) as well as a Article 24 of the approval decision of the provision (MINISTRY of NATIONAL DEFENSE Decision Φ.600/ΑΠ 9092/Σ.16 on May 13, 2003).
(12) The Respondent however claims that paragraph 7 of Article 69 of Presidential Decree 284/1989 does not authorize a legal basis for the valid assumption of an arbitration agreement (and consequently the arbitration clause contained in Article 28 of the contested Contract is invalid) because said paragraph must be interpreted narrowly due to its placement in Article 69 which (in its entirety) refers only to the administrative resolution of only certain disputes (particularly in connection with taking receipt of supplies) and consequently a different manner of dispute resolution may be foreseen for provisions of major importance, but always disputes similar to the dispute which are referenced in the previous paragraphs and which concern the receipt of supplies and always with an administrative procedure similar to that foreseen by the previous paragraphs of the same Article 69.
(13) (a) however, the customary interpretation, in other words interpretation based on the position of a provision, which the Respondent attempts despite that a certain cases it comprises an interpretive aid in the search for the meaning of a provision, does not suffice to justify a contradictory interpretation (particularly a provision which is so clear) unless it is combined also with other interpretive approaches and particularly a teleological one.
(b) Moreover even from a systematic view point one cannot disregard that paragraph 7 (in an Article with the title «dispute resolution») was found at the end of the article and obviously intended to clarify (so as to achieve different legal handling, in other words a different manner of dispute resolution) the provisions of major importance, and consequently the a contrario interpretation of paragraph 7 in connection with the previous one is what the legislator intended. Whether this different manner of dispute resolution (which is certainly what paragraph 7 intends to achieve) and which will be agreed upon in the Contract must be subject to certain restrictions (as to the type of disputes, namely regarding the receipt and for the administrative type of resolution) there do not appear to be convincing arguments based on a previous paragraphs.
(c) the fact that later (via Article 31 of Presidential Decree 189/1997) an eighth paragraph was added which concerns once again the dispute resolution committees (costs) it does not convince that paragraph 7 also concerns a similar procedure dispute resolution because on the one hand it does not change the fact that paragraph 7 very intentionally seeks to establish a different manner of dispute resolution for the provisions of major importance, in fact a manner to be agreed upon in the Contract and on the other hand the customary interpretation bears some weight of legislative principle while the addition of a paragraph with a subsequent law after paragraph 7 whereas it possibly should have been included before, can very well comprise a legislative defect.
(d) Moreover the historical interpretation (in other words what was provided by the earlier Presidential Decree 785/1978) may aid in the interpretation taking into consideration that Presidential Decree 284/1989 intended to precisely amend and supplement (and translate) Presidential Decree 785/1978. Indeed, Presidential Decree 785/78 in Article 69 paragraph 6 (in its last section which was respective to paragraph 7 of Article 69 Presidential Decree 284/1989) provided that: «More specifically for provisions of major importance from foreign companies, the Committee shall be constituted as provided in the relevant contract, and be entitled to examine also any dispute relating to the interpretation and execution of the Contract».
(e) From this provision (which is another example of a provision where the legislator favors arbitration for the state in international disputes) the objective is also clear (teleological interpretation) as is the purpose of the amended provision (in other words of paragraph 7 of Article 69 of Presidential Decree 284/1989) and the purpose of the modifications. Indeed it is clear that the last section of paragraph 6 of Presidential Decree 785/78 attempted, for provisions «of major importance» «from foreign companies» for the dispute resolution committee be composed not as foreseen by the Presidential Decree for the other provisions but «as foreseen by the relevant contract» (consequently in accordance with the contract it could also be composed for example as foreseen by the rules arbitration of the ICC) and it could «examine also any dispute relating to the interpretation and execution of the Contract» (in other words to have the breadth of a full arbitration such as that foreseen by Article 28 of the contested Contract).
(f) The reason for such a regulation is clear and is that which is referenced in paragraphs C13(6) and (7) above, namely for major procurements many foreign companies are not willing to accept dispute resolution from the committees of the Presidential Decree and/or the courts (something which in the final analysis worked against the Greek state since it limited its candidate suppliers and thus its capability to achieve good procurements under good terms) and for this reason Presidential Decree 785/78 permitted the committees to be composed in a manner which would be agreed upon and which would have the authority to resolve all disputes arising from the contract. The fact that the above regulation of Presidential Decree 785/1978 (in other words arbitration with the agreed upon committee composition for the resolution of all differences from the interpretation and execution of the Contract) is contained in the last section of paragraph 6 of Article 69 (the remainder of which concerns the administrative resolution of disputes regarding receipt) shows that the position of a provision (systematic interpretation) is a much smaller importance than its letter (literal interpretation) in connection with its purpose (teleological interpretation).
(g) with the amendment of Presidential Decree 284/1989, paragraph 7 of Article 69 in actuality broadened (clearly to the benefit of the Greek state) the previous regulation to firstly, apply to all provisions of major importance (in other words even if they are from foreign companies) and secondly that the agreement regulate not only the composition of committees but generally the manner of dispute resolution (in other words either by the regular courts or by arbitration) and in the event of arbitration the form of the Arbitral Tribunal and the entire procedure without the (new) paragraph 7 imposing any restriction as to the subject of the arbitration.
(h) In light of the above, for Presidential Decree 284/1989 (Article 69 Par. 7) to be interpreted a contrario to Presidential Decree 785/1978 (Article 69 Par. 6) and for the conclusion to be made that with the amendment of Presidential Decree 284/1989 the legislator, despite the clear letter of the provision, did not intend to broaden the previous regulation but rather to limit it so that provisions of a major importance cannot be subjected to arbitration for any dispute and with agreed upon dispute resolution bodies, does not serve any purpose as such an a contrario interpretation must not be accepted without being combined with a teleological interpretation as it leads to erroneous conclusions.
(i) In light of the above it is clear that the limitation of the clear letter and the spirit of paragraph 7 of Article 69 of Presidential Decree 284/1989 is not justified.
(14) (a) Given however that Presidential Decree 284/1989 is a Presidential Decree while forthe valid assumption of an arbitration agreement which transfers a dispute from the courts to arbitration, a law is required (in accordance with Article 94 Par. 1 and 2), that which remains to be investigated is the legislative authorization for Presidential Decree 284/1989 and particularly in connection with its capacity to allow the conclusion of an arbitration agreement for disputes which arise from contracts which are assumed via the procedures of Presidential Decree 284/1989.
(b) In this regard it must be noted that Presidential Decree 284/1989 was issued by authorization of paragraph 5 of Article 50 of Legislative Decree 721/1970. More specifically paragraph 5 provided among other things also the following:
"5. Through royal decrees, issued at the proposal of the Ministers of National Defense and Finance, the following are defined in each case of procurement, constructions and works, conducted in the interior of the nation and abroad under the branch of the armed services:"
"k. The procedure for conducting tenders, their awarding, submission and adjudication of appeals"
"v. The manner of inspection and receipt, rejection of procurement, arbitration, as well as the composition, purpose and functioning of central or regional committees for receipt, inspection and arbitration."
"υ. The specific terms and procedures for procurement originating abroad, by way of derogation of the regulations on provisions for the armed services"
« φ. The fees paid to the participating military, civil employees and persons outside the agency, to the committees conducting the tenders, advising, receipt and arbitration."
«ψ. Any other related provision and detail. »
(c) These provisions, via royal and now presidential decrees, provide authorization for the determination of "the manner... of arbitration" (item n) and make reference to remuneration of "persons outside the agency" participating "in committees arbitration" (item φ).
(d) Again, a contradictory interpretation of the term "arbitration "could not be supported with the justification that the historical and even more so neglectful legislator of Legislative Decree 721/1970 (and more specifically the authorizing provision of paragraph 5 of Article 50) did not give a broader authorization for the manner of arbitration but had in mind (and restricted its authorization) exclusively and only to the restrictive advisory arbitration of Article 16 of development law 654/1937 (Α162) in other words the text which had been legislated 33 years earlier and at a time when a binding arbitration agreement was very limitedly accepted even in private disputes, i.e. [it was only accepted] in commercial ones, (See Code of Civil Procedure namely Law 2/14 Apr. 1834 Apr. articles 106-110)6 and indeed the same authorizing provision (namely paragraph 5 of Article 50 of Legislative Decree 721/1970) has been used as a legal basis for arbitration in the last section of paragraphs 6 of Article 69 of Presidential Decree 785/1978 which concerned procurement from abroad and defined binding arbitration for all disputes arising from the Contract and the composition of arbitration committees based on the agreement of the parties which, as per the above, broadened Presidential Decree 284/1989.
(e) Independently of the above however via section υ of paragraph 5 of Article 50 of Legislative Decree 721/1970 authorization is granted for the regulation of specific terms and procedures «procurement originating abroad, by way of derogation from the regulations on provisions for the armed services» (and this is another provision which provides broader capabilities for the assumption of international contracts, including also arbitration [agreements] by way of derogation of the other provisions) while section ψ states that the issued orders may also foresee «any other related provision» including also an arbitration agreement as a related provision.
(f) In light of the above the legislative authorization for paragraph 7 of Article 69 of Presidential Decree 284/1989 (but also the legal basis for arbitration clauses) is found not only in sections n and f of paragraph 5 of Article 50 of Legislative Decree 721/1970 but also in sections υ and ψ of the same paragraph, which is further reinforced by the fact that the contested contract was concluded based on the special provisions of articles 71, 73 and 76 of Presidential Decree 284/1989 which permit "procurement without following the regular procedures" (Article 71 Par. 1) and with "the direct appointment of procurement without tenders" (Article 73 Par. 1) and without a restriction being placed as to the content of the related contracts, allowing also the arbitration agreement.
(g) In light of the above, paragraph 7 of Article 69 of Presidential Decree 284/1989 constitutes a legal basis for the assumption of a valid agreement for remand to arbitration of disputes which arise from contracts of major importance concluded in accordance with Presidential Decree 284/1989 and hence the arbitration clause which is contained in Article 28 of the contested Contract as well. A further legal basis for the permissibility of said arbitration agreement constitute also articles 71 Par. 1 and 73 Par. 1 which in the interest of the Greek state allow in certain instances (including the one being contested) the direct awarding of a procurement [contract] and without following regular procedures and without restrictions as to the content of the related contracts. Consequently the arbitration clause in Article 28 of the contested Contract is valid.
(h) Moreover, since the Respondent itself included an arbitration agreement both in the initial invitation to express interest as well as in the decision for the awarding of the provision and finally in the contested contract, it is obvious that it itself accepts that Article 69 Par. 7 and generally the provisions of Presidential Decree 284/1989 (in accordance with which the contract was assumed) permitted it to enter into a valid arbitration agreement and within the context of proper administration is not acceptable for it to attempt a different interpretation after the fact and to dispute the reasonable expectations of the other party who relied on the validity of the arbitration clause in Article 28 of the contested Contract, which according to the above was also the subject of negotiations.
15. The decision
In light of all of the above it must be accepted that the arbitration agreement contained in Article 28 of the contested Contract is valid and finds legal basis both in Law 2735/1999 as well as in Presidential Decree 284/1989 Article 69 Par. 7 but also in articles 71 Par. 1 and 73 Par. 1. Consequently, The Arbitral Tribunal has jurisdiction to adjudicate the disputes which arise from the contested contract rejecting claims to the contrary by the Respondent.
(b) Concurrently the Respondent maintains that this invalidity or otherwise ability to be invalidated, also affects the arbitration clause and for this reason the Arbitral Tribunal does not have jurisdiction over the contested dispute. Both the matter of invalidity, or otherwise capacity to be invalidated, of the Contract are examined below (in Chapter F, paragraphs 63-139) and it is accepted that there exists no instance of invalidity, or otherwise capacity to be invalidated, of the Contract and consequently there is no question of invalidity, or otherwise capacity to be invalidated, of the Arbitration clause for the same reasons.
(c) However, regardless of this, the arbitration agreement, even if it appears as a term (clause) in the main contract, comprises a separate and independent contract from the main (essential) agreement of the parties, and for it to be affected by reasons of invalidity, or the capacity to be invalidated, of the main Contract, this must be specifically justified.
(d) In this case however, even if the (main/ contested) Contract was invalid, or otherwise capable of being invalidated for the reasons claimed by the Respondent, this would not justify invalidity, or otherwise invalidation of the independent arbitration agreement, which is contained in the Arbitration clause (Article 28 of the Contract) and this because the agreement for remanding of disputes concerning the Contract to arbitration is already provided in Article 16 of the initial invitation dated September 16, 2002 to express interest (MINISTRY of NATIONAL DEFENSE decision Φ.600/44139/Σ.23 of Sep. 6, 2002, which was issued in execution of the June 12, 2002 decision of the Interministerial Coordination Committee Olympic Preparation-DESOP), in other words at a time when there existed no expression of interest by any Supplier candidate, in order for there to be an issue of corruption or fraud or a violation of law through intermediaries or other unlawfulness or immorality (the Respondent does not claim something to this effect, nor does this arise from any evidentiary fact). The arbitration agreement was repeated also in Article 24 of the decision awarding the provision (Ministry of National Defense decision Φ.600/ΑΠ 9092/Σ.16 of May 13, 2003).
(e) Furthermore, the remanding of disputes of contracts such as the contested one to arbitration, is not unusual, while the execution of the arbitration in accordance with the rules of the International Chamber of Commerce, which was added in term 24 of the award decision, constitutes an arbitration proceeding of high prestige, internationally recognized, and no one could claim (or does claim) that it was agreed as a result of corruption or that it had any causal link to corruption (even if the latter existed) or in violation of legislation regarding intermediaries, fraud or other unlawfulness or immorality.
(f) Further, the Arbitration clause which was finally included in Article 28 of the Contract, was not modified by any of the subsequent modifications of the Contract.
(g) Finally, Article 181 of the civil code, which provides that "the invalidity of part causes the invalidation of the entirety of the legal document, if it is concluded that it would not have been agreed without the invalid part» is not applicable to the contested arbitration agreement and this is because although it appears as a term of the Contract, the arbitration agreement is separate and independent of the Contract and not part of the main legal document, but also because of the nature and purpose of such clauses, as the contested one, is to resolve disputes arising from the main contract, including also its validity or invalidity.
(h) Consequently, the Arbitration clause was agreed to lawfully as per the above and is not subject to any form of invalidity, or otherwise capacity to be invalidated; it binds the contesting parties and constitutes the basis of jurisdiction of the Arbitral Tribunal and the claims of the Respondent to the contrary are rejected.
|Comman||1||Decision Support Subsystem|
|2||Common Desktop Subsystem|
|3||Design Preventive Investigation & Bombing Incident Response Operations Subsystem|
|4||Design and Management of Security of Dignitaries & Athletes Subsystem|
|5||Various administrative Subsystems|
|6||Fire Brigade Special Applications|
|7||Coast Guard Decision Support Subsystem|
|Commun||8||Management Center Subsystem (CIS)|
|10||Airborne Video Network Subsystem|
|12||Olympic Security Data Network|
|13||Study SUBJECT IAW Fire Brigade|
|14||Port Security System of the Coast Guard|
|15||Airborne Video of the Coast Guard|
|16||Automatic Vehicle Location (AVL) Subsystem|
|17||CCTV Network CCTV Traffic Control Subsystem|
|18||CCTV Network Olympic Village|
|19||CCTV Network Olympics Facilities|
|20||Digital Multichannel Radio System for Olympic Security|
|Command Control System (CCS)||21||ΟΣΚΑ|
|22Α||ΟΚΑ – Upgrade of GADA Facilities|
|23||ΟΠΚΑ ΟΑΚΑ Stadium|
|26||ΟΠΚΑ Olympic Village|
|27||Special Command Centers Fire Brigade|
|28||Special Command Centers Coast Guard|
|29||Greek Police Mobile Operations Unit|
|30||Mobile Operations Centers of the Fire Brigade|
Thus in accordance with Article 8 of the Codification of the Contract (as amended by Amendment 5 subsystems 8-12, 16, 17 and 18-30 were deemed as "As is" (but with additional testing and a later delivery date for Subsystem 17), while subsystems 1-7, 14 and 15 were the so called remaining subsystems.
However there was an agreed upon deadline for the delivery of the total project, which was 19 months following the signing of Amendment 5 (which occurred on March 29, 2007) namely October 29, 2008. More specifically term 9.1 provided for the delivery of the project within sixty-one (61) months after activation of the initial Contract, which was signed on May 19, 2003 and was activated on May 28, 2003. However, in Annex Β (which contains a timeframe of activities) reference is made to 65 months. In any event, the Claimant submitted on October 29, 2008 to the Respondent a summary statement of proper execution of the project, as resulting-according to the statement- from the testing of the subsystems and the final test, and this date did not constitute a matter of dispute between the parties.
(a) Article 2 of the ratified international convention states that: «Article 2: Definition of corruption
For the purposes of the present Contract "corruption" means the demand, offer, provision or acceptance, directly or indirectly, of a bribe or other improper benefit or promise of such benefit, which affects the proper execution of duties or a required behavior of the receiver of said a bribe or other improper benefit or promise of such benefit.»"
(b) Article 8 of the ratified international convention states that:
"Article 8: Validity of contracts
1. Each Party provides in its national legislation that a contract or clause of a contract the subject of which is an act of corruption is invalid.
2. Each Party provides in its national legislation that a contracting party whose statement ofintent was influenced by an act of corruption may ask the Court for the voiding of said contract, without prejudice to his right to compensation."
(c) The second Article of the ratifying law states that:
"Article Two: Compensation
Whomsoever damages another, because he committed or allowed an act of fraud in the sense of Article 2 of the Convention which was ratified by this law or neglected to take reasonable measures to prevent it, is obligated to rectify the damage and satisfy arguments referring to the moral defect according to the provisions regarding torts.»"
(d) The Fourth Article of the ratifying law states that:
"Article Four: Voiding of a legal document
1. Whomsoever makes a statement of intent which was influenced by an act of corruption, according to the definition of the present law, has a right to invalidate the legal instrument according to the provisions of Articles 154 through 157 of the Civil Code. if the statement is directed towards another, who did not participate in the act of corruption, voiding may be requested provided only that the party to whom the statement is directed or a third party who directly acquired the right from it knew or was obligated to know of the act of corruption.
2. The party who has the right to void the legal instrument due to an act of corruption also has the right, concurrently with the voiding of the legal instrument, to request restitution of every other damage, in accordance with Article Two of these presents or to accept the legal instrument and request only the restitution of the damage."
(a) Article 147 of the Civil Code
"Whomsoever is misled by fraud to a statement of intent has the right to request the voiding of the legal instrument. if the statement is directed towards another and the fraud was committed by a third party, voiding may be requested provided only that the party to whom the statement is directed or a third party who acquired the direct right from it knew or was obligated to know of the fraud. "
(b) Article 149 of the Civil Code
"The party who was defrauded has the right, concurrently with the voiding of the legal instrument, to request restitution of every other damage, in accordance with provisions regarding torts. They also have the right to accept the legal instrument and request only the restitution of the damage."
(a) Article 174 of the Civil Code
"A legal instrument which contradicts a prohibitory provision of the law, unless there is another condition, is invalid."
(b) Article 178 of the Civil Code
"A legal instrument which contradicts commonly applied principles is invalid."
(c) Article 179 of the Civil Code
"A legal instrument is invalid for being contrary to fair practices is one by which the freedom of the person is excessively bound or the legal instrument by which someone abuses the need, the inanity or inexperience of the other and thus succeeds to subscribe or obtain for itself or a third party some provision, assets which, under the circumstances, are found to be in obvious disproportion to the provision."
(a) Article 1
"1. The following are invalid or contrary to fair practices and shall produce no legal effects - a ~) Any agreement where either of the parties instead of a prescribed fee or percentage or any other consideration assumes, in any manner, succeeds or subscribes with a Public or Municipal or Community or State corporation or individual or other legal entity of public law a contract of any subject or content, or regardless of any contract causes any act or omission of such persons or their employees or bodies in general. The same applies if the assumption is done on assignment of the whole or part of the contract. -b) Any agreement where either of the parties is an employee or representative or body of the State or the above legal entities or member of the board of Public agencies or the above legal entities or holds elected office where the contract concerns the provision of a certain fee or percentages of the Contract or other consideration, either for the disposal of their vote, or for the exercising of their jurisdiction provided by law on the assumption of contracts in section a or for some of its terms, or in exercising their capacity or relationship towards the Government or the effecting of influence on the successful outcome of said goals, or also by any assumed or provided services from them in relation to the contract or the instrument or omission. Also invalid is any agreement, where the contractor of the Contract according to section a prior to its assumption assigns or assumes the right to assign to a third party subcontractor all or part of the projects, -c) Any contract where either of the parties promises a certain fee or percentage of said Contract or any consideration, as well as any such provision aimed at the removal of competitors or in general persons capable of making an offer or to cancel or hinder the assumption of the Contract. - 2. Also invalid is any after the fact payment, provision or promise to provide for the purposes of the above paragraphs (a-c). "
(b) Article 3
"Invalidity as per Article 1 is unimpaired and if for the masking of the agreements contained therein any fictitiousness took place or documents were drafted containing untrue facts or on the basis of such agreements or induced decision or following confession, recognition or compromise. For proving such instances the means of witnesses is also always allowed."
(c) Article 4
"1. if the obligations or promises of provisions of the contractor towards third parties are invalid, so shall be the fees according to the contract with the State or legal entity or percentages of the contractor or in their absence in general any consideration of the Contract. -2. Any amounts according to any contracts voided as per Article 1 are sought and due to the State treasury or relevant entity."
(d) Article 5
"Whenever an agreement made in accordance with Article 1, if the contract subscribed to with the State or the legal entities of said article is due primarily or was the result of a vote or action of parties section C of Article 1 or the action of influence of persons of section a or the removal of persons of section c, the court, at the request of the State or legal entity, may rule all or part of the contract invalid."
The Respondent does not expressly refer to Article 5 but the referenced facts and the claim are directly subject to this provision.
The voiding of a legal instrument due to delusion, fraud or threat is arrived at via judicial decision. Only the party who was deluded or defrauded or threatened and its successors have the right to request the voiding.
Suit for voiding
The suit for voiding is directed against the other contracting party, in the case of a single party legal instrument, it is directed against the party who directly derives a legal interest from it.
Prescription of the right to void
The waiver of the holder of the right causes the lapse of the right to voiding. It is not necessary for the waiver, whether explicit or silent, to be directed towards another party.
When two years have passed from the legal instrument the right to void no longer applies. if the delusion or fraud or threat continued even after the legal instrument, the two year period begins from the time this situation ceased. Under no circumstance is voiding permitted after twenty years from the legal instrument have passed."
"Nonetheless, first of all, the Management of Siemens wishes to express its deepest regret towards the Greek People, the Parliament of Greece and the Government of the Hellenic Republic for its actions which had as a result a judicial and parliamentary investigation and consequently the instituting of criminal proceedings by the Greek Justice Department." This statement however, though it clearly refers to improper behavior, does not constitute, according to the majority decision (of the President and the Arbitrator Dion. Kondylis), a confession of bribery and in any event cannot be used as a fact which proves bribery or other corruption in the specific case of the assumption of the Contract for the C4I or its fulfillment.
"I would like to emphasize that here there is a great misunderstanding on your part:
Whenever we officially included the C4I project in any of the contracts of [companies handled by] Floriani, this did not ever directly concern the making of payments for bribes, but indirectly the raising of funds for the general slush funds.
The C41 project was, if I remember correctly, valued at 150 million Euro and for this reason we used this project as the so called "fictitious project" (Dummy). This is why we created dummy contracts for many and various reasons. The C41 project was a nice title and outwardly it was reasonable and justified, that in connection with this project consulting services had to be paid. All that you find in connection with this matter are simply fabrications." (p. 18 of the Greek translation)
However, even if these funds were moved to Fairways, the time of their payment disassociates them from the conclusion of the Contract one yearearlier and despite the fact that it is not sufficiently clear whether these funds arrived at Fairways they were moved through Krhoma or through Weaving (and from which transfers to Weaving) it is certain from the testimonies of Siekaczek, namely that the total amount which was transferred to Fairways (to the account indicated by Christoforakos) was 1.7 million Euro (in some instances he says 1.3 or 1.5) and neither did Christoforakos ask of him to nor did he send other funds to another account and consequently this amount coincides with the one which was allegedly given to the two political parties. Therefore, the German justice system duly convicted R. Siekaczek for breach of trust, this however does not mean that these funds were moved for the C4I project. To the contrary, from the above testimony it arises that as a rule and in all likelihood even in this instance they did not concern the project which was listed in the dummy contracts for consulting services.
I asked Mr. Christoforakos, what the funds were really for in Munich, the funds, in other words, which were transferred to the company Pacific Blue. Mr. Christoforakos toldme, that they were used in the cultivation of relationships with the political parties, in other words PASOK and New Democracy, the two large parties.
Yes, it is possible some ministers were entertained by Siemens and Siemens may have assumed in part also their lodging expenses. I do not know the names of the ministers however.
I would truly tell you the names, if I knew them.
Mr. Christoforakos however never mentioned anything, other that the statement, that the funds were used for the cultivation of relationships with the political parties. Mr. Mavridis and Mr. Christoforakos behaved in connection with this matter very collusively." (p. 12 Of the Greek translation)
In connection with the non existence of full proof reference is made also to the additional justifications of Arbitrator Mr. Dion. Kondylis.
However, since this defense is based on the same claims and evidence concerning the invalidity of the Contract due to corruption, which were rejected above as unproven, this plea must also be rejected and it must be accepted that the exercising of the right to request arbitration as well as seeking the rights exercised through it, is not contrary to fair practices nor does it exceed the limits of the social and financial purpose of the right and hence does not contradict Article 281 of the Civil Code nor does it constitute an abuse of rights.
(a) the payment of the remaining price which has not been disputed by the QQRP namely Euro 13,741,011 plus interest and the VAT which is due on the total price namely Euro 25,093,423 (Claim 1),
(b) the payment of the portion of the contractual price which was withheld based on the observations in the QQRP, which according to the claims of the Claimant are unfounded namely Euro 21,466,551 plus interest (Claim 2), and
(c) the amounts of the down payment and good performance letters of guarantee whose forfeiture the Respondent unlawfully and in violation of the contract sought, namely Euro 3,106,766 and Euro 15,770,610 respectively along with their (later determined) expenses namely Euro 128,744 and Euro 124,609 respectively (Claims 3 and 4).
(a) "in the event of rejection of part or all the goods being received or their receipt with a reduction of the contractual price and if the supplier does not agree with the decision of the inspection and receipt committee, he is entitled to request, within 5 days from the date of the protocol of rejection or acceptance with discounted price, the referral of the matter to a dispute resolution committee. The above request is filed in writing to the body that is competent for the procurement.» (paragraph 1), and
(b) "In the event of a disagreement of the members of the inspection and receipt committee for the acceptance or rejection of part or the total of the goods or acceptance with a reduction in the contractual price, he who has the financial power or jurisdiction makes the final decision.
In the case of this paragraph the agency may make an automatic referral to a dispute Resolution Committee, which is obligated to issue the related protocol within 1 month from the referral." (paragraph 2).
e. The sole rejecting Protocol which uses the stronger recommendation phrase ("must be rejected") is Protocol 2004-00/6/2-κβ of 6-6-2007, which concerns Subsystem 16 (AVL), while however it was also clear that the parties deemed it to be recommendatory (in accordance with Article 19 Par. 2c of Presidential Decree 284/1989) and not final and for this reason the Claimant did not appeal to the Dispute Resolution Committee (as per Article 69 Par. 1 of Presidential Decree 284/1989), while the PC&DC (obviously also considering the Protocol of 6-6-2007 as non final, amended it and proposed the receipt of Subsystem 16 (AVL) with discrepancies in the scope of the QQRP of 11-14-2008.
'In the event that, in spite of the above, resolution of the reasons which cause the as above rejection of ACCEPTANCE of the contractual product is not possible, provided that the deviation of the contractual goods from the technical specification is such that it does not render the goods unsuitable for their intended use, the BUYER shall proceed with the acceptance of the SUBSYSTEM with discrepancies/ deficiencies and respective to these reduction in the contractual price, according to the procedure prescribed by law."
The consequent procedure prescribed by law is described above under 5 (paragraphs 152-157) in accordance with which and in accordance with paragraph 5 of Article 68 the Quantitative and Qualitative Receipt Protocols are not binding but recommendatory with respect to the reduction in the price when the receipt is made with (non essential) omissions and deviations. And while via the Contract the PC&DC was appointed representative of the Respondent for the oversight and receipt of the project and consequently the issuance of the QQRP is mandatory for the Respondent with respect to receipt (even with deficiencies or discrepancies). However there is no term of the Contract, which renders the opinion of the PC&DC regarding the amount of the valuation of the omissions and deviations also binding, but as is presented above from the terms of the Contract it arises that both parties can challenge the valuation of the deficiencies or discrepancies.
"The state bears no responsibility and the supplier, provided the dispute was referred to the Dispute Resolution Committee, has no right to seek from it any compensation for any possible damage it suffered during the interim until the issuance of the final Decision." From this provision which is not contradicted by any term in the Contract but to the contrary is supported by the combination of terms 8.8 and 9.1.5 of same, it arises that the Supplier and in the present case the Claimant are not entitled to interest or other compensation for possible damages suffered during the interim until the issuance of the final decision.
In light of the above the general challenge of the Respondent as to the height of the reductions is examined in connection with the defense of offsetting due to lack of interoperability (See below under 02) while the rest of its more specific objections are examined in the scope of the remaining claims of offsetting. The specific objections of the Claimant as to the height of the reductions proposed by the QQRP are examined in the present chapter directly below (excepting the exclusion of Subsystem 20) in connection with the non installation of a second switching center which is examined below under 03).
Specifically, the Claimant specifically questions the following amounts of the omissions/deviations indicated in the QQRP:
For the same Subsystem (No. 20, TETRA) the Claimant claims that the PC&DC erroneously decided that the training of 20 trainers/managers was not provided and imposed a price reduction by 60,000 Euro. The allegation (and the relevant request) is inadmissible because as stated, the Claimant can't dispute the existence of omissions/deviations found by the PC&DC, as they do in this case. In any case, it is not proven that said training was provided. The relevant witness testimony of the Claimant K.Widmer (stenotyped minutes page 659) is quite vague. It does not mention any specific elements, does not indicate what specific time (from when to when), at which particular site, from which trainers and to which trainees was training provided. Therefore said claim must be rejected.
The good performance letter of guarantee will be drawn down as follows: a In the amount of 15,270,610 Euro, which represents 10% of the value of the CONTRACT, amount 157,706,100 Euro, within thirty (30) days from the date of the Qualitative and Quantitative receipt of SYSTEM C41, provided the receipt of the SYSTEM is completed without any omissions or deviations or if omissions/deviations are recorded, in the Protocol of Qualitative and Quantitative receipt of the SUBSYSTEMS and the C4I SYSTEM C41 within 10 days of the Parties' agreement as to the value thereof or the settlement between them through negotiations, as defined in Article 8.8. if no agreement is reached by the parties as to the value of the omissions/deviations within the deadline set forth in Article 8.8, the drawdown of the good performance letter of guarantee in the aforementioned amounts of 15,770,610 Euro will occur on the condition that the amount of any outstanding payments of the purchase price by the BUYER to the SUPPLIER exceeds the value of any Subsystems / System C4I not received and the price reduction, calculated by the Buyer, which corresponds to the omissions/deviations recorded by the latter in regard to the received Subsystems / System C41. Otherwise the letter of guarantee will be reduced by such an amount so that its balance that will remain with the BUYER will cover its aforementioned requirements.
11.3. The down payment letters of guarantee, upon receipt of each of the subsystems of the C4I SYSTEM, as provided in Article 8 above, will be reduced by the amount corresponding to the contractual value of each of the received Subsystems, minus the amounts attributable to deductions due to any omissions or deviations recorded, and to the tested interoperability of the C4I SYSTEM when it is interfaced with other Subsystems during its General Acceptance Test. The reduction of the letters of guarantee under the aforementioned conditions may take place by replacing them with letters of guarantee of other amounts, equal to the balance of the deposited letter of guarantee, as this will be determined each time upon the receipt of each of the Subsystems, as described above or with a relevant modification of their amounts according to the relevant banking practice.
"40.4. Itis clarifiedthatanyservice or task which hasnotbeen adequately described herein, or any material, although absolutely necessary, not included in the parts list or any additional amount required to complete the supply based on the SPECIFICATIONS for delivery of the C4I SYSTEM as a "TURNKEY" solution will be provided by the SUPPLIER at no additional cost to the BUYER."
Moreover this was also the commercial understanding of the parties as testified at the hearing by witness John Hartley (page 811 of the stenotyped minutes).
The burden of the invocation, that is, the "methodology" and "criteria" under which the penalties were imposed and their amounts determined, lies with the Respondent. Therefore, the allegation of vagueness on the basis of the claim is rejected because it is based on a false condition. At any rate, the allegation on lack of jurisdiction of the Arbitration Tribunal is also rejected for two reasons: a) The resolution of the Dispute Resolution Committee of no. 69 §§ 1-3 of presidential decree 284/1989 is not an arbitration ruling and not does not create a res judicata. Therefore it is challenged before a court with jurisdiction (nor could the law determine otherwise, article 20 of the Constitution), and since the parties have validly agreed a resolution of their disputes by arbitration, such court is the Arbitration Tribunal, excluding State jurisdiction. Also, the Arbitration Tribunal has full jurisdiction, as the state court would, according to the case laws of the ECtHR, and may try all the legal and factual issues of the case without being bound by whatever the management has accepted (see ECtHR decisions Le Compte, Van Leuven De Meyere vs. Belgium of 6-23-1981, A. No. 43 par. 61, Albert and Le Compte v. Belgium 10-2-1983 of A. No. 58 par. 29, Beaumartin v. France on 11-24-1994 A. No. 296-13 par. 38, Koskinas v. Greece, 6-20-2002, par. 27-29, Bryan v. United Kingdom, 11-22-1995, par. 44 et seq. etc.). b) The resolution of the Dispute Settlement Committee of article 69 of Presidential Decree 284/1989 which the Respondent invoked does not concern the disputed penalty clauses. It concerns only the acceptance of subsystem 20, which was rejected by the competent ECtHR, with the Rejection Protocol dated 5-25-2007 No. 2004-00/6/2-a. That is, the subject introduced by the aforementioned claim before the Arbitral Tribunal is different from the subject on which the Dispute Resolution Committee reached its resolution.
for the System been provided by then, the logical thing would be to state this in Amendment 7, that is, to indicate that after the receipt of C4I, "training of CDSS users" will be provided and not generally of the "CDSS subsystems 1-7," a phrase which is reasonably included in the conceptual content and the System administrators' training. It is also proven that the PC&DC with its documents dated 23-1-2009 and 3-5-2009 to the Claimant, requested that training be provided to a limited number of persons, i.e. a total of 20 people from all providers to systems Oracle Admin, CCNP, Windows server 2003, Linux, redhat, breamweaver and CISCO. This training, as it turns out, was not provided, not because the Claimant had provided it previously (they do not even claim that), but because they claimed it was outside of its contractual obligations (see the document dated 18-3-2009 by the Claimant and the testimony of witness Con. Vantalis, SP pages 333, 335: ".. they wanted us to train some users at IT level... they asked for these additional courses that were not included in the Contract, in order to be able to perform administration and maintenance... while in the Contract... it was clear that we would provide immediate correction of malfunction... These courses were Oracle, Sisco etc... "). That is, the training of the system administrators requested by the PC&DC, was not provided because the parties disagreed and still disagree as to the content and purpose that the administrators' training would have pursuant to the Contract: The Claimant maintained and continues to maintain that they should have been provided only with the training and know-how that would make them able to directly address System failures. By contrast, the Respondent argues that the administrators should, after the end of the training, be able to "autonomously" maintain, manage and configure the system.
However, at the hearing, it initially appeared that the viewpoint put forth would be that the training of the administrators would be completed during the 5-year maintenance of the System by the Claimant (see witness P. Anastopoulos by Ep. Lampadario and his observations) (stenotyped minutes pp. 392 and 393), something which is obviously not correct though, since Annex D of the Contract, after the 7th Amendment, provides (in paragraph 7) a twelve month schedule for training and apparently the Claimant issued a "successful completion protocol" in order for the payment to be made under the terms of the Contract (after the 7th Amendment) 10.3.2 and 10.1.2.3 (and the rejection QQRP dated October 27, 2009 was subsequently issued). However, after that, (testimony of Widmer pp 662 et seq., stenotyped minutes and Supplementary Briefs of July 30, 2012, par. 853-889), the Claimant takes the view that the system administration managers and the technology transfer took place prior to the delivery of the System during the phase of detailed configuration and system analysis up to its installation, and for the period after the receipt, only the training of "power users" and "end users" remained, in accordance with Annex D (see paragraphs 863 and 873 of the Supplemental Briefs of the Claimant dated July 30, 2012). However, this does not seem convincing because neither the 7th Amendment nor Annex D make such a distinction (in paragraph 1) to "users, administrators and technicians." Furthermore, on one hand, the aforementioned allegation of the Claimant (in their Supplementary Briefs dated July 30, 2013) contradicts the assertion in its Briefs (dated December 16, 2011) that the Respondent did not have (prior to the receipt) the necessary staff, therefore training was postponed, and on the other hand the hearing did not show that administrators under training were monitoring the phase of detailed customization and analysis or any later stage (and this regardless of the multiple problems that existed in these phases). Furthermore, Amendment 7 (as stated above) makes no mention of training already offered nor any distinction between the training of administrators and users. However, if the Claimant's assertion that Annex D (which the Claimant initially invoked as the one including all contractual obligations for training) concerns only users (dynamic and end) and not the administrators (see Supplementary Briefs par. 863 and 873) then it is concluded for the administrators that no training was provided and that this is the reason to reject training with QQRP 2004-00/6/2-rkv of October 27, 2009.
(a) Since "the Respondent's conduct throughout the duration of the contract to this day... has been found to be illegal, abusive, in bad faith and dilatory - has caused an enormous damage and harmed the reputation, good faith and business prospects of SAIC," (paragraph 284)
(b) "The enormous delay of the Respondent in fulfilling their obligations throughout the Contract period, starting from the delay in the completion and delivery of the Olympic facilities up to the continuous violations of every deadline set forth to ensure the smooth and timely completion of the Project, forced SAIC to maintain offices and a large staff in Greece, well beyond those specified in the time conventions, with a necessary implication being the enormous and unexpected increase of its cost." (paragraph 285)
(c) "Additionally, the well-known to us and continuous, for reasons of political feasibility and just "badmouthing" of the C4I system as supposedly "useless", "expensive", "scandalous", etc., both through the media and by statements of politicians in and out of Parliament - at the same time that the competent committees of the Respondent considered it suitable and acceptable - exacerbated the losses of SAIC in international markets II" (paragraph 286)
(d) "As a culmination to all this, the unthinkable action of the Respondent was taken, that is, to terminate 19 months after partial performance of the Contract, and to declare SAIC in breach of contract and to collect the letters of guarantee."(paragraph 287)
4. The Respondent, primarily with their Addendum dated March 16, 2012 (pages 148-186) refutes the contribution of the conditions of the tort and the legal basis of the aforementioned claim that is invoked by the Claimant. They also support that no conditions of articles 57 and 59 of the Civil Code are met, that the breach of contract is not a tort, that no causal link exists, because the actions of his assignees were not sufficient to cause the alleged injuries, that no injuries were suffered and that their reputation was nonexistent due to the CITYTIME scandal of New York City. The Respondent does not claim lack of jurisdiction of the Arbitration Tribunal. In any case there is jurisdiction because according to the events that were invoked, the alleged tort attributable to the Respondent on which the claim for monetary compensation is based, was caused by the abnormal progress of the Contract at issue and its consequences are exactly due to this abnormal progress.
10.4. "The payments to the Supplier specified above will be made by bank transfer directly to the bank account designated in writing by the Supplier within 30 days of delivery with return receipt of the above documents to the office of the Buyer set out in Article 30, CORRESPONDENCE."
10.5. "If a payment has not been received by the Supplier by the specified date at the fault of the Buyer, legal interest will be imposed that will burden the Buyer."
Article 21 of the Code of State Trial Laws states:
"The legal and the default interest on any government debt is 6% per annum, unless otherwise defined by agreement or special law. Said interest shall commence upon the service of the complaint."
Article 2. Scope:
"The provisions of this decree apply to payments made as remuneration from a commercial transaction."
Article 3. Definitions. For the purposes of this Decree:
"1. "Commercial Transaction" means a transaction between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration. "Public authority" means any contracting authority or entity, as defined in the presidential decrees on procurements of the public sector (presidential decree 370/1995 Gazette A 199).....2. "Late payment" means exceeding the contractual or statutory period for payment..... 3. "Interest rate set by the European Central Bank for the basic refinancing operations means the interest rate applied to such operations in fixed-rate bids."
Article 4. Interest in case of late payment:
"7. Overdue interest from the day following the payment date or the end of the period for the payment as set forth in the contract. 2. Unless a certain day or period for payment of the fee was agreed, the borrower is in default without requiring notice and owes interest: a. if they received the invoice or equivalent for payment documentation.... 4. The rate of overdue interest which the debtor is obliged to pay, shall be calculated on the basis of the interest rate applied by the European Central Bank to its most recent main refinancing operation carried out before the first calendar day of the half-year in question ("the reference rate"), plus at least seven percentage points ("the margin"), unless otherwise specified in the contract.
This allegation, however, is not in line with the abovementioned clause 10.5 of the Contract which provides that in case of culpable delay, the legal overdue interest will be imposed, which is "borne by the Buyer." That is, not the general overdue legal interest in Greece, but the one "borne by the Buyer" which is 6%, according to the abovementioned provision of Article 21 of the Code of State Trial Laws (see also Decision 25/2012 of the Supreme Special Court). Further, although under presidential decree 166/2003 the amount of overdue interest shall be set equal to the reference rate of the ECB plus a margin of 7% per year, that is exceeding 6%, this provision is subject to that it is not otherwise specified in the contract. In this case it is not otherwise specified in the Contract, that is, it is set forth that the legal overdue interest will be the one borne by the Buyer, therefore 6%, according to Article 21 of Code of State Trial Laws. Moreover, the provision of this latter article, that the State owes overdue interest only from the service of the complaint, is contrary to the provisions of Directive 2000/35 of the EU, cited above, as verbatim included in presidential decree 166/2003. Although article 9 of said presidential decree provides that its provisions do not apply to contracts that had been previously developed, this concerns only the horizontal and not the vertical application of the Directive. Indeed, according to Article 6 par. 1 of the Directive, Member States had to adopt legislation transposing into national law no later than 8-8-2002. Thus, from this date, this Directive became effective as of right against the public body (vertical application), since the Directive's provisions are clear and they are not conditional, and as stated by the ECJ in its judgment of 5-24-2012 (Case C -97/11, Amia SpA v Provincia Regionale di Palermo). Therefore, the allegation of the Respondent to the contrary is not legitimate. Similarly, its other allegation is also not legitimate, that is, that the Directive applies only to those contracts that fall within the scope of Directive 93/36/EC, which is transposed into national law by presidential decree 370/1995 on public sector procurements. Directive 2005/35 refers to the provisions of this Directive (i.e. Directive 93/36, and also the provisions of Directives 92/50 EEC, 93/37 EEC and 93/38 EEC) (with Article 2 par1) only insofar as the definition of "public authority," not to the extent of its scope. Therefore, if this Contract has the nature of a "commercial transaction," the delay of paymentby the Respondent, creates an obligation for the payment of interest, under the terms of the Contract, with 6% interest from the beginning of the overdue period, whether a lawsuit is filed or not.
That is, April 27 is not mentioned in the 5th modification as a due date for payment as supported by the Claimant, but the payment day must be found, after defining the exact date of activation of the Contract. The Claimant alleges in its appeal to arbitration (page 10) that the contract was activated on 5-28-2003. This fact is explicitly stipulated by the Respondent in their initial response to the appeal (page 6). The 43 months from the activation of the Contract were completed, then, on 12-29-2006 and not on 4-27-2007. However, in view of the Claimant seeking interest for 28 days and the Respondent admitting that they delayed the payment by 28 days (page 177 of briefs dated 12-16-2011) overdue interest must be awarded to the Claimant for that period. The allegation of the Respondent that they did not pay, justifiably, because the invoice was addressed only to SAIC and not the full name of the Claimant, must be rejected as unfounded, since these initials are listed in brackets in the Contract as well, to indicate the name of the Claimant and therefore are sufficient for their identification. Therefore, the Claimant is entitled to interest on late payment of remuneration for the airship (1,978,029 x 6% x 28: 365 =) 9,104.35 Euro.