Mr. Edward G. Kehoe
Mr. Guillermo Aguilar Alvarez
Mr. Henry G. Burnett
Ms. Caline Mouawad
KING & SPALDING LLP
1185 Avenue of the Americas
New York 10036-4003
United States of America
Tel: +1 212 556 2100
Fax: +1 212 556 2200
Mr. Jonathan C. Hamilton Ms. Andrea J. Menaker WHITE & CASE LLP 701 Thirteenth Street N.W.
Washington, D.C. 20005 United States of America
Tel: +1 202 626 3600
Fax: + 1 202 639 9355
Dra. María del CarmenTovar Gil ESTUDIO ECHECOPAR Av. La Floresta 497, Piso 5 San Borja, Lima, Peru
Tel: +51 1 618 8551
Fax: +51 1 372 7171
The Honourable Mr. L Yves Fortier, CC, QC Cabinet Yves Fortier 1 Place Ville Marie
Montréal, Québec H3B 4R4 Canada
Tel: +1 514 286 2011
(a) Renco has failed to comply with the formal requirement of Article 10.18(2)(b) by including the reservation of rights in the waiver accompanying its Amended Notice of Arbitration because:
(i) The reservation of rights is not permitted by the express terms of Article 10.18(2)(b);
(ii) The reservation of rights undermines the object and purpose of Article 10.18(2)(b);
(iii) The reservation of rights is incompatible with the "no U-turn" structure of Article 10.18(2)(b); and
(iv) The reservation of rights is not superfluous.
(b) Renco cannot unilaterally cure its defective waiver by withdrawing the reservation of rights.
(c) The Tribunal has no power to sever the reservation of rights from Renco's waiver and remedy Renco's non-compliance with Article 10.18(2)(b).
(d) Peru's waiver objection is not tainted by any ulterior motive to evade its duty to arbitrate Renco's claims.
(e) It follows that Renco has failed to establish the requirements for Peru's consent to arbitrate under the Treaty.
(f) Renco's claims must therefore be dismissed for lack of jurisdiction.
1. The arbitral tribunal shall fix the costs of arbitration in the final award and, if it deems appropriate, in another decision.
2. The term "costs" includes only:
(a) The fees of the arbitral tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself in accordance with article 41;
(b) The reasonable travel and other expenses incurred by the arbitrators;
(c) The reasonable costs of expert advice and of other assistance required by the arbitral tribunal;
(d) The reasonable travel and other expenses of witnesses to the extent such expenses are approved by the arbitral tribunal;
(e) The legal and other costs incurred by the parties in relation to the arbitration to the extent that the arbitral tribunal determines that the amount of such costs is reasonable;
(f) Any fees and expenses of the appointing authority as well as the fees and expenses of the Secretary-General of the PCA.
1. The costs of the arbitration shall in principle be borne by the unsuccessful party or parties. However, the arbitral tribunal may apportion each of such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case.
2. The arbitral tribunal shall in the final award or, if it deems appropriate, in any other award, determine any amount that a party may have to pay to another party as a result of the decision on allocation of costs.
(a) First, Peru's conduct in connection with the delay in raising the waiver objection unnecessarily increased Renco's costs;
(b) Second, the issues regarding Peru's objection to Renco's reservation of rights were novel and complex; and
(c) Third, while Peru prevailed on issues relating to the waiver objection, Peru failed on other issues which were decided by the Tribunal and the Tribunal did not rule on many other issues which were briefed by the Parties.
(a) Ordering Peru to pay Renco USD 3,836,067.63 for the costs that Renco incurred preparing its Memorial on Liability;
(b) Ordering each Party to bear all other costs of their own legal representation and assistance (i.e. all costs other than the USD 3,836,067.63 referenced immediately above); and
(c) Ordering each Party to bear half of the costs of the Tribunal and administering authority.
(a) The costs that Renco unnecessarily incurred due to Peru's delay in raising its jurisdictional waiver objection, in the amount of USD 3,836,067.36; and
(b) The costs that Renco incurred in its successful Article 10.20(4) submissions, in the amount of USD 749,354.30.
(a) Phase 1: Before Notification of Preliminary Objections:
(i) Counsel's fees - USD 2,154,559.80;
(ii) Experts - USD 654,613.80;
(iii) Disbursements - USD 98,564.39;
(iv) Tribunal / administrative expenses - 175,000.
(b) Phase 2: After Notification of Preliminary Objections:
(i) Counsel's fees - USD 1,306,744.66;
(ii) Experts - USD 142,327.97;
(iii) Disbursements - USD 9,777.13;
(iv) Tribunal / administrative expenses - USD 200,000.
(c) Phase 3: After Peru Objected to Ongoing Violations:
(i) Counsel's fees - USD 2,374,665.70
(ii) Experts - USD 992,993.94;
(iii) Costs - USD 83,531.23;
(iv) Tribunal / administrative expenses - USD 200,000.
(a) The fact that Peru has only achieved a relative, rather than an absolute, measure of success;
(b) The fact that the issues raised in the waiver phase of the arbitration were novel and complex; and
(c) The fact that Peru delayed in raising its objection to the Tribunal's jurisdiction on the basis of Renco's non-compliance with Article 10.18(2)(b) of the Treaty.
(a) The contention that Renco's wholly-owned local enterprise, Doe Run Peru S.R. LTDA (" DRP "), had failed to provide a waiver under Article 10.18(2) of the Treaty; and
(b) The contention that Renco has (through DRP) initiated and/or continued proceedings in the Peruvian courts concerning measures alleged to constitute a breach of the Treaty in this arbitration.
The arbitration had already been on foot for quite some time before Peru filed its Memorial on Waiver on July 2015. By this stage over four years had passed since Renco filed its Notice of Arbitration; the Tribunal had already issued Procedural Order No. 1 which recorded the agreed briefing schedule for the arbitration; Renco had filed its Memorial on Liability; the Parties had exchanged voluminous submissions in connection with Renco's challenge to the scope of Peru's Preliminary Objections; and the Tribunal had issued a substantive decision on December 18, 2014 in relation to the Scope of Peru's Preliminary Objections under Article 10.20(4). Clearly it would have been preferable for all concerned if Peru had raised its waiver objection in a clear and coherent manner at the very outset of these proceedings. Instead, they emerged piecemeal over a relatively lengthy period of time. This issue is considered further at paragraphs 180-183 below.
Indeed, while Peru complained to Renco many years ago that it considered to Peruvian bankruptcy proceedings involving DRP violated Article 10.18(2), Peru did not raise any clear and specific objection in relation to Renco's reservation of rights until Peru filed its Comments on the submission of the United States of America on September 10, 2014... [and] [t]his submission was not developed in any depth until Peru filed its Memorial on Waiver in July 2015, where Renco's compliance with the formal requirements of Article 10.18(2)(6), by reason of the reservation of rights, was placed squarely in issue.
|The Honorable L. Yves Fortier, CC, QC||USD 96,937.50||USD 8,623.09|
|Mr. Toby T. Landau, QC||USD 118,125.07||USD 16,943.79|
|Dr. Michael J. Moser||USD 360,525.00||USD 58,758.97|
|Tribunal's Assistant||USD 13,395|
|Total||USD 588,982.57||USD 84,325.85|
|Total (Fees + Expenses)||USD 673,308.42|
(a) Each Party shall bear their own legal and other costs incurred in relation to the arbitration;
(b) Each Party shall bear half of the arbitration costs of the proceeding indicated in paragraph 55 of this Award. The ICSID Secretariat will provide the parties with a detailed financial statement reflecting the final costs and balance in the case account; and
(c) ICSID shall reimburse to each Party half of the unexpended balance of the advance on costs.
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