“12. Pleadings: Number, Sequence, Time Limits
12.1. The Claimants shall file its Statement of Claim on 1 March 2012.
12.2. The Respondent shall file its Statement of Defense, pursuant to the UNCITRAL Rules, on 1 August 2012.
12.3. The Claimants shall file its Reply, in accordance with Article 24 of the UNCITRAL Rules, on 1 November 2012.
12.4. The Respondent shall file its Rejoinder, in accordance with Article 24 of the UNCITRAL Rules, on 1 February 2013.
[...]
12.7. An oral hearing will be held from 1 to 10 April 2013 (exclusive of the weekend) at which the Parties will present their experts and witnesses, and make oral submissions.”
“(a) The Respondent shall file its Statement of Defense, pursuant to the UNCITRAL Rules, on 14 September 2012;
(b) The Claimants shall file their Reply, in accordance with Article 24 of the UNCITRAL Rules, on 5 December 2012;
(c) The Respondent shall file its Rejoinder, in accordance with Article 24 of the UNCITRAL Rules, on 22 February 2013; and
(d) An oral hearing will be held on 1-10 April 2013 (exclusive of the weekend) at which the Parties will be able to examine experts and witnesses, and make oral submissions.”
“(a)The calendar of submissions, defined through common agreement by Procedural Order No. 1 as amended by Procedural Orders Nos. 2 and 3, is maintained and therefore Respondent shall file its Statement of Defense on 14 September 2012, and the other Submissions will follow as and in accordance with the defined calendar;
(b) On 14 September 2012, either as part of its Statement of Defense or in a separate Memorial on Jurisdiction, the Respondent shall set forth in full its objections to the jurisdiction of the Arbitral Tribunal;
(c) On 15 October 2012, the Claimants shall file a Counter-Memorial on Jurisdiction;
(d) On 31 October 2012, the Respondent may file a Reply on Jurisdiction;
(e) If a Reply has been filed, the Claimants may file a Rejoinder on Jurisdiction on 15 November 2012;
(f) Once the Parties have fully pleaded the jurisdictional issues, as set forth in the above calendar, the Tribunal will decide whether (i) to bifurcate the proceedings and hold specific hearings on the jurisdictional issues, (ii) to refuse the requested bifurcation and therefore to decide on its own jurisdiction following the scheduled hearings on the merits, or (iii) to decide on its jurisdiction without the need for any hearing;
(g) To allow the possibility referred under f) (iii) above, and in accordance with Article 17(3) of the UNCITRAL Rule 2010, Parties are requested to state on their Memorial and Counter-Memorial whether they would request an oral hearing on jurisdiction, even if the Arbitral Tribunal considers it unnecessary.”
“a) On 5 October 2012, the Respondent shall file a Response;
b) On 4 January 2013, the Claimants shall file Reply;
c) On 13 February 2013, the Respondent shall file a Rejoinder;
d) On 14 March 2013, each Party shall provide, with a copy to the Tribunal and the PCA: (a) the names of the witnesses whose statement or report has been submitted by the other Party with the request that they be available for cross-examination at the hearing; and (b) as the case may be, a request for the Tribunal to permit the appearance at the hearing of witnesses whose statement or report has been submitted by the Party.”
“a) On 15 October 2012, the Respondent shall file their Statement of Defence;
b) On 26 October 2012, the Claimants shall file their Counter-Memorial on Jurisdiction;
c) On 23 November 2012, the Respondent may file a Reply on Jurisdiction;
d) If a Reply has been filed, the Claimants may file a Rejoinder on Jurisdiction on 17 December 2012;
e) Once the Parties have fully pleaded the jurisdictional issues, as set forth in the above calendar, the Tribunal will decide whether (i) to bifurcate the proceedings and hold specific hearings on the jurisdictional issues, (ii) to refuse the requested bifurcation and therefore to decide on its own jurisdiction following the scheduled hearings on the merits, or (iii) to decide on its jurisdiction without the need for any hearing;
f) On 13 January 2013, the Claimants shall file Reply on the merits;
g) On 13 February 2013, the Respondent shall file a Rejoinder on the merits; and
h) On 14 March 2013, each Party shall provide, with a copy to the Tribunal and the PCA: (a) the names of the witnesses whose statement or report has been submitted by the other Party with the request that they be available for cross-examination at the hearing; and (b) as the case may be, a request for the Tribunal to permit the appearance at the hearing of witnesses whose statement or report has been submitted by the Party.”
178. The Claimants consider that there is no reason to believe that, upon signing the Treaties, Bolivia did not account for the fact that multiple claims could be heard in a single proceeding. It is undisputed that multiple investors may jointly file claims in the context of a single proceeding without being specifically authorized to do so under the relevant investment treaty, and even if the State opposes such joinder of claims. Likewise, an investor may file arbitration proceedings under different legal instruments, on the basis of the consent which has been provided for each of such legal instruments, and even if such instruments do not expressly provide for this possibility.134
179. Additionally, whether the Claimants may be jointly heard in the same proceedings is a procedural rather than a jurisdictional question. In this regard, the Tribunal has broad discretion to rule upon this issue under the UNCITRAL Rules and Procedural Order No. 1. The advantages of a unified proceeding in terms of efficiency and consistency are undisputed and, in any event, Bolivia has not provided a single reason to proceed otherwise.
180. The Claimants consider that Bolivia has failed to pursue its claim on the alleged incompatibility of the BITs135 as well as its argument that a “consolidation” is under discussion in these proceedings. By opposing these proceedings Bolivia only seeks to delay a final award, as it has not even contested the fairness and efficiency of jointly settling claims that have been jointly submitted, nor has it explained how such joinder of claims would adversely affect it.136
181. In any event, the Claimants believe that their claims may be analyzed from the standpoint of either of them, as there is a single damage. Should the Tribunal consider these claims from GAI’s standpoint, it would find that GAI would have directly lost the market value arising out of the spot price and effective remedy claims, without having to consider any question pertaining to Rurelec, as Rurelec’s loss would be entirely compensated by way of a full damages award in favour of GAI. On the other hand, should the Tribunal decline jurisdiction over GAI’s claims, then it might consider analyzing Rurelec’s stake in EGSA, which is the same as GAI’s. As regards regulatory measures, the losses incurred by both of the Claimants would also be the same. If the Tribunal considers Rurelec’s claims, then Rurelec’s loss would be the market value of its shareholding in EGSA as of the valuation date, as well as the related loss arising from the effective remedy and spot price claims. In this context, it
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would not be necessary to consider any other matter pertaining to GAI, as GAI’s loss would have been entirely redressed by way of a full damages award in favour of Rurelec. If the Tribunal were to decline jurisdiction over Rurelec’s claims, it should have to consider GAI’s claims. The valuation of GAI’s shareholding in EGSA is the same as Rurelec’s; hence, the damages calculation for both Claimants would be the same.137
The Respondent’s Arguments
182. Bolivia considers that there is no legitimate conflict between Bolivia and Rurelec in this arbitration, as Rurelec cannot be regarded an “investor” and has not made any “investment” pursuant to the UK-Bolivia BIT. Therefore, Bolivia’s alleged consent could not have been provided.
183. Firstly, and relying on international case law and the VCLT, the Respondent claims that Rurelec has the burden of proof with respect to both the alleged existence of an “investment” and its capacity as an “investor”. Rurelec must prove that it acquired a direct ownership interest or, if allowed for under the UK-Bolivia BIT, an indirect ownership interest in EGSA prior to the dispute. However, neither of these points has been proven and thus, the Tribunal should decline jurisdiction over the dispute.138
184. Secondly, in the Respondent’s view, the documentation submitted by the Claimants does not prove an investment by Rurelec in GAI in January 2006. Assuming arguendo that such documentation is sufficient, which the Respondent claims is not, it would merely prove a possible acquisition of an indirect ownership interest in EGSA on 29 June 2009, on which date the controlling interest chain between EGSA and Rurelec would have been established.139 Based on such date, the major capital investments in new productive capacity undertaken by EGSA between 2006 and 2008, and repeatedly referred to by the Claimants,
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would have taken place without Rurelec holding any ownership interest in EGSA. In any event, the date on which such possible acquisition of an indirect ownership stake took place would be irrelevant, as there is no document evidencing actual payment of the investment, which consequently does not exist.
185. Thirdly, if Rurelec had invested in EGSA, such an investment would be an indirect investment as it would have been made through Birdsong, BIE, and GAI. Moreover, BIE and Birdsong Overseas Limited are incorporated under the laws of the British Virgin Islands,140 a territory to which the provisions of the UK-Bolivia BIT are not applicable. In addition, as an indirect investment, it would not be protected under the UK-Bolivia BIT, unlike under the US-Bolivia BIT. In this regard, Respondent claims that the US-Bolivia BIT contains a broad definition of investment which includes “every kind of investment owned or controlled directly or indirectly by that national or company” [Tribunal’s translation],141 whereas the UK-Bolivia BIT makes no reference to a direct or indirect investment holding.
186. On the other hand, according to the Respondent’s interpretation of Articles II to V of the US- Bolivia BIT, protected investments must be “of” nationals or companies “of” each Contracting Party, thus requiring a direct ownership relationship between the investment and the national of a Contracting Party for the latter to be considered an investor. This interpretation is supported by the terms “own” and “owner” included in Article V(2) of the US-Bolivia BIT which, according to the Respondent’s interpretation, imply ownership or legal right to hold the shares.
187. Since the UK-Bolivia BIT makes no reference to “direct or indirect” ownership, based on the case law cited by the Respondent, the protected investment must be deemed direct.142 Moreover, the Respondent stresses that 13 out of the 22 BITs signed by Bolivia contain said phrase, whereas 8 do not. Thus, if the parties to the UK-Bolivia BIT had intended to protect indirect —and not just direct— investments, they would have made a specific reference thereto, as was the case in other treaties.
188. Hence, Respondent submits that an indirect investment in EGSA is not protected under the UK-Bolivia BIT.143 It also considers that the courts and tribunals in the cases cited by the Claimants did not rule on the existence of terms confirming the inclusion of indirect investments in the relevant treaties (as is the case, in the Respondent’s opinion, under the
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UK-Bolivia BIT), neither did such courts or tribunals consider the State’s position upon signing different treaties or the difference between direct and indirect investments.144
189. The Respondent further argues that the provisions of the UK-Bolivia BIT only protect “capital” investments.145 This argument has been upheld by international courts and tribunals as well as by legal authorities in light of the inherent meaning of the term “investment”.146 Consequently, a contribution in cash or any other economic value is required for an investment to be protected under the UK-Bolivia BIT. As stated by the Respondent, Rurelec made no capital investment in Bolivia pursuant to the UK-Bolivia BIT.
190. Even assuming that Rurelec is an investor and that the UK-Bolivia BIT protects indirect investments, the Respondent submits that Rurelec has made no contribution “within” Bolivian territory. It further states that the distinction drawn by the Claimants between “capital investment” and “investment” in the different versions of the UK-Bolivia BIT147 is irrelevant, as Bolivia’s objection was not based on such distinction.
191. Bolivia’s objection is based on the objective notion of the term “investment”, which implies a monetary contribution or input in the host State. Thus, the Respondent challenges the White Industries148 case cited by the Claimants, where the tribunal disregarded the relevance of a monetary contribution or input, but at the same time deemed it important to confirm that the foreign investor had indeed made such contribution or input in the case at hand.149 Likewise, in Romak and Alps Finance150 (which, according to Bolivia, have been misinterpreted by Claimants as dealing with special circumstances), the tribunal separated
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the facts from the inherent meaning of the term “investment”, criticizing the Claimants’ position.151
192. In addition, Rurelec would have to prove that it made a monetary or other contribution in the territory of Bolivia.152 The Respondent argues that the Claimants have failed to demonstrate the foregoing.153 Bolivia has only proven a possible acquisition of an indirect ownership interest in EGSA in 2009 (ten years following the capital contributions in Bolivian territory relating to the capitalization of EGSA). No evidence has been submitted to prove that such an investment was made through a monetary or other economic contribution, or that it was made in Bolivian territory. The Respondent submits that EGSA’s shareholders have made no capital contributions since 1999, and that the alleged “investments” made by the Claimants in 2006 and 2007 cannot be attributed to the Claimants, as Rurelec did not have an indirect shareholding in EGSA at the time.
193. Lastly, since EGSA’s capitalization in 1999 (10 years prior to Rurelec’s alleged acquisition of an indirect ownership interest), there has been no capital contribution by EGSA’s shareholders. Neither the purchase of the two engines owned by Energais in Bolivia (decommissioned, disassembled, and stored at EGSA) nor Rurelec’s interest in Energais can be deemed as investments under the UK-Bolivia BIT.154
194. For the foregoing considerations, Rurelec does not qualify as an investor and its alleged investment cannot be considered a “protected investment” under the UK-Bolivia BIT. Therefore, the Tribunal lacks jurisdiction “rationae personae” over this dispute.
195. The Respondent states that the Claimants’ arguments in support of Rurelec’s alleged acquisition in EGSA154 are insufficient. Bolivia denies Rurelec’s acquisition of an indirect shareholding in EGSA during 2006 or 2009156 for the following reasons:
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(a) The Claimants have provided no evidence of payment for said acquisition. They merely transcribe the price included in a stock purchase agreement dated 12 December 2005, a share transfer dated 5 January 2006, and a press release issued by Rurelec on 5 January 2006.157 The conditions under which such payment took place are likewise not proven.158
(b) Documents submitted by the Claimants do not prove the shareholding chain that would link Rurelec and EGSA since 2006, but rather an alleged indirect investment made by Rurelec since 2009. Only a letter from Nerine Fiduciaries to its Freshfields attorneys dated 26 October 2012 (same date on which Claimants submitted their Counter- Memorial on Jurisdiction) would relate Birdsong to EGSA before 2009.159 No other document from any of the other intervening entities has been submitted to confirm that the BIE shares were actually owned by Birdsong. Likewise, no explanation has been provided as to why Birdsong (if it really acquired the shares in 2006) waited until 2009 to register them under its name, neither is there evidence that Birdsong was wholly owned by Rurelec.160 In any event, such documents are not official documents.161
(c) Mr Peter Earl’s position as President of EGSA’s Board of Directors does not prove that EGSA’s shares have been owned, even indirectly, by Rurelec. Moreover, his attendance as President of the Board of Directors at the official opening of EGSA’s new facilities is not “exceptional” [Tribunal’s translation].162
196. In light of the above, Bolivia states that the Claimants have failed to provide evidence of Rurelec’s payment for the allegedly acquired shares, or of an economic contribution in Bolivian territory. Accordingly, the Respondent claims that there has been no protected investment under the Treaty, which results in the Tribunal’s lack of jurisdiction rationae personae.
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The Claimants’ Arguments
197. Firstly, the Claimants submit that Rurelec acquired its indirect majority stake in EGSA on 6 January 2006,163 and that Rurelec was already EGSA’s majority shareholder during the period of EGSA’s investments to improve its electricity generation capacity between 2006 and 2007. The Claimants deny that such stake was acquired at a later date—in June 2009—, as they assert that: (i) Bolivia requested specific documents from the Claimants on this matter on 7 September 2012 and Rurelec submitted said documentation; (ii) as evidenced by such documents, the execution and delivery of the stock transfer dated 5 January 2005 shows that the transaction was completed on 6 January 2006 with the payment of USD 35 million; (iii) other ancillary documents likewise confirm that Rurelec made its investment in 2006;164 and (iv) the Respondent became aware of Rurelec’s investment in EGSA prior to 2009, as proven by the fact that in March 2007, Bolivian authorities, along with Mr Earl and the United Kingdom’s Ambassador to Bolivia, attended the inauguration ceremony for EGSA’s new GCH-11 unit.165
198. The Claimants claim to have provided sufficient evidence that Rurelec acquired an indirect majority stake in EGSA and claim that Bolivia has not disproven the foregoing, which is why its objection thereto should be dismissed. The Claimants allege that the price of USD 35 million for the purchase of EGSA was fully paid, as evidenced by the 2006 and 2007 annual reports and the audits performed.166 Following the acquisition and until June 2009, BIE’s shares were held in escrow by entities designated for the benefit of Birdsong, as per corporate practice.
199. Secondly, the Claimants consider that the UK-Bolivia BIT does protect indirect investments, as it covers “every kind of asset” as well as “any form of participation in a company”, and the list of protected investments included therein is non-exhaustive. Indirect shareholdings are an asset and therefore, a form of participation in a company, which makes them protected investments under the UK-Bolivia BIT. This conclusion is supported by extensive arbitral practice,167 and the cases submitted by Bolivia are inappropriate for these proceedings.
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200. The Claimants insist that Rurelec’s indirect shareholding in EGSA must be deemed an “investment” under the illustrative list of the Treaty, as such list refers to “shares in [...] a company and any other form of participation in a company.” The latter is a broad definition and the absence of more specific language (“directly or indirectly”) cannot narrow its scope, as intended by the Respondent. Bolivia has failed to prove that the UK-Bolivia BIT deliberately excluded indirect investments.168 For the Claimants, tribunal practice provides a consistent interpretation of provisions similar to the ones set forth in the UK-Bolivia BIT, which protect indirect investments.169
201. Bolivia’s argument that investments should be made directly by nationals or companies for them to be protected by a BIT is rejected by international case law.170 In turn, case law and legal scholars cited by the Claimants171 rebut the theory that the presence of third-party companies as intermediaries in order to obtain a stake in EGSA prevents Rurelec from being considered an investor under the UK-Bolivia BIT.
202. Thirdly, the Claimants object to the concept of “investment” suggested by Bolivia, which requires a capital contribution in Bolivian territory (“capital investment”), and further reject the statement that Rurelec has made no capital investment and consequently cannot be protected under the UK-Bolivia BIT.172 Said statement applies a rule which has been created exclusively by ICSID case law based on the ICSID Convention, and which cannot be applied to the present dispute.173
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203. Conversely, the Claimants consider they have made major investments in Bolivia.174 In addition, Rurelec and the Government of Bolivia conducted a project aimed at providing electricity to unserved rural areas, and agreed that Rurelec would finance a subsidy to low-income consumers known as the “dignity tariff”. This was financed by Rurelec through its returns on the investments made, deferred dividends, commercial loans, and other financing sources for EGSA.175
204. According to the Claimants, Bolivia’s interpretation of the concept of “protected investment” is incorrect and distorts the true meaning that the UK-Bolivia BIT intended for such term, depriving it of its effet utile. The Respondent relies on the Spanish version of the UK-Bolivia BIT and refers to the concept of “returns” (rentas) in Article 1(b) thereof.176 In such version, the concept of “capital investment” (inversión de capital) is defined within the concept of “returns”. However, the English version of the Treaty only uses the term “investment”,177 which, in the Claimants’ opinion, is the concept actually defined by the UK-Bolivia BIT. Under the VCLT, in case of any inconsistency between different versions of the same treaty, the meaning that best reconciles both texts shall prevail, which in this case is of the one set forth in the English version, as the latter includes a broad concept of investment which accurately reflects both the drafters’ intention and the object and purpose of the UK-Bolivia BIT.
205. Likewise, the Claimants insist that the case law submitted by the Respondent to determine the concept of “investment” is inappropriate. On the one hand, Bolivia cites cases where a narrow concept of investment is used in connection with Article 25 of the ICSID Convention, which cannot be applied in this case. On the other hand, the cases cited by Bolivia relating to to the UNCITRAL Rules account for a minority position and are based on facts different from the ones underlying these proceedings.178
206. In any event, the Claimants assert that, if Respondent’s definition of “investment” were to be applied, Rurelec’s investment would also fall within the scope thereof on account of its
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contributions to the Bolivian economy, as mentioned above.179 Based on the report from its witness Marta Bejarano, Bolivia states that Rurelec made no contribution in EGSA using its own funds, but rather decapitalized EGSA and increased its indebtedness. This latter statement, however, has been rebutted by the Claimants’ witness Marcelo Blanco.180
207. On the other hand, the Claimants reject the requirement that the investment be made in Bolivian territory. From the Claimants’ viewpoint, references to territory concern the host State Party which would benefit from the investment, not the place where the contribution must take place.181 If the relevant criterion were the place where the contribution is made, any investor acquiring an interest in a company (as is the case of Rurelec) would be deprived of the protection under the Treaties only because it made no direct capital contribution, but rather paid to the initial investor (in this case, GAI). Nevertheless, case law cited by the Claimants states otherwise, as it protects foreign investors who have acquired a previously existing investment: the investment remains even if the investor changes.182
208. In any event, the Claimants consider that Bolivia’s additional criterion of a “contribution” in Bolivian territory has been complied with, given that Rurelec paid for the acquisition of its shares in EGSA and thus, such contribution must be deemed an investment in Bolivia.183 This interpretation would be consistent with the Quiborax decision184 cited by the Respondent. If we apply the facts of Quiborax to these proceedings, the payment of USD 35 million made by Rurelec for the acquisition of a controlling interest in EGSA would amount to a “contribution” pursuant to the definition provided in Quiborax.185 As a result, Bolivia’s objection should be rejected.
209. Likewise, the Claimants allege that Rurelec has made other important contributions in Bolivia, such as the obligations incurred in connection with the USD 20 million loan granted to EGSA by the Corporación Andina de Fomento (hereinafter, the “CAF”), or the expertise and know-how provided to EGSA’s personnel and operations. This important contribution
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has even been acknowledged by independent third parties, such as the credit rating agency, Fitch.186
210. Lastly, the Claimants consider that both Rurelec’s shareholding in Energais and the Worthington engines constitute protected investments under the UK-Bolivia BIT. In accordance with Article 5(2) thereof, measures taken by the Respondent in respect of the Bolivian subsidiary of a UK investor (such as its expropriation in this case) require just and effective compensation. Moreover, the Worthington engines constitute movable property under Article 1(a)(i) of the UK-Bolivia BIT, and therefore Rurelec’s indirect interest in such movable property is protected.187
215. Therefore, GPU was free to choose the company that would participate in the bidding process as the subscribing company to acquire EGSA’s shares. However, it decided to create a “vehicle” in the State of Delaware (GAI) without any commercial activity in the United States. This latter point is contested by the Claimants,196 but confirmed by the Respondent, who insists that as GAI (i) declared zero US dollars in taxes in 2011; (ii) cannot be considered a “traditional holding company,”197 and (iii) its commercial activities mentioned by the Claimants are either insufficient or inexistent, as they merely met the minimum legal requirements of the State of Delaware.198 Therefore, in the Respondent’s words, “GAI is no more than a mailbox company,”199 and there are no documents that prove otherwise.200 Consequently, it meets the two conditions set forth in Article XII of the US-Bolivia BIT for the Treaty benefits to be denied to it.
The Claimants’ Arguments
216. According to the Claimants, the application of Article XII of the US-Bolivia BIT would violate the international principle of pacta sunt servanda and would contravene the object and purpose of investment treaties (the promotion of investments based on rationality and predictability). According to the case law submitted in these proceedings, the denial of benefits cannot apply retroactively, as sought by the Respondent, that is, once the investment has been made, since the purpose of such provision is to give a State the opportunity to alert investors in advance that they are no longer afforded protection under the relevant treaty, thereby protecting the legitimate expectations such investors may have.201 Denial of benefits
224. In its Reply on Jurisdiction, the Respondent states that the Claimants have failed to prove two points in connection with the New Claims: (i) prior notification of such claims to Bolivia, and (ii) that such claims were mentioned during negotiations between the Parties. Therefore, the Tribunal shall decide whether Bolivia gave its consent to arbitrate these New Claims and whether the conditions on disputes and cooling off were met.
225. Against the statements made by the Claimants concerning Article IX of the US-Bolivia BIT,215 the Respondent holds that, in addition to its prior arguments216 and based on Murphy,217 a dispute arises at the time in which an investor alleges a treaty violation. Thus, the period of three months required under the US-Bolivia BIT starts running on the date of such allegation, which the investor shall prove. Hence, GAI has the burden of proving that Bolivia became aware of a dispute under the Treaty concerning the New Claims at least three months before the commencement of this proceeding. Nonetheless, this evidence has not been submitted.218
226. Furthermore, the Respondent argues that the Claimants contradict themselves concerning the condition on prior notification under the US-Bolivia BIT. Although they initially espoused its mandatory condition when giving written notice to Bolivia of the dispute for purported expropriation,219 they now deny the application of such condition concerning the New Claims, alleging that notice and cooling off conditions are not imperative or jurisdictional in nature. Based on the VCLT and in the Burlington and Murphy cases220, as well as on recent precedents221 that in its criterion outweigh the precedents invoked by the Claimants,222 the
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Respondent affirms that the statement above takes issue with Articles 8 of the UK-Bolivia BIT and IX of the US-Bolivia BIT.
227. Now therefore, should the Tribunal find that the notification and cooling off conditions are of a procedural nature, it shall construe them so that they make full effect, since otherwise, the text of the Treaties would lose its effet utile, and the good faith interpretation rule would be thus breached.223
228. On the basis of ICS Inspection and Control Services,224the Respondent considers that the Tribunal does not have the power to set aside the notification and cooling off conditions, even if they were futile. In any case, this has not been demonstrated by the Claimants either;225 therefore, there is no evidence that: (i) Bolivia would not have amicably resolved the disputes concerning the New Claims with no notification thereof before the Statement of Claim; or that (ii) negotiations on the New Claims would not have succeeded because negotiations on nationalisation did not succeed.226
229. Lastly, the Respondent affirms that against the backdrop of limitations to Bolivia’s consent in the Treaties, the considerations of cost and “dilatory nature” are inappropriate.227
230. Third, Bolivia affirms that the Claimants have made allegations in an “opportunistic” manner and “for the first time in this arbitration” that the measures giving rise to the New Claims resulted in the expropriation, as preliminary steps that were capped with the nationalisation, and thus related to the notified nationalisation.228 The Respondent considers that such allegations are false on the following grounds:
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(a) Both the Notice of Dispute and the definition of “dispute” in the Notice of Arbitration evidence the limited nature of the single dispute notified to the Respondent.229
(b) The Claimants acknowledge that the notifications of May 2012 referred to “[t]he dispute [that] arises out of the Bolivian Government’s nationalisation of Rurelec’s indirect shareholding in [EGSA] by means of Supreme Decree No. 0493 dated 1 May 2010.”230 Nonetheless, the New Claims concerning the PBP and spot prices cannot “arise out of” the 2010 Supreme Decree, since they stem from measures adopted in 2007 and 2008, respectively.231
(c) The Claimants have not submitted any evidence that the measures that gave rise to the New Claims were preliminary steps for the nationalisation of their investment.232 In any case, this argument takes issue with the terms of their claims, since they have never mentioned an indirect expropriation.233
(d) The thesis according to which the Claimants reserved the right to add facts and arguments to support their claim is “absurd”, especially if the cases that define the notion of “dispute” or “controversy”234 are considered, so that the New Claims would not be considered as pertaining to the dispute on nationalisation.235 In any case, no relationship between the facts, applicable law and the chronology underlying the New Claims and nationalisation has been established.236
(e) The Claimants’ have also included in their New Claims the claim for the Worthington engines, and both Parties agree that these engines were not within the scope of application of the Nationalisation Decree.237
231. According to the Respondent, the Claimants suggest that negotiations on compensation for the nationalisation were “amicable” and could have served to negotiate on the New Claims.
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However, the New Claims were never discussed in the consultations and meetings held on the assessment of EGSA’s equity for the calculation of the compensation owed for the nationalisation.238 This is confirmed by the Claimants themselves in their Statement of Claim239 and Counter-Memorial on Jurisdiction.240 Moreover, the Respondent adds that it became aware of the New Claims after the submission of the Statement of Claim, months before the amicable consultations finished. The Claimants themselves acknowledged that they have “raised these specific issues for the first time during the legal and quantification exercise that the filing of a Statement of Claim entails,”241 so that it is impossible for these to have been negotiated beforehand.242
232. In light of the foregoing, the Respondent reaffirms that the Tribunal has no jurisdiction to hear the New Claims raised by the Claimants.
The Claimants’ Arguments
233. In the Claimants’ view, the “New Claims” have been properly submitted within this arbitration and, thus, no Treaty provisions have been breached, since such claims are encompassed within the same dispute (i.e., nationalisation).243
234. Concerning the amicable consultations period mentioned by the Respondent, the Claimants conclude that (i) the US-Bolivia BIT does not require prior notification of the dispute, so that the argument related to GAI would not withstand scrutiny;244 (ii) the amicable consultation period is a procedural and not a jurisdictional matter (as found in the case law invoked), so that non-observance of this requirement does not alter the Tribunal’s jurisdiction;245 and (iii)
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in any event, the Claimants have actually fulfilled such obligation, since all “New Claims” refer to the notified nationalisation. In addition, in the notification letter and in the Notice of Arbitration itself, the Claimants reserved the right to add facts and legal issues on the basis of the claim made.246
235. The precedents invoked support the Claimants’ conclusion that it is not compulsory to send a separate notice or apply the period of amicable consultations when claims refer to the same dispute.247 The cases relied upon by the Respondent are irrelevant, because they refer to scenarios in which (i) the claimant had not sent the notice of arbitration (a scenario not considered in this arbitration), or (ii) the tribunal classified the claims as “inappropriate” because they were out of context, untimely and related to legislation different from the one under discussion.248
236. Ultimately, the Claimants consider that they have complied with the amicable consultation period, since they have attempted to reach an agreement with Bolivia in order to obtain fair compensation for the nationalisation of their investments. Nonetheless, after four meetings held to that effect, no compensation was offered. It makes no sense for Bolivia to require the Claimants to undergo an amicable consultation period after having qualified the purported “New Claims” as “frivolous” and “not even claims under the Treaties or international law”. This would force the Claimants to start new negotiations in which Bolivia would not participate, making it necessary to start a new arbitration, convene a new tribunal and debate the same issues again.249 Requiring futile amicable conversations prior to the arbitration would be unnecessarily stringent, formalist and it would not inure to the benefit of the Parties. This vision is in accordance with Article 32 of the VCLT.250
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any investment-related dispute.256 Furthermore, it interprets Article IX(1) of the US-Bolivia BIT accordingly, including disputes “arising out of a [...] purported breach of any conferred right, generated or acknowledged by this Treaty” [Tribunal’s Translation], as well as those arising out of an “investment authorization” or an “investment agreement” (none of which exist in the present case). Once more, the consent granted by Bolivia is limited to disputes regarding obligations set forth in the Treaties.
241. In any case, Bolivia considers that the Tribunal shall make its own classification of the legal nature of the New Claims in accordance with the international case law invoked257 and considering that an actual “treaty claim” requires investors to demonstrate, through a clear and accurate reasoning, which acts and conducts are attributable to the State and would constitute violations of the relevant treaty or customary international law.258
242. As regards the New Claim concerning the spot price, the Respondent alleges that the Claimants intend to obtain a determination from the Tribunal on whether the price to be applied to electricity generators should be (i) the one set forth in Supreme Decree No. 26099 of 2 March 2001 or (ii) the one set forth in in Supreme Decree No. 29599.259 Ultimately, the Respondent considers that the Tribunal is being requested to determine whether such modification is compatible with the existing previously regulatory framework.
243. After outlining the evolution of regulations applicable to the electricity sector,260 the Respondent alleges that the reform made by Supreme Decree No. 29599 was targeted at mitigating the effect of the calculation method envisaged by the prior rules and regulations:261 in peak hours, the most inefficient generation units (in terms of costs and environmental damage), which contributed very little power to the system, turned into the Marginal Generation Unit,262 indicating the price that all generators would collect for each
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kW/h contributed to the system. Thus, the price of electricity would increase proportionally with the system’s production, but would not be in line with the true cost of electricity produced by the other generation units. This was detrimental to consumers and resulted in a “windfall profit” for generators. Besides, the previous system did not encourage companies to acquire more efficient equipment, as in the case of EGSA, which had the most inefficient equipment in Bolivia.
244. Supreme Decree No. 29599 removed from the spot price calculation formula all generation units that distorted such calculation, provided that they met two requirements: (1) using liquid fuel and (2) having a power below 1% of the maximum power registered in 2007.263 Bolivia explains that this variation did not mean that companies owning such generation units would stop charging for the electricity that they were contributing to the system, but rather, that they would receive the monetary value of their unitary variable costs, as per Operative Rule No. 3/2008.
245. The Claimants also allege that the modification is contrary to their legitimate expectations. However, this allegation does not turn a matter of Bolivian law into an international matter, especially when the purported legitimate expectations stem from Bolivian regulations on spot prices.264 Ultimately, the Claimants seek that the Tribunal determine whether Bolivia has breached Bolivian law instruments.265
246. This New Claim is, thus, of a domestic nature, pertaining to Bolivian law. Therefore, Bolivia considers that it has not breached its obligations under the Treaties (fair and equitable treatment, full protection and security, and undermining the investment through the adoption of unreasonable measures).266 Moreover, it adds that the Claimants intend that the Tribunal act as an administrative authority or last instance regulator of the electricity sector, superseding Operative Rule No. 3/2008 and deciding on the correct procedure for the determination of the spot price, powers which exceed the scope of arbitration tribunals’ powers, as stated by relevant case law.267
247.Concerning the New Claim on the PBP, the Respondent alleges that Claimants intend that the Tribunal rule what the PBP should be: whether (i) that featured on Operative Rule No. 19
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of 2001, adopted through Resolution SSDE No. 121/2001, or (ii) that established in new Operative Rule No. 19 of February 2007, adopted through Resolution SSDE No. 040/2007.268
248. After outlining the most important provisions on the PBP calculation method,269 Bolivia holds that the modification made through Operative Rule No. 19/2007 was a consequence of the results yielded by the independent technical study conducted by Bates White on the values that form part of the PBP calculation. Such study concluded that there was no economic reason to add to the FOB price of the turbine an additional 20% for “ancillary equipment” before adding the 50% accounting for additional costs;270 thus, such 20% was eliminated.271
249. Against such backdrop, the Claimants challenged the validity of Operative Rule No. 19/2007 both before both administrative authorities and courts.272 Now, in this arbitration, they request access to effective remedies, other than those available in the Bolivian court system, so that these claims may be enforced. Nonetheless, from the Respondent’s standpoint, the intention of the Claimants is for the Tribunal to decide whether there was a valid justification to make the modification by way of Operative Rule No. 19/2001, thus substituting any future ruling on this matter by Bolivian courts. Once more, this is a domestic law conflict which falls beyond the scope of the Tribunal’s jurisdiction.273 And even when the Claimants assert that they seek compensation for the “delay” in the ruling of Bolivian courts, the expert’s quantification reveals that the Claimants seek compensation calculated on the basis of a hypothetical annulment, by the Bolivian judiciary, of the Operative Rules with retroactive effects.274
250. Finally, concerning the New Claim on the Worthington engines, the Respondent considers that the Claimants’ request seeks that the Tribunal decide a matter which is exclusively commercial in nature275 between Energais and EGSA.276 Moreover, these New Claims were
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not included in the Nationalisation Decree and, thus, no measure related to them can be attributed to the Respondent. In fact, Bolivia considers that the Claimants have not submitted sufficient evidence of the acts that could be tantamount to expropriation under International Law; and that, in any event, the statements made by the ENDE Manager (that the Claimants take as a basis to argue on the existence of a claim under the Treaties) do not compromise Bolivia’s international responsibility, since the latter is not a State officer empowered to proceed to expropriation.277
251. Therefore, the New Claims do not refer to Treaty violations, but rather, they pertain to the scope of Bolivian domestic law and thus, the Tribunal lacks jurisdiction over this matter. Otherwise, it would be exercising powers that belong to Bolivian administrative and judicial authorities.278
The Claimants’ Arguments
251. According to the Claimants, the claims the Respondent characterizes as “New Claims” are based on the Treaties and are not of a merely contractual or commercial nature, nor do they pertain to Bolivian law, as the Respondent alleges.279 The Claimants hold that if the facts presented could, prima facie, give rise to a violation of the Treaties, these would fall within the Tribunal’s jurisdiction. Thus, for each of their three claims, the Claimants present a situation in which prima facie Bolivia breached the Treaties.280
252. First, as regards the claim relating to the spot price, the Tribunal is not expected to determine the price that should be applied to the generators, but rather to determine whether the regulatory framework in relation to spot prices was altered by Bolivia, frustrating the Claimants’ legitimate expectations, in breach of the fair and equitable treatment standard, the full protection and security standard, and the obligation not to impair investments by arbitrary and unreasonable measures.281
254. Even if the Claimants’ legitimate expectations had been formed by reference to Bolivian law, that does not turn them into purely domestic ones. Arbitral Tribunals have considered that frustration of the legitimate expectations based on the legal framework of a State gives
85
rise to treaty violations.282 The same happens with the calculation of damages resulting from the spot price manipulation, since this is a matter of fact, assessed in accordance with principles of international law on compensation for breaches of international obligations.283
255. Second, the Claimants are not requesting the Tribunal to determine the PBP, but to determine whether, following the Bolivian judicial system’s ineffectiveness and the four and a half year delay to resolve EGSA’s claim, Claimants have not had access to effective means to obtain compensation for their claims, all of which would lead to a breach of the Treaties. Therefore, this is a question of international law.284 In addition, given that the effective means standard applies both to judicial as well as administrative claims, it becomes difficult for the Claimants to understand Respondent’s argument. Likewise, quantification of damages in this case is a question of international law.285
256. Ultimately, the Claimants consider that should the Tribunal decide to acknowledge these questions and admit they may imply a breach of the Treaties, the Tribunal would also have jurisdiction to decide on the merits of the case in accordance with the case law and legal authorities cited.286 Bolivia’s argument should be rejected as the case law on which it relies cannot be applied to these proceedings,287 since the Claimants do not request the Tribunal to render an opinion on Bolivian law but rather to decide whether Bolivia fulfilled its obligations under the Treaties.
257. According to the Claimants, Bolivia has not challenged the existence of facts supporting such claims. On the contrary, Bolivia submits arguments on the merits alleging that its conduct does not amount to a breach of the Treaties, disguising such arguments as jurisdictional objections. Finally, the Iberdrola v. Guatemala case invoked by Bolivia is not applicable to this arbitration, since the Claimants are not requesting the Tribunal to fix spot and PBP prices, but to find that their modification gave rise to a breach of international obligations.
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The Respondent’ s Arguments
258. According to the Respondent, in the event the Tribunal considers it has to exercise its jurisdiction on the New Claims, it shall take into account that the Claimants first resorted to the court system to obtain a decision on the PBP. In accordance with Articles IX(2) and IX(3)(a) of the US-Bolivia BIT, selection of one of the possible channels of dispute resolution by the Claimants (in this case, resort to the court system) discards the possibility to resort to other channel (such as the arbitration) to seek a decision with respect to the same claim. Likewise, the Respondent considers that the Claimants make an excessive use of “Treaty Shopping” and “cherry picking” when holding that such an objection would only affect GAI. Therefore, they consider Rurelec may import the effective means of protection in the US-Bolivia BIT not being affected by the fork-in-the-road clause. All that, from the Respondent’s point of view, shows an abusive nature of the accumulation of Treaties and the Claimants without the State’s consent that should be rejected by the Tribunal.288
259. From the Respondent’s point of view, Article IX(3)(a) is a “fork-in-the-road” clause, thus, once the investor chooses one of the possible channels, his/her election is irrevocable and exclusive of others. Pursuant to the doctrine provided, the purpose of this kind of clauses is to prevent investors from submitting one same dispute before different forums simultaneously (as it would occur in the case at issue) so as to obtain greater chances of success.289
260. In any event, the Respondent holds that if the Tribunal is to decide whether the claim relating to the PBP that Claimants have submitted is like the one previously submitted before the Bolivian courts. By means of a table contrasting the Claimants’ allegations and pretensions before the Supreme Court with those submitted before this Tribunal,290 Bolivia explains how in both fora the Claimants disclose one same claim: to obtain compensation for the alleged losses incurred (as well as for the revenue they did not receive) as a result of the modifications introduced with respect to the PBP. 291 Therefore, should the Tribunal be seized of this New Claim, it would be “prejudging” a decision that will be subsequently rendered by the Bolivian Supreme Court, even acting as a “supervision agency” or an
87
“appellate stage” of the Bolivian judicial system.292 The foregoing considerations reinforce the Respondent’s thesis which asserts that such claim is of domestic nature.
261. Facing the Claimants’ argument pursuant to which claims shall meet a triple identity (of parties, action and claim) to be considered as one same dispute under the articles quoted hereinabove (identity which, according to the Claimants, is not met),293 the Respondent holds that this thesis is not well received among case-law and legal scholars for suffering from an excess of formalism vacating the fork-in-the-road clause from its content.294 According to the Respondent, the triple identity excessive formalism is evidenced in its third requirement, since should the Claimants’ position be adopted,295 it would be impossible to find a criterion of the same legal basis giving rise to the exercise of the fork-in-the-road clause. Therefore, the Tribunal shall disregard such an argument and decline its jurisdiction with respect to this New Claim.
262. Finally, a thorough analysis of the “identity of the parties” requirement would imply studying the companies’ corporate reality instead of making a nominal test. The Claimants seek to demonstrate it was not the same legal entity the one submitting both claims, a situation which, according to the Respondent, makes this requirement impossible to meet.296 Besides, in accordance with the case law provided, it is possible to study the “holding” for the purpose of determining if there is “identity of parties”.297 Lastly, the Claimants’ assertion according to which Bolivia’s objection would deprive the effective means provision clause from its effet utile when it prevents the investor from pursuing domestic proceedings is false.
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According to the Respondent, the dispute unit as a pre-condition for application of the fork- in-the-road clause would be omitted.298
263. Therefore, the Respondent concludes the Tribunal shall reject the claim relating to the PBP, since in accordance with Article IX(2) of the US-Bolivia BIT, it is one same claim submitted before two different fora.
The Claimants’ Arguments
264. The Claimants assert that the objection above should be rejected. For the fork-in-the-road to be invoked it is necessary that the dispute be the same and, therefore, the triple identity test: parties, subject matter and legal basis should be passed.299 The Claimants consider that (i) there is no identity of parties, since the domestic proceedings were not pursued by EGSA and Bolivia was not a party thereto; (ii) in the arbitration at issue GAI claims for economic damage, whereas in the domestic proceedings a number of administrative resolutions are sought to be revoked; and lastly, (iii) the cause is different. Although EGSA based its remedy on Bolivian law, GAI commenced this arbitration alleging a violation of the effective means standard under the US-Bolivia BIT.
265. In short, GAI needs to prove the ineffectiveness of the means available in the Bolivian court system. In the Pantechniki case provided by the Respondent,300 the arbitrator compared the legal basis of the claims and applied the triple identity test to determine whether the fork-in-the-road clause should operate or not, concluding that the test was actually met, since the parties, the subject matter and the legal basis were the same. Nevertheless, the arbitrator considered that the claimant’s claim relating to denial of justice should be heard, since this claim had not been addressed in the domestic sphere. Therefore, the Claimants consider that the Tribunal should afford the same treatment to its claim on effective means (i.e., consider that it could not be submitted before the domestic courts) and hear it. Should the arguments stated by Bolivia in that respect be accepted,301 Article II.4 and other BIT provisions would lose their meaning, since any lack of effective means or denial of justice claims before
1Notice of Arbitration, ¶4; Statement of Claim, ¶¶3-4; Claimants’ Post-Hearing Brief, ¶1.
2According to the Respondent, “New Claims” are alleged violations of the BITs on the part of Bolivia in connection with: (i) electricity spot prices; (ii) capacity payments; and (iii) the two Worthington engines. According to the Respondent, these claims were not raised in the Notice of Dispute dated 13 May 2010 or in the Notice of Arbitration dated 24 November 2010.
3Statement of Claim, ¶21; Reply on the Merits, ¶14. See Transcript (English), Day 1, 2 April 2013, 35:22-36:1.
4Statement of Claim, ¶22. See Transcript (English), Day 1, 2 April 2013, 36:1-36:10.
5Statement of Claim, ¶¶23-24.
6Statement of Defense, ¶¶26, and 31; Rejoinder on the Merits, ¶¶30-40. In addition, the Respondent claims that the good condition of the electricity sector was confirmed by the Energy Management Assistance Program (hereinafter, “ESMAP”), and by neighboring countries. Therefore, it claims that capitalization was not an emergency measure.
7Statement of Claim, ¶25.
8Statement of Claim ¶26. See Transcript (English), Day 1, 2 April 2013, 36:13-38:6.
9In this regard, the Claimants affirm in their Reply on the Merits, ¶21, that Bolivia has only challenged the qualification of the personnel hired by ENDE. Thus, the Respondent has accepted the fact that the General Electricity Directorate was limited (in terms of technical capacity) due to budget constraints.
10Statement of Defense, ¶¶30, 32-33.
11Statement of Defense, ¶33.
12Reply on the Merits, ¶19; Joint UNDP/World Bank Program, p. 24 (Exhibit C-61); Witness Statement of Juan Carlos Andrade, 21 January 2013, ¶14.
13Rejoinder on the Merits, ¶¶40-44.
14Statement of Claim, ¶27; Reply on the Merits, ¶¶24-28; Claimants’ Post-Hearing Brief, ¶27. See Transcript (English), Day 1, 2 April 2013, 36:13-38:6. 39:14-41:3; Transcript (English), Day 6, 9 April 2013, 1338:17-1338:23.
15Id., ¶27.
16Id., ¶29; Statement of Defense, ¶39; Rejoinder on the Merits, ¶47.
17Id., ¶29.
18Statement of Claim, ¶29; Statement of Defense, ¶¶42, and 44.
19Id., ¶38.
20Id., ¶38; Memorial on Jurisdiction, ¶212.
21Memorial on Jurisdiction, ¶¶214-216.
22Id., ¶¶222, and 225.
23See Electricity Law (Exhibit C-5). See Transcript (English), Day 1, 2 April 2013, 41:13-41:22.
24Statement of Claim, ¶42; See Joint UNDP/World Bank Energy Sector Management Assistance Program, “Bolivia: Restructuring and Capitalization of the Electricity Supply Industry- an Outline for Change” (Exhibit C-61).
25Statement of Defense, ¶40. See Transcript (English), Day 1, 2 April 2013, 38:6-38:19.
26Statement of Claim, ¶53; Statement of Defense, ¶42; Rejoinder on the Merits, ¶48; Claimants’ Post-Hearing Brief, ¶29. See Transcript (English), Day 1, 2 April 2013, 47:9-47:14.
27Id., ¶57; Claimants’ Post-Hearing Brief, ¶29. See Terms of Reference (Exhibit C-7, Article 2.3).
28Id., ¶57; Claimants’ Post-Hearing Brief, ¶29. See Certificate of Incorporation GAI 13 July 1995 (Exhibit C-11), and Proof of Subscription of 50% of the shares of EGSA by GAI for USD 47.131 million, 28 July 1995 (Exhibit C-12); Letter from the Central Bank of Bolivia to the Minister of Capitalization, 28 July 1995 (Exhibit C-13). See Transcript (English), Day 1, 2 April 2013, 47:14-47:24 and Day 6, 9 April 2013, 1339:15-1340:3.
29Id., ¶58. See Capitalization Agreement, clauses 5.1 and 8 (Exhibit C-14). See Transcript (English), Day 1, 2 April 2013, 47:24-48:3.
30It is worth clarifying that at this point the Claimants had no control over EGSA (they only held 50% of the shares), so that the Board was not chiefly composed by shareholders of the current Claimants.
31Statement of Claim, ¶60; Reply on the Merits, ¶¶38-40. See Transcript (English), Day 1, 2 April 2013, 48:22-49:23.
32Id., ¶63. See Gover Barja and Miguel Urquiola, Capitalización y Privatización en Bolivia: Una aproximación a una evaluación, February 2003 (Exhibit C-96); Witness Statement of Lanza, ¶19.
33Id., ¶65; Statement of Defense, ¶44; Rejoinder on the Merits, ¶49. See Transcript (English), Day 1, 2 April 2013, 48:4- 48:13.
34Id., ¶66. See Transcript (English), Day 1, 2 April 2013, 48:14-48:17.
35See Purchase and Sale of Empresa para Sistemas Aislados ESA S.A. by and between Empresa Eléctrica Guaracachi S.A. and Rurelec PLC (Exhibit C-103).
36Initially, it can be noted that in the Statement of Claim, ¶67, the amount indicated is USD 41.2 million. However, as shown in the Memorial on Jurisdiction, ¶113, the Claimants have rectified such amount in the e-mail dated 12 September 2012. See- email (Exhibit R-2).
37Statement of Claim, ¶67; Claimants’ Post-Hearing Brief, ¶¶59-63. See Agreement for the purchase of shares (Exhibit R- 61); Certificate of Incorporation of Birdsong Overseas Limited (Exhibit C-30) and BIE (Exhibit C-25); Share certificates evidencing the shares in GAI held by Birdsong Overseas Limited (Exhibit C-29) and BIE (Exhibit C-27); Share certificate evidencing that Birdsong held 100% of the shares in BIE (Exhibit C-35). See Transcript (English), Day 1, 2 April 2013, 48:17-48:21.
38Memorial on Jurisdiction, ¶34; Respondent’s Post-Hearing Brief, ¶36.
39Statement of Claim, ¶70; Reply on the Merits, ¶¶41-43. See 2008 Annual Report of EGSA (Exhibit C-32, pp. 7, 22 and 25); 2009 Annual Report of EGSA (Exhibit C-36, pp.12 and 22). See Transcript (English), Day 1, 2 April 2013, 54:25-56:3.
40Reply on the Merits, ¶44.
41Statement of Defense, ¶¶73-74. See Audited Financial Statements of Empresa para Sistemas Aislados ESA S.A., 27 May 2004 (Exhibit C-100); Audited Financial Statements of Empresa para Sistemas Aislados ESA S.A., 30 May 2004 (Exhibit C- 102); Proof of fund transfer from Rurelec to GAI, 13 October 2004 and 4 March 2005 (Exhibit C-104).
42Id., ¶¶73-74.
43Id., ¶78; Reply on the Merits, ¶¶45-46. See Transcript (English), Day 1, 2 April 2013, 58:11-58:18, 59:2-61:18.
44Id., ¶88. On the CCGT project, consult also Claimants’ Post-Hearing Brief, ¶¶39-54.
45Id., ¶¶83-84; Reply on the Merits, ¶¶51-53. Concerning these projects, the Claimants refer to that performed in San Matías, arguing that the statements made by Mr Paz regarding the fact that the time of the nationalisation, EGSA had introduced no improvement whatsoever to the distribution of electricity in the area; it was not their responsibility pursuant to the Agreement for the supply of electricity to rural areas. See Transcript (English), Day 1, 2 April 2013, 56:18-58:10.
46Id., ¶87; Statement of Defense, ¶¶338-344.
47Memorial on jurisdiction, ¶¶122-125; Statement of Defense, ¶¶45-51; Respondent’s Post-Hearing Brief, ¶6. The Respondent provides the following as examples for such acts: the distribution of all of EGSA’s profits as dividends, the 2001 sale of the turbines GCH-3 and 5 decreasing production capacity by 40MW, the intent to decapitalize EGSA in 2004 by trying to transfer the 7 engines to the plants in Aranjuez and Karachipampa for the purposes of selling them to Rurelec together with ESA S.A or the intent to dismantle the KAR-1 unit in 2010; Rejoinder on the Merits, ¶50. See Transcript (English), Day 1, 2 April 2013, 157:5-157:9; Transcript (English), Day 6, 9 April 2013, 1420:18-1420:19.
48First Witness Statement of Paz, ¶¶64, 68, and 72.
49Reply on the Merits, ¶¶47-50. See Progress Report on the Combined Cycle Turbine Project, 26 March 2010 (Exhibit C-313). See Transcript (English), Day 1, 2 April 2013, 58:19-58:25, 61:19-62:2.
50Rejoinder on the Merits, ¶¶51-92. As examples of EGSA’s disinvestment, Respondent refers, inter alia, to the following scenarios: the sale of the GCH-3 and GCH-5 units (these were the most efficient units, and their sale was not aimed at installing more efficient technology, since the money obtained was distributed as profits among shareholders, and the Jenbacher engines were installed five years later), the attempt to remove the KAR-1 unit (decision reversed by the Board of EGSA after the nationalisation), the sale of the plot in the Santa Cruz industrial complex (challenged by ENDE representatives in the Board of EGSA) or the sale of the engines of the Aranjuez plant to ESA (according to the Respondent, for the purposes of finally selling them to Rurelec). As examples of EGSA’s difficult economic situation, the Respondent refers, inter alia, to the liquidity issues acknowledged by the Claimants themselves, the problems with payments to suppliers, the lack of generation of “robust” profits between 2005 and 2009, or the distribution of dividends higher than the profits since 2006. Finally, Bolivia denies the fact that EGSA received good ratings by rating agencies (in an attempt to confuse the Tribunal), and it is not true either that the rates at which EGSA could obtain funds until 2009 reflected a healthy economic condition.
51Statement of Claim, ¶¶9-15. See Transcript (English), Day 1, 2 April 2013, 63:13-64:16.
52Id., ¶¶9-15; Reply on the Merits, ¶2. See Transcript (English), Day 1, 2 April 2013, 23:7-25:16, 63:3-63:13, 64:17-64:23; Transcript (English), Day 6, 9 April 2013, 1359:21-1360:12.
53Reply on the Merits, ¶2. See Transcript (English), Day 6, 9 April 2013, 1407:10-1408:7.
54Rejoinder on the Merits, ¶¶130-132. See Transcript (English), Day 1, 2 April 2013, 187:14-187:21.
55Statement of Defense, ¶¶342-344, and 384-394; Rejoinder on the Merits, ¶¶293-297.
56Statement of Defense, ¶43; Respondent’s Post-Hearing Brief, ¶80. See Expropriation Insurance Agreement by and between Power Inc. and Overseas Private Investment Corporation, 27 December 1995 (Exhibit R-44).
57Id., ¶8, and Section 2.2.1; Rejoinder on the Merits, ¶¶99, 106, 109-114. See 2006-2010 Programa de Gobierno del Movimiento al Socialismo-Instrumento Político por la Soberanía de los Pueblos (MAS-IPSP) 2006-2010 “Bolivia digna, soberana y productiva para vivir bien” published in 2005 (Exhibit R-52); El plan de gobierno más progresista propone: Nacionalizar por etapas”, Bolpress, 11 November 2005 (Exhibit R-62); Letter of the Minister of Hydrocarbons and Electricity to EGSA, 21 April 2009 (Exhibit R-59). See Transcript (English), Day 1, 2 April 2013, 158:1-158:3, 183:9-184:3.
58Id., ¶¶69-81; Rejoinder on the Merits, ¶115.
59In the Statement of Claim, ¶104, the Claimants mention the existence of an e-mail sent by Marie Beatriz Souviron, Bolivian Ambassador in the United Kingdom, stating that she was unaware of the possibility of the expropriation of Rurelec’s interest in GAI. However, Respondent noted that such an e-mail was not submitted by the Claimants and that, if it had been submitted, it would still be insufficient evidence, since it would only prove an officer’s unawareness of the nationalisation plans; Rejoinder on the Merits, ¶¶116-117. The Respondent explains how Mr Earl has now modified his version: senior officers of the Ministry of Foreign Affairs of the United Kingdom would have confirmed that the Ambassador was unaware of the nationalisation. However, this is no evidence of the purported confirmation and, in any case, even if it existed, it would only demonstrate that a Bolivian diplomat in the United Kingdom was not aware of the nationalisation. Similarly, Mr Aliaga states that he received guaranteed from members of the Board of ENDE in a barbecue, without giving any names or explaining why guarantees given by EGSA employees would compromise the State.
60Set forth in Article 49 e) of the Electricity Law. In accordance with RPT 1995 and RPT 2001, it is defined as the unitary cost of increasing the installed capacity. It is tantamount to the Capacity Marginal Cost.
61Article 15 of the RPT 1995. In addition, once the investment cost has been determined one should proceed to carry out a number of operations detailed in the above mentioned order until de PBP is reached. See Transcript (English) Day 1, 2 April 2013, 46:19-46:21.
62For a further explanation on the modifications introduced, consult Memorial on Jurisdiction, ¶258.
63Operating Norm No. 19/2001, Rule 7; Statement of Claim, ¶90; Memorial on Jurisdiction, ¶259.
64Statement of Claim, ¶90.
65Memorial on Jurisdiction, ¶259.
66Id., ¶262.
67Statement of Claim, ¶91; Memorial on Jurisdiction, ¶270. See Transcript (English), Day 1, 2 April 2013, 64:23-64:25.
68Statement of Claim, ¶91; Reply on the Merits, ¶73; Claimants’ Post-Hearing Brief, ¶117; Compass Lexecon Report, ¶¶34- 38 and 126-136; Witness Statement of Aliaga, ¶39; Witness Statement of Andrade, ¶¶45-50. See Transcript (English), Day 1, 2 April 2013, 65:8-65:25.
69Memorial on Jurisdiction, ¶259.
70Id., ¶¶259-268. See Report prepared by Bates White LLC dated 18 January 2007 on Revision of Operating Norm No.19 (Exhibit R-34).
71Statement of Claim, ¶¶92-94; Memorial on Jurisdiction, ¶272; Reply on the Merits, ¶75; Claimants’ Post-Hearing Brief, ¶120. See Transcript (English), Day 1, 2 April 2013, 65:8-65:25.
72Article 63, ROME 1995; Article 2, RPT 1995. Pursuant to RPT 1995, the spot market is defined as “the market of short term electricity purchase and sale transactions, not having been contemplated in the supply agreements.”
73Payment that, for the Claimants in their Statement of Claim, ¶190, was uniform for all generating units, whereas for the Respondent, as per its Memorial on Jurisdiction, ¶228, such uniformity did not exist.
74Article 63, ROME 1995. Pursuant to Article 1 of ROME 1995, the Marginal Cost is defined as “the cost [...] to supply one additional kilowatt-hour (kWh) of power, at a certain level of power demand and considering the generation and transmission park to be fixed [...]” [Tribunal’s Translation].
75Statement of Claim, ¶45; Memorial on Jurisdiction, ¶218. Pursuant to Article 1 of ROME 1995, the Marginal Generation Unit is meant to be “the last generation unit capable of meeting a demand increase, dispatched by the CNDC in accordance with the procedures set forth in this Regulation” [Tribunal’s Translation. See Transcript (English), Day 1, 2 April 2013, 42:2- 42:3.
76Operating Norm No. 3/1999, paragraph 4.
77Article 1, ROME 2001. In this sense, the concept of “Forced Generation Unit” is introduced, such being understood as the “unit resulting from the generation in a mandatory way due to minimum performance requirements in an area, displacing lower cost generation in the system” [Tribunal’s Translation].
78Memorial on Jurisdiction, ¶¶226-227.
79In this sense, there is disagreement between the Parties. The Claimants consider in their Statement of Claim, ¶191, that until 2008 all thermal units were candidates for selection as the Marginal Generation Unit, a fact that is denied by the Respondent in its Memorial on Jurisdiction, ¶228, and in its Rejoinder on the Merits, ¶271, due to the above mentioned modifications. See Transcript (English), Day 1, 2 April 2013, 66:2-66:23.
80Statement of Claim, ¶96; Reply on the Merits, ¶77; Claimants’ Post-Hearing Brief, ¶109; Witness Statement of Aliaga, ¶37; Witness Statement of Andrade, ¶¶55-56; Second Witness Statement of Andrade, ¶23. See Transcript (English), Day 1, 2 April 2013, 66:24-68:5.
81Statement of Defense, ¶329; Second Witness Statement of Quispe, ¶13. Nevertheless, the Claimants allege in their Reply, ¶¶84-87, that such assertion is misleading. Mr Andrade contested when such modification was proposed and, consequently, EGSA cannot be understood to have approved it, see Second Witness Statement of Andrade, ¶37, and Minutes of Session No. 236 of the CNDC dated 30 June 2008 (Exhibit R-87). The Respondent considered that it accepted both in its Statement of Defense, ¶329, as well as in its Rejoinder on the Merits, ¶291, that Mr Andrade voted against such modification. Nevertheless, that is not the relevant issue, but that the CNDC is a self-regulatory authority that adopts norms by simple majority.
82Rejoinder on the Merits, ¶273.
83Memorial on Jurisdiction, ¶¶230-236; Statement of Defense, ¶¶316-323; Rejoinder on the Merits, ¶274
84Statement of Defense, ¶305.
85Reply on the Merits, ¶¶78-83; Second Witness Statement of Andrade, ¶33. Regarding the stabilization of tariffs, the Claimants hold that such fund did not affect the spot price level received by electricity generators as Bolivia suggests, and likewise, it is also erroneous that EGSA could indefinitely accumulate funds in the stabilization fund.
86Reply on the Merits, ¶79; Second Witness Statement of Andrade, ¶35.
87Rejoinder on the Merits, ¶¶279-280. See Transcript (English), Day 1, Tuesday, 2 April 2013, 253:17-255:5.
88Statement of Claim, ¶15; Reply on the Merits, ¶¶95-96; Claimants’ Post-Hearing Brieg, ¶3; First Witness Statement of Earl, ¶¶58-59. The Claimants insist that there was no certainty whatsoever to believe that expropriation was going to be imminent. In any event, when Evo Morales was elected and the platform for the nationalisation of hydrocarbons sector was concocted, there were no signals in 2005 that the electricity sector could be subjected to the strict state control. Not until the end did the Claimants realize that EGSA was going to be expropriated. In this regard, see First Witness Statement of Earl, ¶40; Second Witness Statement of Earl, ¶38, and 45; and Second Witness Statement of Aliaga, ¶¶53-57. See Transcript (English), Day 1, 2 April 2013, 21:22-22-22.
89Statement of Claim, ¶¶15, and 98; Reply on the Merits, ¶93; Claimants’ Post-Hearing Brief, ¶32.
90Statement of Defense, ¶¶85-86, and 89; Witness Statement of Paz, ¶82; Rejoinder on the Merits, ¶¶119-120. See Transcript (English), Day 1, 2 April 2013, 184:24-185:9; Day 6, 9 April 2013, 1412:20-1412:23, 1416:3:1416:4, 1416:12-1416:13, 1431:19:1432:2.
91See Nationalisation Decree (Exhibit C-3).
92Statement of Claim, ¶103; Statement of Defense, ¶101. See Transcript (English), Day 1, 2 April 2013, 184:17-184:23.
93Statement of Claim, ¶103; Reply on the Merits, ¶98. The Claimants hold that they did not take part in the valuation process and the results thereof were never disclosed. See Transcript (English), Day 6, 9 April 2013, 1329:4-1329:21.
94Id., ¶¶106-110; Witness Statement of Aliaga, ¶¶56-58; Witness Statement of Earl, ¶¶61-62; Witness Statement of Andrade, ¶64.
95Statement of Defense, ¶¶95-101. See “Profin valora acciones de Elfec”, Los Tiempos, 13 August 2010 (Exhibit R-81). See Transcript (English), Day 1, 2 April 2013, 185:10-186:6; Transcript (English), Day 6, 9 April 2013, 1801:5-1801:24.
96Id., ¶104. See Exhibit R-78.
97See Transcript (English), Day 1, 2 April 2013, 184:7-184:9, 186:10-186:17.
98Id., ¶¶114-115; Claimants’ Post-Hearing Briefs, ¶¶55-58. See EGSA’s 2010 Audited Financial Statements, 25 March 2011 (Exhibit C-209).
99Id., ¶¶114-115. See “Proyecto Ciclo Combinado ‘Enredado’ en la Situación Contable de EGSA” Reporte Energía No. 59, dated 16-30 June 2011 (Exhibit C-194); Witness Statement of Lanza, ¶¶54-55; Witness Statement of Blanco, ¶¶43-44.
100Id., ¶106; Bejarano’s Second Statement, ¶9; Rejoinder on the Merits, ¶¶121-128.
101Statement of Claim, ¶¶111-112. See Transcript (English), Day 1, 2 April 2013, 70:5-70:11.
102Statement of Claim, ¶113. See Freshfields’ note to the Attorney General (Procurador General del Estado), dated 25 October 2011 (Exhibit C-199); Freshfields’ note to the Attorney General (Procurador General del Estado), dated 29 November 2011 (Exhibit C-201).
103Rejoinder on the Merits, ¶¶416-422. See EGSA’s letter to Energais dated 26 February 2013 (Exhibit R-167).
104See Transcript (English), Day 1, 2 April 2013, 70:13-71:1.
105Respondent’s Post-Hearing Brief, ¶172. See Transcript (English), Day 1, 2 April 2013, 256:16-257:1.
106Memorial on Jurisdiction, ¶17; Respondent’s Post-Hearing Brief, ¶¶25-26, 30, and 35. See Transcript (English), Day 1, 2 April 2013, 161:14-162:4; Transcript (English), Day 6, 9 April 2013, 1418:22-1419:7.
107Id., ¶21; Notice of Arbitration, ¶¶57-63; Statement of Claim, ¶¶135-141.
108See Transcript (English), Day 1, 2 April 2013, 164:15-165:1.
109See Transcript (English), Day 1, 2 April 2013, 168:3-168:12.
110Memorial on Jurisdiction, ¶¶23-26.
111Counter-Memorial on Jurisdiction, ¶6.
112Id., ¶6. See Transcript (English), Day 1, 2 April 2013, 162:5-162:23.
113Reply on Jurisdiction, ¶22. See Transcript (English), Day 1, 2 April 2013, 167:13-168:2.
114Reply on Jurisdiction, ¶24.
115Id., ¶26. See ICS Inspection and Control Services Limited (United Kingdom) v. Argentine Republic (PCA Case No. 2010- 9), Award on Jurisdiction,10 February 2012 (Dupuy, Bernárdez and Lalonde) (Exhibit RL-29); Impregilo S.p.A v. Argentine Republic (ICSID Case No. ARB/07/17), Dissenting Opinion of Professor Brigitte Stern, 21 June 2011 (Exhibit RL-119).
116Id., ¶¶27-31. In such regard, the Respondent believes that Lauder and CME cases illustrate this situation, since, in such cases, investors instituted two different arbitrations against the Czech Republic under two different treaties, as the Czech Republic had only consented thereto. Hence, had investors in such cases wished to consolidate the proceedings, they should have had the express consent of the State, given that the applicable treaties did not contain the consent of the State to the joinder. Likewise, in Pan American case, the Respondent maintains that claimants distort its content, since the tribunal never stated that, had claimants chosen to commence a single proceeding instead of two, they would not have needed Argentina’s consent.
117Counter-Memorial on Jurisdiction, ¶7.
118Reply on Jurisdiction, ¶33.
119Id., ¶38.
120Id., ¶40; Respondent’s Post-Hearing Brief, ¶33. See Transcript (English), Day 1, 2 April 2013, 166:1-166:19; Transcript (English), Day 6, 9 April 2013, 1419:25-1420:5.
121See Duke Energy Electroquil Partners & Electroquil S.A. v. Ecuador (ICSID Case No. ARB/04/19), Award, 18 August 2008 (Kaufmann-Kohler, Pinzón and van den Berg) (Exhibit CL-53).
122Reply on Jurisdiction, ¶46(c); Respondent’s Post-Hearing Brief, ¶31.
123Id., ¶42; Respondent’s Post-Hearing Brief, ¶34. See Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005 (Salans, van den Berg and Veeder) (Exhibit CL-110). See Transcript (English), Day 1, 2 April 2013, 163:8-163:15.
124Id., ¶44.
125Counter-Memorial on Jurisdiction, ¶12.
126See Transcript (English), Day 1, 2 April 2013, 170:9-170:18.
127Counter-Memorial on Jurisdiction, ¶6. See Canfor Corporation v. United States of America; Terminal Forest Products Ltd. v. United States of America (UNCITRAL Case), Order of the Consolidation Tribunal, 7 September 2005, (van den Berg, Robinson and L.C de Mestral) (Exhibit CL-115).
128As explained by the Claimants at ¶6(a) and (b) of the Counter-Memorial on Jurisdiction, the case Pan American Energy LLC and BP Argentina Exploration Company v. The Argentine Republic, (ICSID Case No. ARB/03/13), Decision on Preliminary Objections, 27 July 2006, and the case CME Czech Republic B.V. v. The Czech Republic (UNCITRAL Case), Partial Award, 13 September 2001, cited by Bolivia, refer to arbitrations in which the claimants filed two different arbitration proceedings and then requested the consolidation thereof. However, in this case, the Claimants have not filed two different requests for arbitration, but have acted jointly.
129Claimants’ Post-Hearing Brief, ¶68. See Transcript (English), Day 6, 9 April 2013, 1355:17-1356:1.
130Counter-Memorial on Jurisdiction, ¶¶8-9; Claimants’ Post-Hearing Brief, ¶¶74, and 76. See Piero Foresti, Laura de Carli and others v. The Republic of South Africa (ICSID Case No. ARB(AF)/07/1), Award, 4 August 2010 (Lowe, Browner and Matthews) (Exhibit CL-134); OKO Pankki OYJ, VTB Bank (Germany) AG and Sampo Bank Plc v. Republic of Estonia (ICSID Case No. ARB/04/6), Award, 19 November 2007 (Wijnen, Fortier and Veeder) (Exhibit CL-120); Itera International Energy LLC and Itera Group NV v. Georgia (ICSID No. ARB/08/7), Decision on Admissibility of Ancillary Claims, 4 December 2009 (Danelius, Orrego Vicuña and Stern) (Annex CL-128); Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A. v. The Argentine Republic (ICSID Case No. ARB/03/17), Decision on Jurisdiction, 16 May 2006 (Salakuse, Kaufmann-Kohler and Nikken) (Exhibit CL-117); Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12), Decision on the Respondent’s Preliminary Objections, 2 August 2010 (Veeder, Tawil and Stern) (Exhibit CL-133); Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan (ICSID Case No. ARB/05/16), Award, 29 July 2008 (Boyd, Lalonde and Hanotiau) (Exhibit CL-52); Duke Energy Electroquil Partners & Electroquil S.A. v. Ecuador (ICSID Case No. ARB/04/19), Award, 18 August 2008 (Kaufmann Kolher, Gómez Pinzón and van den Berg) (Exhibit CL-53); Perenco Ecuador Ltd. v. The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador) (ICSID Case No. ARB/08/06), Decision on Jurisdiction, 30 June 2011 (Tomka, Kaplan and Thomas) (Exhibit CL-137).
131Memorial on Jurisdiction, ¶29.
132Counter-Memorial on Jurisdiction, ¶10; Claimants’ Post-Hearing Brief, ¶¶72-73.
133Id., ¶¶11-13; Claimants’ Post-Hearing Brief, ¶77. See Transcript (English), Day 1, 2 April 2013, 136:16-138:16.
134Rejoinder on Jurisdiction, ¶¶5-7. In this regard, the Claimants cite several cases in support of their argument, such as Chevron Corporation and Texaco Petroleum Company v. The Republic of Ecuador (PCA Case No. 34877), Sergei Paushok, CJSC Golden East Company and CJSC Vostokneftegaz Company v. Mongolia (UNCITRAL Arbitration), and Abaclat and others v. The Argentine Republic (ICSID Case No. ARB/07/5), Decision on Jurisdiction and Admissibility, 4 August 2011. See Transcript (English), Day 1, 2 April 2013, 136:24-137:9; Transcript (English), Day 6, 9 April 2013, 1356:13-1356:15.
135See Transcript (English), Day 6, 9 April 2013, 1357:22-1358:21.
136Rejoinder on Jurisdiction, ¶11.
137Claimants’ Post-Hearing Brief, ¶¶64-66. See Transcript (English), Day 6, 9 April 2013, 1353:15-1355:6.
138Memorial on Jurisdiction, ¶¶35-37; Respondent’s Post-Hearing Brief, ¶38. See Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce (SCC) Case No. 80/2005), Final Award, 26 March 2008 (Cremades, Runeland and Soderlund) (Exhibit RL-34); Salini Construttori S.P.A. and Italstrade S.P.A v. Jordania (ICSID Case No. ARB/02/13), Award, 31 January 2006 (Guillaume, Cremades, Sinclair) (Exhibit RL-35); Hussein Nuaman Soufraki v. United Arab Emirates (ICSID Case No. ARB/02/07), Award, 7 July 2004 (Fortier, Schwebel and El-Khoseri) (Exhibit RL-37); Phoenix Action, Ltd. v. Czech Republic (ICSID Case No. ARB/06/5), Award, 15 April 2009 (Stern, Bucher and Fernández-Armesto) (Exhibit RL-38); Brandes Investment Partners, LP v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/08/3), Decision on the Respondent’s Objection Under Rule 41(5) of the ICSID Arbitration Rules, 2 February 2009 (Briner, Stern and Böckstiegel) (Exhibit RL-39); Inceysa Vallisoletana S.L. v. Republic of El Salvador (ICSID Case No. ARB/03/26), Award, 2 August 2006 (Oreamuno Blanco, Landy and von Wobeser) (Exhibit RL-40).
139The Respondent believes that it is such date that should be taken as a reference, rather than the date alleged by the Claimants, as it appears on the Share Certificate that evidences the ownership interests of Birdsong Overseas Limited in BIE (Exhibit C-35).
140Memorial on Jurisdiction, ¶51. See Certificate of Incorporation of Bolivia Integrated Energy Limited (Exhibit C-25); Certificate of Incorporation of Birdsongs Overseas Limited (Exhibit C-29).
141Id., ¶62; Article I(4) of the US-Bolivia BIT.
142Id., ¶75. See Aguas del Tunari S.A. v. Republic of Bolivia (ICSID Case No. ARB/02/3), Decision on Respondent’s Objections to Jurisdiction, 21 October 2005 (D. Caron, Alberro-Semerena and C. Alvarez) (Exhibit RL-28).
143Memorial on Jurisdiction, Section 3.2.2; Reply on Jurisdiction, ¶¶77-82; Counter-Memorial on Jurisdiction, ¶¶22-31.
144Reply on Jurisdiction, ¶¶83-87. See Siemens A.G. v. The Argentine Republic (ICSID Case No. ARB/02/8), Decision on Jurisdiction, 3 August 2004 (Sureda, Brower and Janeiro) (Exhibit CL-109); Cemex Caracas Investments B.V. and Cemex Caracas II Investments B.V. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/08/15), Decision on Jurisdiction, 30 December 2010 (Guillaume, Abi-Saab and von Mehren) (Exhibit CL-136). In this respect, in its allegations on 14 January 2013, the Respondent denies that the case Teinver S.A. v. The Argentine Republic (ICSID Case No. ARB/90/1), Decision on Jurisdiction, 21 December 2011 (Exhibit CL-151), supports the Claimants’ position on this issue since: (i) bilateral investment treaties are not identical in specific aspects which are relevant to these proceedings; and (ii) the Decision applies a pro-investor principle that has not been justified by said tribunal.
145Memorial on Jurisdiction, ¶¶85-89; Respondent’s Post-Hearing Brief, ¶43.
146Id., ¶¶91-96. See Romak S.A. v. Uzbekistan (UNCITRAL Case-PCA No. AA280), Award, 26 November 2009 (Mantilla- Serrano, Rubins and Molfessis) (Exhibit RL-54); GEA Group Aktiengesellschaft v. Ukraine (ICSID Case No. ARB/08/16), Award, 31 March 2011 (van den Berg, Landau and Stern) (Exhibit RL-55); Alps Finance and Trade AG v. Slovakia (UNCITRAL Case), Award, 5 March 2011 (Stuber, Klein and Crivellaro) (RL-56).
147Counter-Memorial on Jurisdiction, ¶¶37-41.
148See White Industries Australia Limited v. India (UNCITRAL Case), Award, 30 November 2011 (Brower, Lau and Rowley) (Exhibit CL-73).
149Reply on Jurisdiction, ¶95.
150See Romak S.A. v. Uzbekistan (UNCITRAL Case-PCA No. AA280), Award, 26 November 2009 (Mantilla-Serrano, Rubins and Molfessis) (Exhibit RL-54); Alps Finance and Trade AG v. Slovakia (UNCITRAL Case), Award, 5 March 2011 (Stuber, Klein and Crivellaro) (Exhibit RL-56).
151See Transcript (English), Day 1, 2 April 2013, 171:9-172:10; Transcript (English), Day 6, 9 April 2013, 1420:19-1421:1.
152Reply on Jurisdiction, ¶¶101-102, and 109; Respondent’s Post-Hearing Brief, ¶37.
153Id., ¶¶103-112. In this regard, the Respondent establishes that there is no evidence whatsoever that Rurelec has paid USD 35 million for the shares in EGSA. Also, the investments in generation equipment were made without the Claimants’ own capital contribution. As regards the alleged technical support mentioned by the Claimants in their Counter-Memorial on Jurisdiction, ¶33, no evidence has been submitted and, in any case, the technical support received by EGSA came from abroad, through subcontractors from Independent Power Operation Ltd. (See Exhibit R-103). Moreover, at least 4 out of the 7 Jenbacher engines (which Claimants include as Rurelec’s contribution) have belonged to EGSA since April 2005, that is, several months prior to Rurelec’s alleged investment in Bolivia. Ultimately, as claimed by the Respondent, it is not true that Rurelec’s conduct has helped remedying the difficult financial situation of EGSA, as its indebtedness had been evident since 2008. Fitch Ratings had downgraded EGSA’s credit rating and by 2009 it had exhausted all its financing sources, with USD 3 millions of cash in 2010. This, coupled with the distribution of dividends qualified as “conservative” by the Claimants, led to a decapitalization of EGSA (See Exhibits R-104, 105 and 106). See Transcript (English), Day 1, 2 April 2013, 172:11- 173:19.
154Memorial on Jurisdiction, ¶¶116-127.
154Counter-Memorial on Jurisdiction, ¶¶17-19.
157Counter-Memorial on Jurisdiction, ¶17.
158Reply on Jurisdiction, ¶¶59-61; Respondent’s Post-Hearing Brief, ¶¶38-41. As regards the agreement (Exhibit R-61), Bolivia states that it does not show whether a payment has been made. It provides for some deferred payments but it is uncertain whether they have been made or not. Moreover, the last payment was scheduled for 2008, which makes it impossible for the 2006 Share Transfer (Exhibit C-214) to prove any payment (a total of USD 35 millions) in 2006 if the aggregate amount had not yet been paid. The same happens with Rurelec’s press release (Exhibit C-215).
159Letter from Nerine Fiduciaries to Freshfields dated 26 October 2012 (Exhibit C-226).
160Reply on Jurisdiction, ¶69. The Respondent considers that the Claimants have just established that Birdsong was organized in December 2005 and that Rurelec owned one share at a par value of USD 1 (Exhibits C-29 and 30). However, said documents fail to show how many shares form Birdsong’s capital, which makes it impossible to determine Rurelec’s percentage interest thereon.
161Id., ¶¶62-65.
162Id., ¶71.
163Statement of Claim, ¶70; Counter-Memorial on Jurisdiction, ¶15.
164Examples of documents include: (i) EGSA’s annual reports on stock ownership by Rurelec since the investment, (ii) the position of Peter Earl —Director of Rurelec— as President of the Board of Directors of EGSA in 2006, and (iii) different press releases which mention the investments made in Bolivia for power generation.
165Counter-Memorial on Jurisdiction, ¶¶17-19; Claimants’ Post-Hearing Brief, ¶95. See Transcript (English), Day 1, 2 April 2013, 138:17-140:4.
166See Transcript (English), Day 6, 9 April 2013, 1350:22-1353:4.
167Counter-Memorial on Jurisdiction, ¶¶23-26. See Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. The Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Buergenthal, Alvarez and Hossain) (Exhibit CL-151); Siemens A.G. v. The Argentine Republic (ICSID Case No. ARB/02/8), Decision on Jurisdiction, 3 August 2004 (Sureda, Brower and Janeiro) (Exhibit CL-109); Ioannis Kardassopoulos v. Georgia (ICSID Case No. ARB/05/18), Decision on Jurisdiction, 6 July 2007 (Fortier, Orrego Vicuña and Watts) (Exhibit CL-119); Mobil Corporation, Venezuela Holdings, B.V. and others v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/08/27), Decision on Jurisdiction, 10 June 2010 (Guillaume, Kaufmann-Kohler and El-Kosheri) (Exhibit CL-131); Mr. Tza Yap Shum v. Republic of Peru (ICSID Case No. ARB/07/6), Decision on Jurisdiction and Competence, 19 June 2009 (Fernández- Armesto, Otero and Kessler) (Exhibit CL-124). See Transcript (English), Day 1, 2 April 2013, 140:17-141:9; Transcript (English), Day 6, 9 April 2013, 1368:9-1368:21.
168Rejoinder on Jurisdiction, ¶¶20-22.
169Rejoinder on Jurisdiction, ¶¶23-25. The Claimants consider that the Anglo Iranian Oil case cited by the Respondent to support its argument at ¶72 of its Objections, makes no reference to the concept of direct or indirect investment. Moreover, Bolivia’s argument that the cases cited by the Respondent should be disregarded because they do not involve the UK-Bolivia BIT or any other treaties executed by Bolivia, should not be accepted since the provisions analyzed in those cases are substantially the same as those under the UK-Bolivia BIT. For more reference to those cases, see Counter-Memorial on Jurisdiction, ¶¶23-26. See also the Claimants’ allegations on 2 January 2013 about the case Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. The Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151).
170Counter-Memorial on Jurisdiction, ¶28. See Cemex Caracas Investments B.V. and Cemex Caracas II Investments B.V. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/08/15), Decision on Jurisdiction, 30 December 2010 (Guillaume, Abi-Saab and von Mehren) (Exhibit CL-136).
171Counter-Memorial on Jurisdiction, ¶¶29-30. See C.H. Schreuer, “Shareholder Protection in International Investment Law”, Transnational Dispute Management, Volume 2, Issue 3, 8 May 2005 (Exhibit CL-112); Inmaris Perestroika Sailing Maritime Services GMBH and others v. Ukraine (ICSID Case No. ARB/08/08), Decision on Jurisdiction, 8 March 2010 (Alexandrov, Cremades, Rubins) (Exhibit CL-130).
172See Transcript (English), Day 1, 2 April 2013, 141:19-142:2.
173Rejoinder on Jurisdiction, ¶¶27-28.
174For example, they also cite the payment of USD 35 million for the acquisition of EGSA in 2006, an estimated investment of USD 110 million to increase EGSA’s efficiency (through a 185 MW increase), as well as the introduction of a new technology which entailed an increase of EGSA’s power generation capacity. See Statement of Claim, ¶¶70-79; Counter- Memorial on Jurisdiction, ¶33. See Transcript (English), Day 1, 2 April 2013, 142:3-142:17.
175Counter-Memorial on Jurisdiction, ¶34.
176Id., ¶37.
177Id., ¶40. See Article 1(b) of the UK-Bolivia BIT (Exhibit C-1).
178Counter-Memorial on Jurisdiction, ¶42(a)(b). The Claimants refer here to the cases Romak S.A. v. Uzbekistan (UNCITRAL-PCA Case No. AA280), Award, 26 November 2009 (Mantilla-Serrano, Rubins and Molfessis) (Exhibit RL- 54); Alps Finance and Trade AG v. Slovakia (UNCITRAL Case), Award, 5 March 2011 (Stuber, Klein and Crivellaro) (Exhibit RL-56).
179Counter-Memorial on Jurisdiction, ¶42 (c)(d).
180Id., ¶43; Second Witness Statement of Blanco, ¶¶6 and 21
181Counter-Memorial on Jurisdiction, ¶44. See Romak S.A. (Switzerland) v. Republic of Uzbekistan (UNCITRAL Case), Award, 26 November 2009 (Mantilla-Serrano, Rubins and Molfessis) (Exhibit RL-54).
182Counter-Memorial on Jurisdiction, ¶45. See Fedax N.V. v. Republic of Venezuela (ICSID Case No. ARB/96/3), Decision on Jurisdiction, 11 July 1997 (Orrego Vicuña, Meir Helt, B. Owen) (Exhibit CL-101).
183Reply on Jurisdiction, ¶114.
184See Quiborax S.A., Non Metallic Minerals S.A. and Allan Fosk Kaplun v. Plurinational State of Bolivia (ICSID Case No. ARB/06/2), Decision on Jurisdiction, 27 September 2012 (Kaufmann-Kohler, Lalonde and Stern) (Exhibit CL-132).
185Rejoinder on Jurisdiction, ¶¶30-31; Claimants’ Post-Hearing Brief, ¶96.
186Id., ¶32.
187Counter-Memorial on Jurisdiction, ¶46.
188Memorial on Jurisdiction, ¶¶138-139. See Transcript (English), Day 1, 2 April 2013, 143:7-143:21,174:12-175:1.
189Memorial on Jurisdiction, ¶¶130-142.
190Counter-Memorial on Jurisdiction, ¶¶51-52.
191Reply on Jurisdiction, ¶122-124. See Ulysseas Inc. v. Republic of Ecuador (UNCITRAL-PCA Case No. 2009-19), Interim Award, 28 September 2010 (Bernardini, Pryles and Stern) (Exhibit CL-135); Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12), Decision on the Respondent’s Jurisdictional Objections, 1 June 2012 (Veeder, Twail and Stern) (Exhibit CL-140). See Transcript (English), Day 1, 2 April 2013, 178:25-179:3, 179:23-181:2; Transcript (English), Day 6, 9 April 2013, 1428:2-1428:6.
192Counter-Memorial on Jurisdiction, ¶52.
193Reply on Jurisdiction, ¶¶127-129. See Transcript (English), Day 1, 2 April 2013, 178:12-178:18, 181:3-181:23, 179:12- 179:15.
194Counter-Memorial on Jurisdiction, ¶56; Respondent’s Post-Hearing Brief, ¶53.
195Reply on Jurisdiction, ¶¶132-137. The Respondent refers to the Bidding Rules (Exhibit C-7), which define “Stock Subscribing Company” as “the company that shall subscribe the Subscription Shares” (Article 1) [Tribunal’s Translation]. Moreover, Article 2.1 stated that “the bidding company may be: 2.1.1 Electricity Company [...] 2.1.2 Consortium of Related Companies [...] 2.1.3 Specific Company. A juridical person constituted exclusively for the purposes of participating in the bid, which could be the Stock Subscribing Company. 2.1.4 Other Consortiums. Article 2.3 provided that “the Qualified Bidder that is declared the winning bidder must constitute, if necessary, prior to the Closing Date, the Stock Subscribing Company” (Article 2.3) and, finally, in the Closing Deed, the Stock Subscribing Company shall subscribe the Subscription Shares (Article 8.3). In turn, the Capitalization Agreement uses a similar definition of Stock Subscribing Company: “the company which subscribes to the shares under the Agreement” (Article 3) and “undertakes to pay to the Company the Subscription Amount” (Article 5.1) [Tribunal’s Translation]. See Transcript (English), Day 1, 2 April 2013, 175:21-176:6; Transcript (English), Day 6, 9 April 2013, 1428:22-1429:7.
196Counter-Memorial on Jurisdiction, ¶62.
197The tribunal in Pac Rim Cayman LLC v. El Salvador (ICSID Case No. ARB/09/12), Decision on the Respondent’s Jurisdictional Objections, 1 June 2012 (Veeder, Tawil and Stern) (Exhibit CL-140), considered that a traditional “holding company” is a company created in order to “own shares in its groups of companies, with attendant benefits as to control, taxation and risk Management for the holding company’s group of companies.” However, according to said tribunal, the fact that a company is organized in the United States for the sole purpose of holding shares in foreign companies indicates that such company is not a “traditional holding company” and fails to meet the essential condition of carrying out material businesses in its home country.
198Reply on Jurisdiction, ¶144. The activities mentioned by the Claimants, which the Respondent considers insufficient and/or inexistent are: (a) maintaining a “registered office” and a “principal office” in Akron, Ohio, as the Delaware General Corporation Law requires having an address in such state (See Exhibit R-107). Moreover, the office in Akron does not belong to GAI, but to FirstEnergy; (b) having appointed an agent in the State of Delaware is also a legal requirement under the General Corporation Law; (c) holding shareholders’ meetings is also mandatory under the General Corporation Law, and the only meetings held were those prior to FirstEnergy’s disinvestment in 2003 (no meeting-related documents have been submitted thereafter); (d) no meetings of the board of directors have been held since 2003 (only an extraordinary meeting of the board of directors was held in 2008 in order to the adopt solutions required by the CAF as a precondition for a credit disbursement); and (e) as regards the appointment of its administrators, the same happens, as since the end of 2003 there has been just one administrator appointed (in 2008) (Exhibit C-230).
199Reply on Jurisdiction, ¶146; Respondent’s Post-Hearing Brief, ¶¶50-53, 58.
200See Transcript (English), Day 1, 2 April 2013, 176:15-177:24; Transcript (English), Day 6, 9 April 2013, 1428:8-1428:18.
201Counter-Memorial on Jurisdiction, ¶¶52-55. See Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005 (Salans, van den Berg and Veeder) (Exhibit CL-110); Hulley Enterprises Limited (Cyprus) v. The Russian Federation (PCA Case No. AA226), Award on Jurisdiction and Admissibility, 30 November 2009 (Fortier, Poncet and Schwebel) (Exhibit CL-125); Veteran Petroleum Limited (Cyprus) v. The Russian Federation (CPA Case No. AA228), Award on Jurisdiction and Admissibility, 30 November 2009 (Fortier, Poncet and Schwebel) (Exhibit CL-126); Yukos Universal Limited (Isle of Man) v. The Russian Federation (CPA Case No. AA227), Award on Jurisdiction and Admissibility, 30 November 2009, (Fortier, Poncet and Schwebel) (Exhibit CL-127). See Transcript (English), Day 6, 9 April 2013, 1362:2-1367:19.
202Id., ¶¶56-58;. See Transcript (English), Day 1, 2 April 2013, 143:22-144:19; Transcript (English), Day 6, 9 April 2013, 1360:22-1360:25, 1362:2-1367:19.
203Id., ¶¶61-62; Claimants’ Post-Hearing Brief, ¶84. See Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12), Decision on the Respondent’s Jurisdictional Objections, 1 June 2012 (Veeder, Tawil and Stern) (Exhibit CL- 140); Petrobart Limited v. The Kyrgyz Republic (SSS Case No. 126/2003), Award, 29 March 2005, (Danelius, Bring and Smets) (Exhibit CL-111). See Transcript (English), Day 1, 2 April 2013, 144:19-145:7; Transcript (English), Day 6, 9 April 2013, 1360:20-1361:18.
204See Counter-Memorial on Jurisdiction, Section IV.
205Reply on Jurisdiction, ¶122.
206Rejoinder on Jurisdiction, ¶37.
207Id., ¶¶38-39. See Compañía de Aguas Del Aconquija S.A. and Vivendi Universal S.A. v. The Argentine Republic (ICSID Case No. ARB/97/3), Resubmitted Case, Decision on Jurisdiction, 14 November 2005 (Kaufmann-Kohler, Bernal Verea and Rowley) (Exhibit CL-145).
208Id., ¶40.
209Id., ¶¶41-42. See Transcript (English), Day 6, 9 April 2013, 1362:2-1367:19.
210Reply on Jurisdiction, ¶140.
211Rejoinder on Jurisdiction, ¶40.
212Memorial on Jurisdiction, ¶¶159-165; Respondent’s Post-Hearing Brief, ¶60. See Transcript (English), Day 6, 9 April 2013, 1429:14-1430:1.
213Id., ¶170.
214Id., ¶¶171-175. See Burlington Resources Inc. v. Republic of Ecuador (ICSID Case No. ARB/08/5), Decision on Jurisdiction, 2 June 2010 (Kaufmann-Kohler, Stern and Orrego Vicuña) (Exhibit RL-17); Murphy Exploration and Production Company International v. Republic of Ecuador (ICSID Case No. ARB/08/04), Award on Jurisdiction, 15 December 2010 (Oreamuno Blanco, Grigera Naón and Vinuesa) (Exhibit RL-60); Argentine Republic v. BG Group PLC, Decision on Annulment of the U.S Court of Appeals in and for the District of Columbia, 17 January 2012 (Judge Rogers) (Exhibit RL-61); Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic (ICSID Case No. ARB/01/3), Decision on Jurisdiction, 14 January 2004 (Orrego Vicuña, Gros Espiell and Tschanz) (Exhibit RL-16).
215See ¶236 infra.
216Memorial on Jurisdiction, ¶155.
217See Murphy Exploration and Production Company International v. Republic of Ecuador (ICSID Case No. ARB/01/8), Award on Jurisdiction, 15 December 2010 (Oreamuno Blanco, Grigera Naón and Vinuesa) (Exhibit RL-60).
218 Respondent’s Post-Hearing Brief, ¶63. See Transcript (English), Day 1, 2 April 2013, 244:8-245:12.
219Statement of Claim, ¶138; Notice of Arbitration; GAI’s Notice of Claim to President Evo Morales, 13 May 2010 (Exhibit C-39).
220Reply on Jurisdiction, ¶¶158-163. See Burlington Resources Inc. v Republic of Ecuador (ICSID Case No. ARB/08/4), Award on Jurisdiction, 2 June 2010 (Kaufmann-Kohler, Stern and Orrego Vicuña) (Exhibit RL-17); Murphy Exploration and Production Company International v. Republic of Ecuador (ICSID Case No. ARB/01/8), Award on Jurisdiction, 15 December 2010 (Oreamuno Blanco, Grigera Naón and Vinuesa) (Exhibit RL-60).
221 Reply on Jurisdiction, ¶167. See Daimler Financial Services AG v. Argentine Republic (ICSID Case No. ARB/05/1), Award, 22 August 2012 (Dupuy, Brower and Janeiro) (Exhibit RL-118); Iberdrola Energía, S.A. v. Republic of Guatemala (ICSID Case No. ARB/09/5), Award, 17 August 2012 (Zuleta, Oreamuno and Derains) (Exhibit RL-22); ICS Inspection and Control Services Limited (United Kingdom) v. Argentine Republic (UNCITRAL Case-PCA Case No. 2010-9), Award on Jurisdiction, 10 February 2012 (Dupuy, Bernárdez and Lalonde) (Exhibit RL-29); Abaclat et al v. Argentine Republic (ICSID Case No. ARB/07/5), Dissenting Opinion of Professor Georges Abi-Saab, 28 October 2011 (Exhibit RL-121); Impregilo S.p.A v. Argentine Republic (ICSID Case No. ARB/07/17), Dissenting Opinion of Professor Brigitte Stern, 21 June 2011 (Exhibit RL-119); Noble Energy, Inc. and Machalapower CIA. LTDA v. Ecuador and Consejo Nacional de Electricidad (ICSID Case No. ARB/05/12), Decision on Jurisdiction, 5 March 2008 (Kaufmann Kohler, Cremades and Alvarez) (Exhibit RL-20).
222See Transcript (English), Day 1, 2 April 2013, 245:13-246:16; Transcript (English), Day 6, 9 April 2013, 1429:14-1430:1.
223Reply on Jurisdiction, ¶168. In addition, the Respondent relies on various precedents supporting its argument: Eduardo Vieira v. Republic of Chile (ICSID Case No. ARB/04/7), Award, 21 August 2007 (Wobeser, Zalduendo and Reisman) (Exhibit RL-125); Asian Agricultural Products Ltd. v. Sri Lanka (ICSID Case No. ARB/87/3), Award, 27 June 1990 (El- Kosheri, Goldman and Asante) (Exhibit CL-10).
224Id., ¶169. See ICS Inspection and Control Services Limited (United Kingdom) v. Argentine Republic (UNCITRAL Case- PCA Case No. 2010-9), Award on Jurisdiction, 10 February 2012 (Dupuy, Bernárdez and Lalonde) (Exhibit RL-29).
225The Respondent notes that in their Counter-Memorial on Jurisdiction, ¶¶64, 72, and 73, the Claimants have only affirmed that Bolivia made no attempt to amicably settle the New Claims, that negotiations on nationalisation were unsuccessful and that Bolivia’s stance in this arbitration confirms the scarce possibilities that an agreement would have been reached. See ¶236 infra. Additionally, the Respondent considers in its allegations of 14 January 2013 that Teinver S.A. v. Argentine Republic (ICSID Case No. ARB/90/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151), reinforces Bolivia’s stance in this respect. This is so because the circumstances of such case and of this case are very different: here, there has been no kind of negotiation on the New Claims (unlike in the mentioned case). Therefore, the prior negotiation requirement has not been observed. See Transcript (English), Day 1, 2 April 2013, 246:17-247:15.
226Respondent’s Post-Hearing Brief, ¶¶64-65.
227Reply on Jurisdiction, ¶¶176-177. See ¶236 infra.
228Counter-Memorial on Jurisdiction, ¶¶63, 73, and 78. See ¶234 infra. In this regard, in its allegations of 14 January 2013, the Respondent contradicts the position of Claimants concerning Teinver S.A. v. Argentine Republic. According to the Respondent, what is decisive in this concern is for the claims to relate to the same object; without the tribunal defining what should be considered as such. In any case, the New Claims have no relation whatsoever to nationalisation. See Transcript (English), Day 6, 9 April 2013, 1430:1-1430:9.
229Reply on Jurisdiction, ¶179. See Transcript (English), Day 1, 2 April 2013, 248:20-248:22.
230Counter-Memorial on Jurisdiction, ¶70. See ¶234 infra.
231Reply on Jurisdiction, ¶180; Respondent’s Post-Hearing Brief, ¶66. See Transcript (English), Day 1, 2 April 2013, 248:24-249:11.
232Id., ¶181.
233Id., ¶182.
234See Empresas Lucchetti, S.A. and Lucchetti Peru, S.A. v. Republic of Peru (ICSID Case No. ARB/03/4), Award, 7 February 2005 (Buergenthal, Cremades and Paulsson) (Exhibit RL-126).
235Reply on Jurisdiction, ¶186. See Transcript (English), Day 1, 2 April 2013, 247:23-248:20.
236Id., ¶187.
237Id., ¶188; Statement of Claim, ¶254.
238Reply on Jurisdiction, ¶191.
239Statement of Claim, ¶¶105-110.
240Counter-Memorial on Jurisdiction, ¶¶79-80, and 192.
241Counter-Memorial on Jurisdiction, ¶79.
242Reply on Jurisdiction, ¶193.
243See Transcript (English), Day 1, 2 April 2013, 145:11-145:12; Transcript (English), Day 6, 9 April 2013, 1359:21- 1360:12.
244The UK-Bolivia BIT establishes that once an agreement has not been reached after the amicable consultation period and six months have passed since one of the parties notified the other of the existence of the dispute, the relevant arbitration may be commenced. On the contrary, the US-Bolivia BIT simply refers to the lapse of three months for any of the parties to submit the dispute to mandatory arbitration, with no additional requirements.
245Counter-Memorial on Jurisdiction, ¶¶68-71. See Abaclat and others v. Argentine Republic (ICSID Case No. ARB/07/5), Decision on Jurisdiction and Admissibility, 4 August 2011 (Tercier, Abi-Saab and van den Berg) (Exhibit CL-138); Biwater Gauff (Tanzania) Ltd. v. Tanzania (ICSID Case No. ARB/05/22), Award, 24 July 2008 (Born, Landau and Hanotiau) (Exhibit CL-51); Bayindir Insaat Turizm Ticaret ve Sanayi A.S v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13), Decision on Jurisdiction, 14 November 2005, (Kaufmann Kohler, Berman and Böckstiegel) (Exhibit CL-116); SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13), Decision on Jurisdiction, 6 August 2003, (P.Feliciano, Faurès and Thomas) (Exhibit CL-107); Ronald S. Lauder v. Czech Republic (UNCITRAL Case), Award, 3 September 2001 (Briner, Klein and Cutler) (Exhibit CL-23); Link-Trading Joint Stock Company v. Consumer Control Department of the Republic of Moldavia, Award on Jurisdiction, 16 February 2001 (Hertzfeld, Buruiana and Zykln) (Exhibit CL-105); Wena Hotels Limited v. Republic of Egypt (ICSID Case No. ARB/98/4), Summary of the Tribunal ́s Minutes, 25 May 1999 (Leigh, Fadlallah and Haddad) (Exhibit CL-103); Frank J. Sedelmayer v. Russian Federation, Award, 7 July 1998 (Exhibit CL-102); Ethyl Corporation v. Government of Canada, Award on Jurisdiction, 24 June 1998 (Böckstiegel, Brower and Lalonde) (Exhibit RL-5). See Transcript (Spanish), Day 1, 2 April 2013, 1359:1-1359:4.
246Id., ¶¶73-75.
247Id., ¶¶75-76. See Generation Ukraine, Inc. v. Ukraine (ICSID Case No. ARB/00/9), Award, 16 September 2003 (Salpius, Voss and Paulsson) (Exhibit RL-24); Swisslion DOO Skopje v. Former Yugoslav Republic of Macedonia (ICSID Case No. ARB/09/16), Award, 6 July 2012 (Guillaume, Price and Thomas) (Exhibit CL-142); CMS Gas Transmission Company v. Argentine Republic (ICSID Case No. ARB/01/8), Decision on Jurisdiction, 17 July 2003 (Orrego Vicuña, Lalonde and Rezek) (Exhibit CL-83).
248Id., ¶77. See Murphy Exploration and Production Company International v. Republic of Ecuador (ICSID Case No. ARB/08/4), Award on Jurisdiction, 15 December 2010, (Oreamuno Blanco, Grigera Naón and Vinuesa) (Exhibit RL-60); Burlington Resources Inc. v. Republic of Ecuador (ICSID Case No. ARB/08/5), Decision on Jurisdiction, 2 June 2010 (Kaufmann-Kohler, Stern and Orrego Vicuña) (Exhibit RL-17).
249Id., ¶¶80-83. In this respect, see the allegations of the Claimants concerning Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151), since according to Claimants it supports their stance. See Transcript (English), Day 1, 2 April 2013, 146:7-146:19.
250Id., ¶¶49-50. See, inter alia, Ronald S. Lauder v. Czech Republic (UNCITRAL), Final Award, 3 September 2001 (Exhibit CL-23); Abaclat et al v. Argentine Republic (ICSID Case No. ARB/07/5), Decision on Jurisdiction and Admissibility, 4August 2011(Tercier, Abi-Saab and van den Berg) (Exhibit CL-138); Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania (ICSID Case No. ARB/05/22), Award, 24 July 2008 (Born, Landau and Hanotiau) (Exhibit CL-51) or Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151).
251Statement of Claim, ¶¶106-110, and 167-171.
252Statement of Defense, ¶¶19-20, 24, 136, 231, 296, and 616. See, Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151).
253Rejoinder on the Merits, ¶¶53-57. See, Teinver S.A., Transportes de Cercanías S.A and Autobuses Urbanos del Sur S.A. v. Argentine Republic (ICSID Case No. ARB/09/1), Decision on Jurisdiction, 21 December 2012 (Exhibit CL-151).
254Respondent’s Post-Hearing Brief, ¶¶68-69.
255See Iberdrola Energía, S.A. v. Republic of Guatemala (ICSID Case No. ARB/09/5), Award, 17 August 2012 (Zuleta, Oreamuno Blanco and Derains) (Exhibit RL-22). See Transcript (English), Day 6, 9 April 2013, 1431:1-1431:6.
256Memorial on Jurisdiction, ¶¶185-187; Respondent’s Post-Hearing Brief, ¶74.
257Id., ¶¶195-206. See Pantechniki S.A. Contractors & Engineers v. Albania (ICSID Case No. ARB/07/21), Award, 28 July 2009, (Paulsson) (Exhibit RL-18); Societé Générale de Surveillance S.A. v. Republic of Philipines (ICSID Case No. ARB/02/6), Tribunal ́s Decision on Objections to Jurisdiction, 29 January 2004, (El Khoseri, Crawford and Crivellaro) (Exhibit RL-19); Noble Energy, Inc. and Machalapowe CIA. LTDA v. Ecuador and Consejo Nacional de Electricidad (ICSID Case No. ARB/05/12), Decision on Jurisdiction, 5 March 2008 (Kaufmann-Kohler, Cremades and Alvarez) (Exhibit RL-20); Compañía de Aguas del Aconquija S.A. and Vivendi Universal (former Compaigne Générale des Eaux) v. Argentine Republic (ICSID Case No. ARB/97/3), Decision on Annulment, 3 July 2002, (Fortier, Crawford and Fernández Rozas) (Exhibit CL-26).
258Reply on Jurisdiction, ¶¶197-198; Respondent’s Post-Hearing Brief, ¶69. See Total S.A. v. Argentine Republic (ICSID Case No. ARB/04/1), Decision on Jurisdiction, 25 August 2006 (Sacerdoti, Marcano and Alvarez) (Exhibit RL-127); Iberdrola Energía, S.A. v. Republic of Guatemala (ICSID Case No. ARB/09/5), Award, 17 August 2012 (Zuleta, Oreamuno and Derains) (Exhibit RL-22).
259See ¶¶144-146 supra.
260Memorial on Jurisdiction, ¶¶210-228.
261Id., ¶¶217-218.
262ROME 1995: Article 1, “Marginal Generation Unit. The last Generation Unit in the condition to satisfy a rise in demand, dispatched by the [CNDC] in accordance with the procedures established in these Regulations” [Tribunal’s Translation].
263Text of Supreme Decree No. 29599 available in the Memorial on Jurisdiction, ¶235.
264Reply on Jurisdiction, ¶202(a).
265See footnote on p. 193 of the Reply on Jurisdiction.
266Memorial on Jurisdiction, ¶¶239-242, and 246-251.
267Id., ¶¶244, 245, and 251; Respondent’s Post-Hearing Brief, ¶70. See Iberdrola Energía, S.A. v. Republic of Guatemala (ICSID Case No. ARB/09/5), Award, 17 August 2012, (Zuleta, Oreamundo Blanco and Derains) (Exhibit RL-22); Generation Ukraine Inc. v Ucraine (ICSID Case No. ARB/00/9), Award, 16 September 2003, (Paulsson, Salpius and Voss) (Exhibit RL-24).
268See ¶¶138-141 supra. Respondent’s Post-Hearing Brief, ¶72.
269Memorial on Jurisdiction, ¶¶253-267.
270Id., ¶268.
271See ¶134 supra.
272See ¶135 supra.
273In this regard, the Respondent mentions the case of Iberdrola again, where the arbitration tribunal considered that the investor was making claims based on a treaty concerning matters that were actually utterly regulatory in relation to the tariffs applicable to the electricity sector. Thus, it considered that the claims were not protected under the treaty.
274Memorial on Jurisdiction, ¶¶275-277; Reply on Jurisdiction, ¶202(b).
275The Respondent argues, relying on Joy Mining Machinery Limited v. Arab Republic of Egypt (ICSID Case No. ARB/03/11), Decision on Jurisdiction, 6 August 2004 (Orrego Vicuña, Laurence Craig and Weeramantry) (Exhibit RL-11), that such merely commercial claims do not give rise to claims under the investment treaties.
276See ¶¶127, 158-160 supra.
277Memorial on Jurisdiction, ¶¶290-291; Reply on Jurisdiction, ¶202(c).
278See Transcript (English), Day 6, 9 April 2013, 1430:11-1430-14.
279See ¶¶239-251 supra.
280See Counter-Memorial on Jurisdiction, ¶86(a), and Statement of Claim, ¶¶189-209, for the measure relating to spot prices; Counter-Memorial on Jurisdiction, ¶86(b), and Statement of Claim, ¶¶210-220, for the measure relating to the PBP; Counter- Memorial on Jurisdiction, ¶86(c), and Statement of Claim, ¶¶111-113, and 254-259, for the measure relating to the Worthington engines.
281Counter-Memorial on Jurisdiction, ¶86(a).
282See Total S.A. v. The Argentine Republic (ICSID Case No. ARB/04/1), Decision on Responsibility, 27 December 2010.
283Rejoinder on Jurisdiction, ¶61.
284Id., ¶86(b).
285Id., ¶62.
286Id., ¶87. See Oil Platforms- Islamic Republic of Iran v. United States of America (International Court of Justice), Justice Higgins’ Separate Opinion dated 12 December 1996, ICJ Reports 1996 847 (Exhibit CL-100).
287Id., ¶88. The Respondent used the Iberdrola Energía v. Republic of Guatemala case as a support of its argument. Nevertheless, the Claimants allege that case has no relation whatsoever with the case at issue, since in that arbitration claimant failed to prove that the claims submitted were of international nature. The tribunal in that case determined that whether the State had violated or not its obligations under the treaty was not in debate, therefore everything ended up in the fact that it was a question relating to the law of the State of Guatemala.
288Reply on Jurisdiction, ¶204; Statement of Claim, ¶211; Counter-Memorial on Jurisdiction, section 2 and footnote 193.
289Memorial on Jurisdiction, ¶299. See Z. Douglas, “The Hybrid Foundations of Investment Treaty arbitration”, 74 BYIL, 2005, p. 275 (Exhibit RL-66).
290Id., ¶307.
291Memorial on Jurisdiction, ¶307; Reply on Jurisdiction, ¶209.
292Reply on Jurisdiction, ¶210; Statement of Claim, ¶219. See Transcript (English) Day 1, 2 April 2013, 258:21-259:8.
293Response to the Request for Bifurcation of 27 August 2012, ¶36; Reply on Jurisdiction, ¶205; Counter-Memorial on Jurisdiction, ¶¶95-96. According to the Respondent, the Claimants argue the existence of a triple identity test that in this case would not have been confirmed and, in addition, Bolivia’s objection would deprive the US-Bolivia BIT’s effective means protection from its effet utile.
294Memorial on Jurisdiction, ¶¶313-316; Reply on Jurisdiction, ¶206. See Chevron Corporation and Texaco Petroleum Corporation v. Republic of Ecuador [II] (PCA Case No. 2009-23), Third Provisional Award on Jurisdiction, 27 February 2012, (Veeder, Grigera Naón and Vaughan Lowe) (Exhibit RL-23); Pantechniki S.A. Contractors & Engineers v. Albany (ICSID Case No. ARB/07/21), Award of 28 July 2009, (Paulsson) (Exhibit RL-18). See Transcript (English) Day 1, 2 April 2013, 257:12-258:20.
295Counter-Memorial on Jurisdiction, ¶¶94-95. The Respondent, in its Reply on Jurisdiction, ¶207, copies textually from the Counter-Memorial the arguments presented thereby: “the fork in the road clause applies only when an investment treaty arbitration and a domestic court litigation have [...] (iii) the same legal basis for the claim [...] although [EGSA] relied on Bolivian Law, GAI is suing for breach of the effective means provision (Article II.4) of the US Treaty.”
296Reply on Jurisdiction, ¶211. The Respondent considers that GAI, not having been incorporated in Bolivia or performing energy activities at its own risk, lacks standing to commence administrative proceedings. Likewise, the company is controlled, mostly, by Bolivian investors. At the time of submitting a request for arbitration, EGSA could not be regarded as an investor from the United States.
297See Alex Genin, Eastern Credit Limited, INC. and A.S. Baltoil v. Republic of Estonia (ICSID Case No. ARB/99/2), Award, 25 June 2001 (Fortier, Heth and van den Berg) (Exhibit RL-128).
298Reply on Jurisdiction, ¶213. The Respondent holds that the Claimants’ assertion would make it impossible for the fork-in- the-road and the effective remedy clauses to coexist. Nevertheless, this is not true, since an American investor, in accordance with the US-Bolivia BIT, can submit a claim before the domestic courts, when being affected by ineffective means, and submit a claim under the BIT itself that is not affected by the fork-in-the-road clause. This would actually occur when there is no dispute unity
299Counter-Memorial on Jurisdiction, ¶94. See, inter alia, Yukos Universal Limited (Isle of Man) v. Russian Federation (UNCITRAL Case, PCA Case No. AA227), Award on Jurisdiction and Admissibility, 30 November 2009, (Fortier, Poncet and Schwebel) (Exhibit CL-127); Desert Line Projects LLC v. Republic of Yemen (ICSID Case No. ARB/05/17), Award, 6 February 2008 (Tercier, Paulsson and El-Kosheri) (Exhibit CL-95); Occidental Exploration and Production Company v. Republic of Ecuador (LCIA Case No. UN 3467), Final Award of 1 July 2004 (Orrego Vicuña, Brower and Sweeney) (Exhibit CL-31).
300See Pantechniki S.A. Contractors & Engineers (Greece) v. Republic of Albany (ICSID Case No. ARB/07/21), Award, 30 July 2009, (Paulsson) (Exhibit RL-18).
301See ¶¶259-262 supra.
302Reply on Jurisdiction, footnote 202.
303Rejoinder on Jurisdiction, ¶211.
304See Transcript (English), Day 1, 2 April 2013, 147:14-147:22.
305See Transcript (English), Day 1, 2 April 2013, 147:23-147:25.
306Reply on Jurisdiction, ¶208
307Rejoinder on Jurisdiction, ¶¶74-75.
308Memorial on Jurisdiction, ¶¶321-325. See Jan de Nul N.V. and Dredging International N.V. v Arab Republic of Egypt (ICSID Case No. ARB/04/13), Decision on Jurisdiction, 16 June 2006 (Kaufmann-Kohler, Mayer and Stern) (Exhibit RL- 12); Loewen Group. Inc. and Raymond L. Loewen v. United States (ICSID Case No. ARB(AF)/98/3), Decision on the merits, 26 June 2003 (Mason, Mikva and Mustill) (Exhibit RL-68); Generation Ukraine, Inc. v. Ukraine (ICSID Case No. ARB/00/9), Decision, 16 September 2003 (Paulsson, Salpius and Voss) (Exhibit RL-34).
309Id., ¶320.
310Id., ¶329. Dr Carlos Quispe is “responsible for responding the administrative remedies filed against the energy authorities’ decisions and representing the Bolivian State in the judicial proceedings against such decisions.”
311Reply on Jurisdiction, ¶¶215-216.
312Id., ¶217; Counter-Memorial on Jurisdiction, ¶¶99, 101-103.
313See Generation Ukraine Inc. v. Ukraine (ICSID Case No. ARB/00/9), Decision, 16 September 2003 (Salpius, Voss and Paulsson) (Exhibit RL-24); Saluka Investments BV v. Czech Republic (UNCITRAL Case-PCA Case), Partial Award, 17 March 2006 (Watts, Fortier and Behrens) (Exhibit CL-36). See Transcript (English) Day 1, 2 April 2013, 250:2-250:21.
314Counter-Memorial on Jurisdiction, ¶102. In this regard, the Claimants assert that both cases were claims based on the denial of justice and, therefore, in this case the exhaustion of local remedies would indeed be required. See ¶276 infra.
315See Loewen Group, Inc. and Raymond L. Loewen v. United States (ICSID Case No. ARB(AF)/98/3), Decision, 26 June 2003 (Mason, Mikva and Mustill) (Exhibit RL-68).
316See Jan de Nul N.V v. Republic of Egypt (ICSID Case No. ARB/04/13), Decision, 16 June 2006 (Kaufmann-Kohler, Mayer and Stern) (Exhibit RL-12).
317Counter-Memorial on Jurisdiction, ¶102. See ¶276 infra.
318See Helnan International Hotels A/S v. Egypt (ICSID Case No. ARB/05/19), Annulment Proceeding, Decision of the ad hoc Committee, 14 June 2010 (Schwebel, Ajibola and McLachlan) (Exhibit CL-132).
319See Generation Ukraine Inc. v. Ukraine (ICSID Case No. ARB/00/9), Decision, 16 September 2003 (Paulsson, Salpius and Voss) (Exhibit RL-24).
320Reply on Jurisdiction, ¶222.
321Id., ¶223.
322Counter-Memorial on Jurisdiction, ¶101. See CME Czech Republic BV v. Czech Republic (UNCITRAL), Partial Award, 13 September 2001 (Kuhn, Schwebel and Hándl) (Exhibit RL-33); Mytilineos Holdings S.A. v. State Union of Serbia & Montenegro and Republic of Serbia (UNCITRAL Case), Partial Award on Jurisdiction, 8 September 2006 (Reinisch, Koussolis and Mitrović) (Exhibit CL-94). See Transcript (English), Day 1, 2 April 2013, 148:8-148:19.
323Id., ¶102. See Jan de Nul NV and Dredging International NV v. Republic of Egypt (ICSID Case No. ARB/04/13), Award, 6 November 2008 (Kaufmann Kohler, Mayer and Stern) (Exhibit CL-56); The Loewen Group, Inc. and Raymond L. Loewen v. United States of America (ICSID Case No. ARB(AF)/98/3), Award, 26 June 2003 (Mason, Mikva and Mustill) (Exhibit RL-68); Waste Management, Inc. v. United Mexican States (ICSID Case No. ARB(AF)/00/3), Award, 30 April 2004 (Crawford, Civiletti and Magallón Gómez) (Exhibit RL-99); Parkerings-Compagniet A.S. v. Republic of Lithuania (ICSID Case No. ARB/05/8), Award, 11 September 2007 (Lew, Lalonde and Lévy) (Exhibit RL-13).
324Id, ¶102. See Generation Ukraine, Inc, v. Ukraine (ICSID Case No. ARB/00/9), Decision, 16 September 2003 (Paulsson, Salpius and Voss) (Exhibit RL-24); Helnan International Hotels A/S v. Republic of Egypt (ICSID Case No. ARB/05/19), Annulment Proceeding, Decision of the ad hoc Committee, 14 June 2010 (Schwebel, Ajibola and McLachlan) (Exhibit CL- 132).
325Memorial on Jurisdiction, ¶318.
326Reply on Jurisdiction, ¶¶220-223; Counter-Memorial on Jurisdiction, ¶¶102-103.
327Rejoinder on Jurisdiction, ¶79, and footnotes 163 and 164.
328Reply on Jurisdiction, ¶233(2)(b).
329Memorial on Jurisdiction, ¶337.
330Counter-Memorial on Jurisdiction, ¶110; Rejoinder on the Merits, ¶85.
331Statement of Claim, ¶¶146-148.
332Id., ¶¶151-154. See Norwegian Shipowners’ claims (Norway v. United States), Award, 13 October 1922, United Nations Reports of International Arbitral Awards, Vol. I (Anderson, Vogt and Valloton) (Exhibit CL-1); Goldenberg Case (Germany v. Romania), Award, 27 September 1928, United Nations Reports of International Arbitral Awards , Vol. II (Fazy) (Exhibit CL-3). See K. J. Vandevelde, “U.S. International Investment Agreements” (2009) (Exhibit CL-59); L. B. Sohn and R. R. Baxter, “Responsibility of States for Injuries to the Economic Interests of Aliens”, American Journal of International Law (1961) (Exhibit CL-4).
333Claimants’ Post-Hearing Brief, ¶7.
334Id., ¶¶156-161. See CME Czech Republic BV v. Czech Republic (UNCITRAL Case), Final Award, 14 March 2003 (Kuhn, Schwebel and Brownlie) (Exhibit CL-27); Biloune and Marine Drive Complex Ltd v. Ghana Investments Centre and the Government of Ghana, Award on Jurisdiction and Liability, 27 October 1989, in (1994) 95 International Law Reports (Schewebel, Wallace and Leigh) (Exhibit CL-8); Amoco International Finance Co v. The Islamic Republic of Iran (Iran-US Claims Tribunal), Award, 14 July 1987 (Exhibit CL-6); Rumeli Telekom A.S. and Telsom Mobil Telekomikasyon Hizmetteri A.S. v. Republic of Kazakhstan (ICSID Case No. ARB/05/16), Award, 29 July 2008 (Hanotiau, Boyd and Lalonde) (Exhibit CL-52). See Transcript (English), Day 1, 2 April 2013, 73:4-74:17.
335Id., ¶¶162-165; Reply on the Merits, ¶110. See ADC Affiliate Limited and ADC & ADMC Management Limited v. Republic of Hungary (ICSID Case No. ARB/03/16), Award, 2 October 2006 (Kaplan, Brower and van den Berg) (Exhibit CL-38); Ioannis Kardassopoulos and Ron Fuchs v. Georgia (ICSID Cases Nos., ARB/05/18 and ARB/07/15), Award, 3 March 2010 (Fortier, Orrego Vicuña and Lowe) (Exhibit CL-65); Mohammad Ammar Al-Bahloul v. Republic of Tajikistan (SCC Case No. V (064/2008)), Partial Award on Jurisdiction and Liability, 2 September 2009 (Hertzfeld, Happ and Zykin) (Exhibit CL-64).
336Statement of Claim, ¶¶166-168.
337Statement of Claim, ¶169. See Transcript (English), Day 1, 2 April 2013, 74:21-77:8; Transcript (English), Day 6, 9 April 2013, 1329:4-1329:21.
338Statement of Claim, ¶¶228-229; Reply on the Merits, ¶¶165-167. See, inter alia, Chorzów Factory (Merits), PCIJ, Series A, No. 17, 1928 (Exhibit CL-2); Sempra Energy International v. The Argentine Republic (ICSID Case No. ARB/02/16), Award, 28 September 2007 (Orrego Vicuña, Lalonde and Rico) (Exhibit CL-46); Compañía de Aguas del Aconquija S.A. and Vivendi Universal (formerly, Compagnie Générale des Eaux) v. The Argentine Republic (ICSID Case No. ARB/97/3), Decision on Annulment, 3 July 2002 (Fortier, Crawford and Fernández Rozas) (Exhibit CL-26); International Law Commission, “Draft Articles on Responsibility of States for Internationally Wrongful Acts (with comments)”, 2001 (Exhibit CL-21). See Transcript (English), Day 1, 2 April 2013, 77:13-77:23.
339Reply on the Merits, ¶172. See Sapphire International Petroleums Ltd. v. National Iranian Oil Co. (1963) 35 ILR 136 (Exhibit CL-152); Gemplus SA v. The United Mexican States (ICSID Case No. ARB(AF)/04/3 & ARB(AF)/04/4), Award, 16 June 2010 (Fortier, Magallón Gómez and Veeder) (Exhibit CL-67). See Transcript (English), Day 1, 2 April 2013, 94:11- 94:15.
340Statement of Claim, ¶¶230-231. See Compañía del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica (ICSID Case No. ARB/96/1), Award, 17 February 2000 (Fortier, Lauterpacht and Weil) (Exhibit CL-19); CMS Gas Transmission Company v. The Argentine Republic (ICSID Case No. ARB/01/8), Award, 12 May 2005 (Orrego Vicuña, Lalonde and Rezek) (Exhibit CL-35); Compañía de Aguas del Aconquija S.A. and Vivendi Universal (formerly, Compagnie Générale des Eaux) v. The Argentine Republic (ICSID Case No. ARB/97/3), Decision on Annulment, 3 July 2002 (Fortier, Crawford and Fernández Rozas) (Exhibit CL-26).
341Id., ¶¶233-235. See Compass Lexecon Report, ¶69.
342See Section B.
343Id., ¶237. See Compass Lexecon Report, ¶65.
344Id., ¶252.
345Compass Lexecon Report, ¶71.
346Compass Lexecon Report, ¶72, footnote 53.
347Reply on the Merits, ¶¶185-186; Compass Lexecon Report, ¶¶110-119, and 121-125; Compass Lexecon Rebuttal Report ¶¶169-170. Claimants explain, for instance: (a) the SDDP from May 2010 to April 2014 was incomplete and therefore was lower; (b) the 2010 POES reflects information that would have been available at the market in May 2010 and which has proven more accurate than other forecasts; (c) MEC did not use the 2011-2022 long-term electricity programming of the SIN, but the 2010 POES for the same previous reasons. See Transcript (English), Day 1, 2 April 2013, 112:5-117:12; Transcript (English), Day 6, 9 April 2013, 1398:22-1401:18.
348Compass Lexecon Report, ¶¶140-143.
349Reply on the Merits, ¶¶179, and 182; Compass Lexecon Rebuttal Report, ¶¶58, 60-67, 70-74, 80-103, and 147. See Siemens A.G. v. The Argentine Republic (ICSID Case No. ARB/02/8), Award, 6 February 2007 (Sureda, Brower and Bello Janeiro) (Exhibit CL-41); Enron Corporation v. The Argentine Republic (ICSID Case No. ARB/01/3), Award, 22 May 2007 (Orrego Vicuña, van den Berg and Tschanz) (Exhibit CL-42); Sempra Energy International v. The Argentine Republic (ICSID Case No. ARB/02/16), Award, 28 September 2007 (Orrego Vicuña, Lalonde and Morelli Rico) (Exhibit CL-46); EDF International S.A., SAUR International S.A. and León Participaciones Argentinas S.A. v. The Argentine Republic (ICSID Case No. ARB/03/23), Award, 11 June 2012 (Kaufmann-Kohler, Remón and Park) (Exhibit RL-141).
350Claimants’ Post-Hearing Brief, ¶¶136-145. See Transcript (English), Day 1, 2 April 2013, 100:24-101:6, 101:22-105:6; Transcript (English), Day 6, 9 April 2013, 1380:7-1386:23, 1387:23-1388:2.
351 Reply on the Merits, ¶180; Claimants’ Post-Hearing Brief, ¶¶146-149; Compass Lexecon Rebuttal Report, ¶¶7, 55, 60-67, 70-73, and 80-102. See Transcript (English), Day 1, 2 April 2013, 100:24-101:6, 105:15-107:18. See Transcript (English), Day 6, 9 April 2013, 1388:12-1398:8.
352Statement of Claim, ¶238.
353Id., ¶¶240-245; Reply on the Merits, ¶¶214-220; Claimants’ Post-Hearing Brief, ¶176; Compass Lexecon Rebuttal Report, ¶175. See Gotanda, A study of Interest (Exhibit CL-44); Compañía de Aguas del Aconquija S.A. and Vivendi Universal v. The Argentine Republic (ICSID Case No. ARB/97/3), Decision on Annulment, 3 July 2002 (Fortier, Crawford and Fernández Rozas) (Exhibit CL-26); Alpha Projektholding GmbH v. Ukraine (ICSID Case No. ARB/07/16), Award, 8 November 2010 (Robinson, Alexandrov and Turbowicz) (Exhibit CL-68); France Telecom v. Lebanon (UNCITRAL), Award, 31 January 2005 (Audit, Lalonde and Akl) (Exhibit CL-34); Funnekotter & Ors v. Republic of Zimbabwe (ICSID Case No. ARB/05/6), Award, 22 April 2009 (Guillaume, Cass and Zafar) (Exhibit CL-61); Continental Casualty Company v. The Argentine Republic (ICSID Case No. ARB/03/9), Award, 5 September 2008 (Griffith, Söderlund and Ajibola) (Exhibit CL-54). See Transcript (English), Day 1, 2 April 2013, 130:21-133:16.
354Reply on the Merits, ¶¶221-223.
355Statement of Claim, ¶¶247-251; Reply on the Merits, ¶188. The numerical data were corrected, as evidenced in the Reply on the Merits, ¶188; Compass Lexecon Rebuttal Report, ¶¶27, 30-52, and 142. See Transcripts (English), Day 1, 2 April 2013, 117:13-126:19.
356Id., ¶171; Reply on the Merits, ¶¶110-112; Claimant’s Post-Hearing Brief, ¶¶100, and 106. See Mohammad Ammar Al- Bahloul v. Republica of Tajikistan (SCC Case No. V (064/2008)), Partial Award on Jurisdiction and Liability, 2 September 2009 (Hertzfeld, Happ and Zykin) (Exhibit CL-64); ADC Affiliate Limited and ADC & ADMC Management Limited v. Republic of Hungary (ICSID Case No. ARB/03/16), Award, 2 October 2006 (Kaplan, Brower and van den Berg) (Exhibit CL-38). See Transcript (English), Day 1, 2 April 2013, 75:2-77:8.
357Statement of Defense, ¶115; Rejoinder on the Merits, ¶¶147-149; Respondent’s Post-Hearing Brief, ¶¶81-83. See Transcript (English), Day 1, 2 April 2013, 188:6-188:8.
359Id., ¶121; Respondent’s Post-Hearing Brief, ¶82. See Transcript (English), Day 1, 2 April 2013, 195:14-196:10.
360Id., ¶¶126-134. See Transcript (English), Day 1, 2 April 2013, 186:9-186:10.
361Id., ¶¶124, 136-139. See Amoco International Finance Corporation v. The Government of the Islamic Republic of Iran (Iran-US Claims Tribunal, Case No. 56), Partial Award, 14 June 1987 (Virally, Three and Brower) (Exhibit RL-76); Goetz and others v. Burundi (ICSID Case No. ARB/95/3), Award, 10 February 1999 (Weil, Bedjaoui and Bredin) (Exhibit RL-70). See Transcript (English), Day 1, 2 April 2013, 187:22-188:8.
362Statement of Defense, ¶150; Rejoinder on the Merits, ¶¶161-168. See Transcript (English), Day 1, 2 April 2013, 190:2- 190:4.
363Statement of Defense, ¶154; Rejoinder on the Merits, ¶160. See Transcript (English), Day 1, 2 April 2013, 189:21-189:24.
364Statement of Defense, ¶¶155-158, 160-162; Rejoinder on the Merits, ¶128. See Transcript (English), Day 1, 2 April 2013, 190:10-190:17.
365Statement of Defense, ¶159. See Transcript (English), Day 1, 2 April 2013, 190:19-190:21.
366Statement of Defense, ¶¶166-171; Rejoinder on the Merits, ¶¶123-128, and 172. See Minutes of the Meeting held by Bolivia, Rurelec and GAI, dated 5 July 2010 (Exhibit C-187); “Profin valora acciones del Elfec”, Los Tiempos, 13 August 2010 (Exhibit R-81). See Transcript (English), Day 1, 2 April 2013, 185:10-185:15, 185:17-185:19, 186:2-186:4, 186:9- 186:10, 190:10-190:17.
367 Statement of Defense, ¶¶8(c), and 135; Rejoinder on the Merits, ¶¶11, 127, and 152.
368PROFIN Report (Exhibit R-154).
369Statement of Defense, ¶¶143-144.
370Id., ¶¶174 (f)(g), and 185-193; Respondent’s Post-Hearing Brief, ¶¶92-93. See Econ One Report, ¶¶7, 41, and 95. See Transcript (English), Day 1, 2 April 2013, 198:20-206:5; Transcript (English), Day 6, 9 April 2013, 1435:11-1435:18, 1436:14-1441:13.
371Id., ¶175.
372Id., ¶¶177-184, 199-200; Rejoinder on the Merits, ¶¶176-182. See The Mavrommatis Palestine Concessions (Greece v. United Kingdom), PCIJ Series A, No. 5 (1925) (Exhibit RL-81); Martini Case, 2 U.N.R.I.A.A 554, Award, 8 May 1930 (Exhibit RL-82). See Transcript (English), Day 1, 2 April 2013, 193:12-193:17, 196:6-196:10.
373Rejoinder on the Merits, ¶¶186-205. See Transcript (English), Day 1, 2 April 2013, 236:13-242:1; Transcript (English), Day 6, 9 April 2013, 1471:9-1473:24.
374Statement of Defense, ¶¶202-203; See Lighthouses Concession Case (1956), Claim No. 27 (Exhibit RL-84); Philips Petroleum Company Iran v. The Islamic Republic of Iran (Iran-US Claims Tribunal), Award No. 425-39-2, 29 June 1989 (Exhibit RL-85); American International Group Inc. and American Life Insurance Company v. Iran (Iran-US Claims Tribunal), Award No. 99-2-3, 19 December 1983 (Exhibit RL-86); Thomas Earl Payne v. The Government of the Islamic Republic of Iran (Iran-US Claims Tribunal), Award No. 245-335-2, 8 August 1986 (Exhibit RL-87); Saghi v. The Islamic Republic of Iran (Iran-US Claim Tribunal), Award No. 544-298-2, 22 January 1993 (Exhibit RL-88).
375Id., ¶206; Econ One Valuation Report, ¶¶13-14.
376Id., ¶207.
377Id., ¶208.
378Id., ¶209.
379Statement of Defense, ¶¶214-218; Rejoinder on the Merits, ¶¶234-243. See Paz, ¶¶91-92, 95-100, and 102-105. See Transcript (English), Day 1, 2 April 2013, 207:14-208:22, 214:10-219:6; Transcript (English), Day 6, 9 April 2013, 1449:3- 1454:3.
380Statement of Defense, ¶223; Econ One Report, ¶20.
381Statement of Defense, ¶¶224-227; Econ One Report, ¶¶20-21, and 123; Paz, ¶¶113-115. In this regard, Respondent explains that since Claimants have disregarded stabilization when preparing their reports, so has Respondent when preparing its.
382Id., ¶¶236-237; Paz, ¶¶129-130, and 132.
383 Id., ¶¶232-235; Paz, ¶¶127-128. See Transcript (English), Day 6, 9 April 2013, 1456:22-1457:12.
384Statement of Defense, ¶¶238-239. See Transcript (English), Day 6, 9 April 2013, 1457:13-1458:17.
385Id., ¶¶243-246; Aliaga, ¶32; Paz, ¶79; Econ One Report, ¶¶32-33. See Transcript (English), Day 1, 2 April 2013, 222:10- 222:22.
386Id., ¶¶248-250; Paz, ¶137; Econ One Report, ¶38. See Transcript (English), Day 1, 2 April 2013, 223:9-223:21.
387Id., ¶¶251-252; Compass Lexecon Report, ¶¶39-40. The Respondent explains that the mistake in this case does not necessarily benefit Bolivia. See Transcript (English), Day 1, 2 April 2013, 223:22-224:3.
388Id., ¶¶253-254; Econ One Report, ¶¶44-45. See Transcript (English), Day 1, 2 April 2013, 224:5-224:24.
389Id., ¶¶255-261; Paz, ¶¶134-136; Econ One Report, ¶48. See Transcript (English), Day 1, 2 April 2013, 225:4-226:7.
390Id., ¶¶262-269; Econ One Report, ¶51. See SEDCO, Inc. v. National Iranian Oil Company and the Islamic Republic of Iran (Iran- US Claims Tribunal), Award No. 309-129-3, 2 July 1987 (Exhibit RL-91); Himpurna California Energy Ltd. v. PT (Persero) Perusahaan Listruik Negara, Award, 4 May 1999 (Paulsson, Fina and Setiawan) (Exhibit RL-92).
391Id., ¶¶270-278; Econ One Report, ¶¶52-84.
392See Transcript (English), Day 1, 2 April 2013, 232:2-232:4, 233:10-233:17.
393See Transcript (English), Day 1, 2 April 2013, 232:4-232:9, 234:9-234:12, 235:5-235:15.
394See Transcript (English), Day 1, 2 April 2013, 227:16-231:18; Transcript (English), Day 6, 9 April 2013, 1459:15- 1468:19.
395See Himpurna California Energy Ltd. v. PT (Persero) Perusahaan Listruik Negara, Award, 4 May 1999 (Exhibit RL-92); Patuha Power Ltd. v. PT (Persero) Perusahaan Listruik Negara, Award, 4 May 1999 (Exhibit RL-137); Mobil Cerro Negro, Ltd. v. Petróleos de Venezuela, S.A. and PDVSA Cerro Negro, S.A. (ICC Case No. 15416/JRF/CA), Award, 23 December 2011 (Exhibit RL-138); Joseph Charles Lemire v. Ukraine (ICSID Case No. ARB/06/18), Award, 28 March 2011 (Armesto, Paulsson and Voss) (Exhibit CL-70); Railroad Development Corporation (RDC) v. Guatemala (ICSID Case No. ARB/07/23), Award, 29 June 2012 (Sureda, Eizenstat and Crawford) (Exhibit RL-139).
396Rejoinder on the Merits, ¶¶210-233.
397Statement of Defense, ¶280.
398Statement of Defense, ¶¶288-290. See Desert Line Projects LLC v. Republic of Yemen (ICSID Case No. ARB/05/17), Award, 6 February 2008 (Tercier, Paulsson, El-Kosheri) (Exhibit RL-140); Autopista Concesionada de Venezuela, C.A. (“Aucoven”) v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/00/5), Award, 23 September 2003 (Kauffman- Kohler, Böckstiegel and Cremades) (Exhibit CL-29)
399Rejoinder on the Merits, ¶¶254-261.
400Statement of Defense, ¶278; Rejoinder on the Merits, Section 2.5; Econ One Report, ¶¶87-88.
401Statement of Claim, ¶260.
402Statement of Claim, ¶¶174-175. See, inter alia, Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt (ICSID Case No. ARB/04/13), Award, 6 November 2008 (Kaufmann Kohler, Mayer and Stern) (Exhibit CL-56); P. Muchlinski, MULTINATIONAL ENTERPRISES AND THE LAW (Blackwell, Oxford: 1999) (Exhibit CL-18); R. Dolzer, “Fair and Equitable Treatment: A Key Standard in Investment Treaties” (2005) 39 The International Lawyer 87 (Exhibit CL-17).
403Id., ¶¶180-183. See Azurix Corp v. Argentine Republic (ICSID Case No. ARB/01/12), Award, 14 July 2006 (Sureda, Lalonde and Martins) (Exhibit CL-37); MTD Equity Sdn Bhd and MTD Chile S.A. v. Republic of Chile (ICSID Case No. ARB/01/7), Award, 25 May 2004 (Sureda, Lalonde, Oreamuno Blanco) (Exhibit CL-30); Saluka Investments BV v. Czech Republic (UNCITRAL Case), Partial Award, 17 March 2006 (KCMG, Fortier and Behrens) (Exhibit CL-36); PSEG Global Inc., and Konya Ilgin Elektrik Uretim ve Ticaret Limited Sirketi v. Republic of Turkey (ICSID Case No. ARB/02/5), Award, 19 January 2007 (Orrego Vicuña, Fortier and Kaufmann-Kohler) (Exhibit CL-40). See Transcript (English), Day 1, 2 April 2013, 78:10-78:20.
404Id., ¶184. See Bayindir Insaat Turizm Ticaret Ve Sayani A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29), Award, 27 August 2009 (Kaufmann Kohler, Berman, Böckstiegel) (Exhibit CL-63); Joseph Charles Lemire v. Ukraine (ICSID Case No. ARB/06/18), Decision on Jurisdiction and Responsibility, 28 March 2011 (Fernández-Armesto, Paulsson and Voss) (Exhibit CL-70); Técnicas Medioambientales TECMED S.A. v. United Mexican States (ICSID Case No. ARB (AF) 00/2/), Award, 29 May 2003 (Grigera Naón, Fernández Rozas and Bernal Verea) (Exhibit CL-28). See Transcript (English), Day 1, 2 April 2013, 78:21-79:6.
405See CME Czech Republic BV v. Czech Republic (UNCITRAL Case), Partial Award, 13 September 2001 (Kühn, Schewebel and Hándl) (Exhibit CL-74).
406See Azurix Corp v. Argentine Republic (ICSID Case No. ARB/01/12), Award, 14 July 2006 (Sureda, Lalonde and Martins) (Exhibit CL-37).
407See Siemens A.G. v. Argentine Republic (ICSID Case No. ARB/05/3), Award, 6 February 2007 (Sureda, Brower, Janeiro) (Exhibit CL-41).
408Reply on the Merits, ¶¶124-125. See CMS Gas Transmission Company v. Argentine Republic (ICSID Case No. ARB/01/8), Award, 12 May 2005 (Orrego Vicuña, Lalonde and Rezek) (Exhibit CL-35); Total S.A. v. Argentine Republic (ICSID Case No. ARB/04/1), Decision on Responsibility, 27 December 2010 (Sacerdoti, Alvarez and Marcano) (Exhibit CL- 69). See Transcript (English), Day 1, 2 April 2013, 81:10-81:20.
409Statement of Claim, ¶¶189-191; Claimants’ Post-Hearing Brief, ¶¶107, and 109.
410Reply on the Merits, ¶¶128-130. See Transcript (English), Day 1, 2 April 2013, 68:7-70:4, 81:22-82:8.
411See National Grid PLC v. Argentine Republic (UNCITRAL), Award, 3 November 2008 (Garro, Kessler and Sureda) (Exhibit CL-55).
412Reply on the Merits, ¶¶131-133.
413Statement of Defense, ¶¶348-350, 353-365, and 395-400. Rejoinder on the Merits, ¶¶300-312. See, inter alia, Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania (ICSID Case No. ARB/05/22), Award, 24 July 2008 (Born, Landau and Hanotiau) (Exhibit CL-51); Ulysseas, Inc. v. Ecuador (UNCITRAL Case), Award, 12 June 2012 (Bernardini, Pryles and Stern) (Exhibit RL-94); Parkerings-Compagniet AS v. Republic of Lithuania (ICSID Case No. ARB/05/8), Award, 11 September 2007 (Lévy, Lew and Lalonde) (Exhibit RL-13); El paso Energy International Company v. Argentine Republic (ICSID Case No. ARB/03/15), Award, 31 October 2011 (Caflisch, Bernardini and Stern) (Exhibit RL-96).
414Statement of Defense, ¶366. See Continental Casualty Company v. Argentina (ICSID Case No. ARB/03/9), Award, 5 September 2008 (Griffith, Söderlund and Ajibola) (Exhibit CL-54); El Paso Energy International Company v. Argentine Republic (ICSID Case No. ARB/03/15), Award, 31 October 2011 (Caflisch, Bernardini and Stern) (Exhibit RL-96); White Industries Australia Limited v. Republic of India (UNCITRAL Case), Final Award, 30 November 2011 (Brower, Lau SC and Rowley) (Exhibit CL-73).
415Statement of Defense, ¶¶369-392. See Transcript (English), Day 1, 2 April 2013, 252:4-252:10.
416Rejoinder on the Merits, ¶¶315-324. See Letter from EGSA to the Minister of Hydrocarbons and Energy of 7 April 2010 (Exhibit R-149) and Agreement entered into by and between the Minister of Hydrocarbons and Energy and the Companies from the Electricity Sector – “Dignity Tariff” Strategic Alliance Agreement dated 11 March 2010, Section 2, Article 2.3 (Exhibit R-89). See Transcript (English), Day 1, 2 April 2013, 253:4-253:16.
417Statement of Defense, ¶¶415-419. See, inter alia, Waste Management v. Mexico (No. 2) (ICSID Case No. ARB(AF)/00/3), Award, 30 April 2004 (Crawford, Civiletti and Magallón Gómez) (Exhibit RL-99); Thunderbird v. Mexico (UNCITRAL Case), Award, 26 January 2006 (van den Berg, Ariosa and Wälde ) (Exhibit RL-100).
418Rejoinder on the Merits, ¶325; Econ One Second Report, ¶¶222-228. See Transcript (English), Day 1, 2 April 2013, 253:17-255:5.
419Rejoinder on the Merits, ¶¶332-333.
420Statement of Claim, ¶197.
421Id., ¶¶199-200; CME Czech Republic BV v. Czech Republic (UNCITRAL Case), Partial Award, 13 September 2001 (Kühn, Schwebel and Hándl) (Exhibit CL-74); Azurix Corp. v. Argentine Republic (ICSID Case No. ARB/01/12), Award, 14 July 2006 (Sureda, Lalonde and Martins) (Exhibit CL-37); Asian Agricultural Products Ltd v. Sri Lanka (ICSID Case No. ARB/87/3), Final Award, 27 June 1990 (El-Kosheri, Goldman and Asante) (Exhibit CL-10). See Transcript (English), Day 1, 2 April 2013, 82:11-82:16.
422Reply on the Merits, ¶¶136-138. See Biwater Gauff (Tanzania) Ltd. v. Unified Republic of Tanzania (ICSID Case No. ARB/05/22), Award, 24 July 2008 (Born, Landau and Hanotiau) (Exhibit CL-51); National Grid PLC v. Argentine Republic (UNCITRAL Case), Award, 3 November 2008 (Garro, Kessler and Sureda ) (Exhibit CL-55).
423Statement of Claim, ¶¶201-205; Reply on the Merits, ¶¶140-141.
424Statement of Defense, ¶¶436, and 439-441. See Azurix Corp. v. Argentine Republic (ICSID Case No. ARB/01/12), Award, 14 July 2006 (Sureda, Lalonde and Martins) (Exhibit CL-37); CME Czech Republic BV v. Czech Republic (UNCITRAL Case), Partial Award, 13 September 2001 (Kuhn, Schwebel and Hándl) (Exhibit RL-33).
425Statement of Defense, ¶¶427-428.
426Id., ¶¶429-435. See El Paso Energy International Company v. Argentine Republic (ICSID Case No. ARB/03/15), Award, 31 October 2011 (Caflisch, Bernardini and Stern) (Exhibit RL-96); Asian Agricultural Products Ltd v. Sri Lanka (ICSID Case No. ARB/87/3), Final Award, 27 June 1990 (El-Kosheri, Goldman and Asante) (Exhibit CL-10); Saluka Investments BV v. Czech Republic (UNCITRAL Case), Partial Award, 17 March 2006 (Watts, Fortier and Behrens) (Exhibit CL-36).
427Id., ¶¶442-443.
428Statement of Claim, ¶¶208-209.
429Reply on the Merits, ¶¶143-146. See Saluka Investments BV (Netherlands) v. Czech Republic (UNCITRAL Case), Partial Award, 17 March 2006 (Watts, Fortier and Behrens) (Exhibit CL-36); Biwater Gauff (Tanzania) Ltd. v. Unified Republic of Tanzania (ICSID Case No. ARB/05/22), Award, 24 July 2008 (Garro, Kessler and Sureda) (Exhibit CL-51).
430Statement of Claim, ¶261; Claimants’ Post-Hearing Brief, ¶109.
431Reply on the Merits, ¶204; Compass Lexecon Rebuttal Report, ¶¶135-136, and 125.
432Statement of Claim, ¶¶263-265; Reply on the Merits, ¶¶206-207; Compass Lexecon Report, ¶¶121, 118-119, and 124- 125; Corrections made to Compass Lexecon Rebuttal Report, ¶175. See Transcript (English), Day 1, 2 April 2013, 128:2- 129:11; Transcript (English), Day 6, 9 April 2013, 1406:2-1407:9.
433Statement of Defense, ¶¶449-451. See AIG Capital Partners, Inc. and CJSC Tema Real Estate Company v. Republic of Kazakhstan (ICSID Case No. ARB/01/6), Award, 7 October 2003 (Nariman, Bernardini and Vukmir) (Exhibit RL-103); Lauder v. Czech Republic (UNCITRAL Case), Award, 3 September 2001 (Briner, Klein and Cutler) (Exhibit CL-23).
434Statement of Defense, ¶¶445-448, 450-452, and 455.
435Statement of Defense, ¶¶420-423, and 473-483; Econ One Report, ¶¶121, and 124. See Compass Lexecon Report, ¶121, and 123; Econ One Report, ¶¶115-119. See Transcript (English), Day 1, 2 April 2013, 253:17-255:5.
436Statement of Defense, ¶¶460-462, 463-466, and 468-469; Rejoinder on the Merits, ¶¶357-367. See, inter alia, Chorzów Factory, PCIJ, Ser. A, No. 17, Judgment, 13 September 1928 (Exhibit C-2); Nykomb Synergetics Tech. Holding A.B. v. Republic of Latvia (Arbitration Institute of the Stockholm Chamber of Commerce), Award, 16 December 2003 (Haug, Schütze and Gernandt) (Exhibit RL-106); S.D. Meyers, Inc. v. Government of Canada (UNCITRAL Case), Partial Award, 13 November 2000 (Schwartz, Rae and Hunter) (Exhibit RL-107). See Transcript (English), Day 1, 2 April 2013, 255:18-256:7; Transcript (English), Day 6, 9 April 2013, 1447:19-1447:22.
437Rejoinder on the Merits, ¶374.
438Statement of Claim, ¶¶210-215; Reply on the Merits, ¶¶150, and 152; Claimants’ Post-Hearing Brief, ¶¶117-119. See White Industries Australias Limited v. Republic of India (UNCITRAL Case), Final Award, 30 November 2011 (Brower, Lau and Rowley) (Exhibit CL-73); EDF International S.A., SAUR International S.A. and Leon Participaciones Argentinas S.A. v. Argentine Republic (ICSID Case No. ARB/03/23), Award, 11 June 2012 (Kaufmann-Kohler, Remón and Park) (Exhibit CL- 141); Bayindir Insaat Turizm Ticaret ve Sanayi A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29), Award, 27 August 2009 (Kaufmann-Kohler, Berman and Böckstiegel) (Exhibit CL-170); MTD Equity Sdn. Bhd and MTD Chile S.A. v. Republic of Chile (ICSID Case No. ARB/01/7), Award, 25 May 2004 (Exhibit CL-30). See Transcript (English), Day 1, 2 April 2013, 85:24-88:7.
439Statement of Claim, ¶¶216-220; Claimants’ Post-Hearing Brief, ¶¶120, and 128. See Transcript (English), Day 1, 2 April 2013, 88:18-89:10, 89:20-90:15, 90:16-91:9; Transcript (English), Day 6, 9 April 2013, 1373:9-1374:20.
440Reply on the Merits, ¶¶153-154; Claimants’ Post-Hearing Brief, ¶122. See Transcript (English), Day 1, 2 April 2013, 90:16-92:1.
441Reply on the Merits, ¶¶156-157. See Transcript (English), Day 6, 9 April 2013, 1374:21-1376:2.
442Statement of Claim, ¶¶268-270; Compass Lexecon Report, ¶¶128, 132, and 139; Reply on the Merits, ¶¶210-211; Compass Lexecon Rebuttal Report, ¶¶154-157, 160, 175, and footnote 199. See Transcript (English), Day 1, 2 April 2013, 129:12-130:20.
443Statement of Defense, ¶¶491-492.
444Id., ¶¶529-531. See Transcript (English), Day 1, 2 April 2013, 259:24-260:6.
445Id., ¶523.
446Id., ¶¶535, and 564-571. Third Witness Statement of Dr Quispe, ¶¶19, and 21. See Transcript (English), Day 1, 2 April 2013, 261:11-261:16.
447Id., ¶¶537-538. See Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of Ecuador (ICSID Case No. ARB/04/19), Award, 18 August 2008 (Kaufmann Kolher, Gómez Pinzón and van den Berg) (Exhibit RL-109); Chevron Corporation and Texaco Petroleum Company v. Republic of Ecuador (UNCITRAL Case), Partial Award on the Merits, 30 March 2010 (Böckstiegel, Brower and van den Berg) (Exhibit CL-66).
448Id, ¶¶545-546, and 549. See White Industries Australia Limited v. Republic of India (UNCITRAL Case), Final Award, 30 November 2011 (Brower, Lau SC and Rowley) (Exhibit CL-73); Chevron Corporation and Texaco Petroleum Company v. Republic of Ecuador (UNCITRAL Case), Partial Award on the Merits, 30 March 2010 (Böckstiegel, Brower and van den Berg) (Exhibit CL-66).
449Id., ¶¶557-560, and 562-563. See Transcript (English), Day 1, 2 April 2013, 259:24-260:23.
450Third Witness Statement of Quispe, ¶¶14-15. See 1992 Statistics (Exhibit R-161); 1994 Statistics (Exhibit R-162); 1995 Statistics (Exhibit R-163); 1996 Statistics (Exhibit R-164); 2007 Statistics (Exhibit R-165); 2009 Statistics (Exhibit R-166). See Transcript (English), Day 1, 2 April 2013, 261:1-261:4.
451Id., ¶¶575-576. See, inter alia, Elettronica Sicula S.p.A (ELSI) (United States v. Italy), ICJ Reports 1989, Judgment, 20 July 1989 (Exhibit RL-83); Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc. v. Mexico (ICSID Case No. ARB(AF)/05/22), Award, 21 November 2007 (Cremades, Rovine and Siqueiros) (Exhibit CL-47); Gami Investments Inc. v. Government of the United Mexican States (UNCITRAL (NAFTA) Case), Final Award, 15 November 2004 (Reisman, Muró and Paulsson) (Exhibit RL-105). See Transcript (English), Day 1, 2 April 2013, 261:17-262:11.
452Id., ¶¶577-582.
453Statement of Defense, ¶¶587-596; Compass Lexecon Report, ¶¶129-130; Econ One Report, ¶¶130-131.
454The original amount of USD 142.3 million is recalculated by Claimants in their Reply, and produces a result of USD 136.4 million. Moreover, they request post-award interest once again. For greater clarity, see damages summary table in Reply, ¶224.
455Statement of Claim, ¶274; Reply on the Merits, ¶227; Claimants’ Post-Hearing Brief, ¶178.
456Statement of Defense, ¶628; Rejoinder on the Merits, ¶428.
457Ambiente Ufficio v. Argentine Republic, Decision on Admissibility and Jurisdiction, 8 February 2013, ¶¶111-147.
458Ambiente Ufficio v. Argentine Republic, Decision on Admissibility and Jurisdiction, 8 February 2013, ¶141.
459Noble Energy, Inc and Machalapower Cia, Ltda v. The Republic of Ecuador and Consejo Nacional de Electricidad, Decision on Jurisidction, 2008, ¶206.
460Rejoinder on Jurisdiction, ¶¶14-18, and documents referred thereto. See Exhibit R-61.
461Quiborax S.A. Non Metalic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, Decision on Jurisidction, 27 September 2012.
462Quiborax S.A. Non Metalic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, Decision on Jurisidction, 27 September 2012, ¶210.
463Cemex Caracas Investments, B.V. and Cemex Caracas II Investments B.V. v. Bolivarian Republic of Venezuela, Decision on Jurisdiction, 30 December 2010, ¶¶152-158.
464Cemex Caracas Investments, B.V. and Cemex Caracas II Investments B.V. v. Bolivarian Republic of Venezuela, Decision on Jurisdiction, 30 December 2010, ¶¶157-158.
465Siemens A.G. v. Argentina (ICSID Case No. ARB/02/8), Decision on Jurisdiction, 3 August 2004, ¶137: “[T]here is no explicit reference to direct or indirect investment as such in the [German/Argentine BIT]. The definition of ‘investment’ is very broad. An investment is any kind of asset considered to be under the law of the Contracting Party where the investment has been made. The specific categories of investment included in the definition are included as examples rather than with the purpose of excluding those not listed. The drafters were careful to use the words ‘not exclusively’ before listing the categories of ‘particularly’ included investments. One of the categories consists of ‘shares, rights of participation in companies and other type of participation in companies’. The plain meaning of this provision is that shares held by a German shareholder are protected under the Treaty. The Treaty does not require that there be no interposed companies between the investment and the ultimate owner of the company. Therefore a literal reading of the Treaty does not support the allegation that the definition of investment excludes indirect investments.”
466Ioannis Kardassopoulos v. Georgia (ICSID Case No. ARB/05/18), Decision on Jurisdiction, 6 July 2007, ¶¶123–124, interpreting the Greece-Georgia BIT.
467Tza Yap Shun v. Republic of Peru (ICSID Case No. ARB/07/6), Decision on Jurisdiction, 19 June 2009, ¶¶106–111, where the tribunal based its decision on the text of Article 1 of the Peru-China BIT, the intention of the Contracting States to promote and protect investments, and the absence of an express limitation in the BIT.
468Mobil Corporation and Others v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/27), Decision on Jurisdiction, 10 June 2010, ¶¶ 162-66.
469Quiborax S.A. Non Metalic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, Decision on Jurisidction, 27 September 2012, ¶229.
470Romak S.A. (Switzerland) v. The Republic of Uzbekistan, Award, 26 November 2009.
471Alps Finance v. The Slovak Republic, Award, 5 March 2011.
472See Exhibit C-7.
473Plama v. Bulgaria, Decision on Jurisdiction, 8 February 2005, ¶161. See also Ulysseas Inc. v. Ecuador, Interim Award, 28 September 2010, ¶¶172-173.
474Ulysseas Inc. v. Ecuador, Interim Award, 28 September 2010, ¶172.
475Given its decision that it lacks jurisdiction over GAI, and for simplicity’s sake, the award will from now on refer only to a single Claimant, Rurelec, unless explicitly stated otherwise.
476Memorial on Jurisdiction, ¶155.
477Notice of Arbitration, ¶¶61-62.
478Notice of Arbitration, ¶63.
479The Tribunal also agrees with the decision of the Ambiente Ufficio v. Argentine case, Decision on Admissibility and Jurisdiction, 8 February 2013, ¶¶570-585, and the decision of ICS v. Argentina case, Award on Jurisdiction, 10 February 2012, ¶¶263-273. According to the latter decision: “[t]he Tribunal cannot therefore create exceptions to treaty rules where these are merely based upon an assessment of the wisdom of the policy in question, having no basis in either the treaty text or in any supplementary interpretive source, however desirable such policy considerations might be seen to be in the abstract” (¶267).
480ICS v. Argentina, Award on Jurisdiction, 10 February 2012, ¶272.
481Counter-Memorial on Jurisdiction, ¶73.
482Counter-Memorial on Jurisdiction, ¶64.
483Notice of Arbitration, ¶¶4, 6.
484See Exhibit C-40 (the same wording has been used in the Notice of Arbitration).
485CMS Gas Transmission Company v. Argentine, Decision of the Tribunal on Objections to Jurisdiction, 17 July 2003, ¶¶92-126.
486In any event the decommissioning and future sale could not occur, at least in practical terms, without the agreement of the regulator.
487Rejoinder on the Merits, ¶133; Claimants’ Opening Statement, 2 April 2013; Transcript (English), Day 1, 2 April 2013, 92:1-92:4.
488In the latter case, had the regulatory environment not been changed, the additional funds would have gone into the Stabilization Fund and therefore would not have created a positive cash flow in time (Rejoinder on the Merits, ¶371). This would nonetheless have had a positive impact on the economic fundamentals of EGSA, thereby increasing its capacity to obtain third party funding.
489Mr Earl and Mr Lanza expected that, once in operation, the CCGT would double the EGSA EBIDTA (see, for instance, Earl’s Cross-Examination, Transcript (English), Day 1, 2 April 2013, 25:20-25:22).
490Although it is true that some delays could have been avoided in the licensing phase, the main reasons for the lack of credits before nationalisation were not related to these delays, but to the complexity of the process.
491First Witness Statement of Paz, Annex 29; “Pacific Credit Ratings Report on Empresa Eléctrica Guaracachi S.A., September 2010”, p. 3 (Exhibit C-188), and “2009 Audited Financial Statements of Empresa Eléctrica Guaracachi S.A.”, notes 26, 15, and 4, 22 March 2010, p.32, note 26 (Exhibit C-183). The Tribunal also notes that by the end of the year the physical completion reached 99.9% (“Progress Report for Combined-Cycle Project GCH 12” December 2010 (Exhibit C-321)) even without the benefit of Mr Jerry Blake and IPOL’s cooperation (Claimants’ Closing Statement, 9 April 2013, Slides 29-32; Lanza’s Direct Examination, Transcript (English), Day 3, 4 April 2013, 609:19-609:22.
492Compass Lexecon Rebuttal Report, ¶20 and note 4.
493Rejoinder on Merits, ¶270.
494Llarens’ Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1022:15-1022:17.
495For the definition of “reserva fría”, see Paz’s Cross-Examination, Transcript (English), Day 4, 5 April 2013, 869:6- 869:13.
496Joint UNDP/World Bank Energy Sector Management Assistance Programme, “Bolivia: Restructuring and Capitalization of the Electricity Supply Industry–An Outline for Change”, Report No. 21520, 12 September 1995 (Exhibit C-61); Joint UNDP/World Bank Energy Sector Management Assistance Programme, “ESMAP Country Paper: Bolivia,” Report No. 10498, December 1991 (Exhibit C-50); Bolivia: Reglamento de Operación del Mercado Eléctrico Mayorista, 28 June 1993 (Exhibit R-27); Statement of Claim, ¶¶190, 128; Electricity Law (Exhibit C-5); Supreme Decree No. 26,093/2001, 2 March 2001 (Exhibit C-85).
497Total S.A. v. Argentine Republic (ICSID Case No. ARB/04/1), Decision on Liability, 27 December 2010, (Sacerdoti, Álvarez, and Marcano) (Exhibit CL-69).
498Reply on the Merits, ¶¶131, 133-134.
499Rejoinder on Merits, ¶291.
500Statement of Claim, ¶89.
501Statement of Claim, ¶192.
502Reply on the Merits, ¶79.
503Statement of Defence, ¶330; Reply on Merits, ¶76.
504Reply on the Merits, ¶¶82-83.
505Resolution SSDE No. 185/2009, 25 September 2009 (Exhibit C-176).
506Claimants’ Closing Statement, 9 April 2013, Slide 18.
507Statement of Claim ¶¶37-38; Statement of Defence, ¶302.
508Later “Autoridad de Electricidad”. For the evolution of the legal and regulatory framework since 1994, see Respondent’s Opening Statement, 2 April 2013, Slide 245.
509Statement of Defence, ¶¶352-355 et seq.
510Reply on the Merits, ¶167, notably as to interest rate.
511Albeit that the Tribunal is convinced that causation and harm has been proven—see Reply on the Merits, ¶200 et seq.
512Claimants’ Opening Statement, 2 April 2013, Slide 60, and Aliaga’s Cross-Examination, Transcript (English), Day 2, 3 April 2013, 465:20-465:24.
513Earl’s Cross-Examination, Transcript (English), Day 2, 3 April 2013, 365:22-366:20.
514Compass Lexecon Report, ¶78.
515Statement of Defence, ¶54.
516It is true that PROFIN’s valuation had been considered as “un elemento estratégico en la negociación con GA” (PROFIN Consultores, S.A. “Estimación del valor de la empresa eléctrica Guaracachi S.A.” (Exhibit R-154)) but this does not mean that the conduct of Bolivia was wilful—see Claimants’ Post-Hearing Brief, ¶5.
517Reply on the Merits, ¶111.
518ADC Affiliate Limited and ADC & ADMC Management Limited v. Republic of Hungary (ICSID Case No. ARB/03/16), Award, 2 October 2006 (Kaplan, Brower and van den Berg) (Exhibit CL-38); Ioannis Kardassopoulos and Ron Fuchs v. Georgia (ICSID Cases Nos. ARB/05/18 and ARB/07/15), Award, 3 March 2010 (Fortier, Orrego Vicuña and Lowe) (Exhibit CL-65).
519Reply on the Merits, ¶¶101, 106.
520Rejoinder on the Merits, p. 50.
521Statement of Defence, ¶175.
522Respondent’s Closing Statement, 9 April 2013, Slide 35.
523Compass Lexecon Report, ¶¶284-287.
524Econ One Report, ¶¶89-98.
525Compass Lexecon Rebuttal Report, ¶¶25-29.
526Econ One Second Report, ¶¶50-73.
527Claimants’ Closing Statement, 9 April 2013, Slide 5; Respondent’s Opening Statement, 2 April 2013; Transcript (English), Day 1, 2 April 2013, 194:1-194:3.
528With the relevant exceptions of “size premium” and “country risk premium multiplier”, to be addressed below.
529Compass Lexecon Report, ¶66.
530“The appropriate risk-adjusted discount factor is the WACC of an efficiently managed firm in a similar market, contractual and institutional environment. The WACC is a firm’s (or a project’s) cost of raising funds from both shareholders (equity) and lenders (debt) in an efficient proportion, otherwise known as the optimal capital structure” (Compass Lexecon, Report, ¶¶68, 93). “El WACC representa la mínima tasa de rentabilidad que una empresa tiene que ofrecer a sus proveedores de capital para que inviertan en ella. Para una empresa que se financia con deuda y con capital propio, el WACC se calcula como el promedio ponderado del costo de la deuda (neto de impuestos) y el costo del capital propio” (Econ One Report, ¶51).
531Gemplus S.A. v The United Mexican States (ICSID Case Nos. ARB(AF)/04/3 & ARB(AF)/04/4), Award, 16 June 2010 (Fortier, Magallón Gómez, and Veeder), ¶13.91 (Exhibit CL-67).
532“This difference is explained primarily by Econ One’s ... assessments of the discount rate, spot energy price forecasts and capacity revenues” (Compass Lexecon Rebuttal Report, ¶4), meaning Revenues and Discount Rate, corresponding almost to 95% of the difference between the two experts positions (Id. ¶10). See also Compass Lexecon Rebuttal Report, ¶53; Econ One Second Report, ¶111; Respondent’s Opening Statement, 2 April 2013, Slide 107; Claimants’ Opening Statement, 2 April 2013, Slides 101-104.
533Compass Lexecon Rebuttal Report, ¶53.
534Compass Lexecon Rebuttal Report, ¶106 et seq. These assumptions, which relate to future needs for energy and the actual structure of production, provide a huge variety of results. It is therefore necessary to select which one to retain—see Llarens’ Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1019-1022.
535In relation to Carbon credits (Compass Lexecon Report, ¶83 and Econ One Report, ¶29) both experts calculate the sales value of the credits the same way. However, Compass Lexecon did not initially deduct the 30% that should revert to Bolivia in the first report. See the explanations and corrections of Dr Abdala (Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April, 1188).
536Including the expectations of the willing seller and the way it fulfilled or not what it had expected.
537Paz’s Cross-Examination, Transcript (English), Day 4, 5 April 2013, 936:18-936:21. See also Abdala’s Cross- Examination, Transcript (English), Day 5, 8 April 2013, 1183:12-1184:8; Flores’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1277:13-1278:1.
538See, for instance, Paz’s Cross-Examination, Transcript (English), Day 4, 5 April 2013, 936:5-936:21; Transcript (English), Day 4, 5 April 2013, 935:5-935:21; Transcript (English), Day 4, 5 April 2013, 954:3-954:8.
539Claimants’ Post-Hearing Brief, ¶165.
540See for instance Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1183:11-1183:18; Transcript (English), Day 5, 8 April 2013, 1077:21-1077:24.
541Respondent’s Post Hearing Brief, ¶111 et seq.
542Compass Lexecon Report, Appendix C (“Mercados Energéticos’s Report on Dispatch Run Assumptions”).
543First Witness Statement of Paz, ¶¶96-97.
544Compass Lexecon Rebuttal Report, ¶¶110, 112, and footnote 122.
545First Witness Statement of Paz, Annex 39 (CNDC, “Plan Óptimo del Sistema de Interconectado Nacional, 2011-2021, Diciembre 2010”), p. 32.
546Reporte Energía, Magazine No. 07, January 2009, p. 12 (Exhibit C-294).
547First Witness Statement of Paz, Annex 40 (CNDC, “Plan de Expansión del Sistema Interconectado Nacional”).
548And assuming that a WB could have anticipated 9 years for the construction (First Witness Statement of Paz, Annex 29, p. 104).
549Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1083:7-1083:19.
550Abdala considers this opinion his “judgement call”, albeit the CNDC inputs and lack of budget confirm his point of view (Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1080:22-1080:23; 1082:18-1082:21).
551As the 2012 international bond issue of Bolivia would confirm.
552First Witness Statement of Paz, Annex 40: CNDC, “Plan de Expansión del Sistema Interconectado Nacional”, p. 17; Flores’ Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1208-1210.
553First Witness Statement of Paz, Annex 39: CNDC, “Plan Óptimo del Sistema de Interconectado Nacional, 2011-2021, Diciembre 2010”, p. 103; Paz’s Cross-Examination, Transcript (English), Day 4, 5 April 2013, 993:12-994:16.
554If Rositas commenced production in 2018, the value of the damages, in accordance with Compass Lexecon’s valuation, would be USD 900,000 (Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1079). This figure has not been subject to any comment from Mr Flores or the Respondent.
555The same reasoning shall be applied to ARJ 1, ARJ 2 and ARJ 3.
556First Witness Statement of Paz, Annex 8: CNDC, “Informe de Precios de Nodo, Período Mayo-Octubre 2010”, p. 10; Paz’s Cross-Examination, Transcript (English), Day 4, 5 April 2013, 944-947. PROFIN Consultores, S.A. “Estimación del valor de la empresa eléctrica Guaracachi S.A.” (Exhibit R-154); First Witness Statement of Paz, Annex 4 (ENDE, “Memoria Anual 1991”) (assuming Karachipampa would still be active in 2020).
55701/2010 Acta de Reunión de Directorio de la “Empresa Guaracachi S.A.” 27 January 2010 (Exhibit R-83).
558Aliaga’s Cross-Examination, Transcript (English), Day 2, 3 April 2013, 441:7-441:12; Andrade’s Cross-Examination, Transcript (English), Day 2, 3 April 2013, 471:21-472:3.
559Compass Lexecon Rebuttal Report, ¶¶119-120.
560See, for example, in relation to the decommissioning of units ARJ 5 and ARJ 6, Resolution SSDE No. 107/2007, 2 April 2007 (Exhibit C-136); Resolution SSDE No. 341/2007, 8 November 2007 (Exhibit C-141); and Resolution SSDE No. 185/2009, 25 September 2009 (Exhibit C-176).
561In any case, the difference at stake in relation to Karachipampa is of USD 1.1million (Compass Lexecon Rebuttal Report, ¶120).
562Compass Lexecon Report, ¶80; Compass Lexecon Rebuttal Report, ¶123; Econ One Second Report, ¶194.
563Respondent’s Closing Statement, 9 April 2013, Econ One Report, ¶7, Table 1.
564Respondent’s Closing Statement, 9 April 2013, Slide 74, quoting Lanza’s Cross-Examination, Transcript (English), Day 3, 4 April 2013, p. 642:25-643:9.
565Respondent’s Post-Hearing Brief, ¶¶129-132.
566Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1201:7-1201:21.
567Flores’ Direct Examination Presentation, Slides 9-14 (albeit that Slide 13 shows as “Indexación Econ One” the standard index that is less favourable to the Respondent than that accepted by the Tribunal).
568First Witness Statement of Paz, ¶¶126-132.
569First Witness Statement of Paz, ¶131 (Table).
570Third Witness Statement of Paz, ¶¶55-56.
571Compass Lexecon Rebuttal Report, ¶¶169-173, 179.
572Tax has been considered as an issue, but Compass Lexecon agreed in its Rebuttal Report (Compass Lexecon Rebuttal Report, ¶140) with Econ One’s remarks (Econ One Report, ¶34).
573Econ One Report, ¶20.
574Econ One Second Report, ¶219.
575Econ One Second Report, ¶¶219-221.
576Compass Lexecon Rebuttal Report, ¶141.
577Econ One Report, ¶39.
578Econ One Report, ¶¶41-45; Compass Lexecon Rebuttal Report, ¶¶126-131; Econ One Second Report, ¶¶204-210.
579Compass Lexecon Report, ¶90.
580Compass Lexecon Report, ¶91; Transcript (English), Day 5, 8 April 2013, 1070 et seq.
581Econ One Report, ¶¶46-48.
582First Witness Statement of Paz, ¶¶134-135.
583Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1065:11-1065:23.
584Respondent’s Post-Hearing Brief, ¶¶133-136.
585First Witness Statement of Paz, ¶135.
586Econ One Report, ¶52.
587Claimants’ Post-Hearing Brief, ¶152.
588Claimants’ Post-Hearing Brief, ¶152.
589Compass Lexecon Report, ¶152.
590Econ One Report, ¶¶54-56; Econ One Second Report, ¶¶153-159.
591Compass Lexecon Rebuttal Report , ¶81. An argument made in this last report about investment banks (¶82) appeared to be wrong (Econ One Second Report, ¶155).
592Econ One Second Report, ¶159.
593Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1105:7.
594Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1110-1112.
595For all the respect that Professor Damodaran commands among practitioners and financial experts, his texts are not always fully polished. Professor Damodaran’s text literally refers to 2009, which seems to be an obvious mistake,as the document was actually written in early 2009.
596Context suggests that Professor Damodaran did not mean “used” in the past, but rather “have now used” in the annual update he is referring to.
597A. Damodaran, “The year that was and hopefully will not see again for a while...Thoughts on 2009”, 2009, p.1 (Exhibit C-168).
598A. Damodaran, “Equity Risk Premium (ERP): Determinants, Estimation and Implications- A Post-Crisis Update”, Stern School of Business, October 2009, p. 67 (Exhibit C-177).
599A. Damodaran, “Equity Risk Premium (ERP): Determinants, Estimation and Implications-The 2010 Edition”, Stern School of Business, February 2010, p. 68 (Exhibit E0-29).
600In the Tribunal’s view, it bears noting that the indication made by the Respondent that all the reports at Exhibit C-300 come from the Latin American Equity Research Department of just one single bank (Banco Santander). Moreover, even if Exhibit C-300 was dated 27 August 2009 by the Claimants, it still contains reports dated in Santiago de Chile at three different times, showing a series of market premiums in its WACC estimates for Argentina, Chile, Colombia and Peru (namely: August 27, 2009: 6.5%; June 8, 2010: 5.50%; October 25, 2010: 5.50%).
601Compass Lexecon Report, ¶155.
602Compass Lexecon Report, ¶156.
603Compass Lexecon Report, ¶¶157-159.
604Econ One Report, ¶¶62-65.
605Econ One Second Report, ¶¶167-173.
606Compass Lexecon Report, ¶167.
607Econ One Report, ¶¶83-85.
608Compass Lexecon Rebuttal Report, ¶¶100-102.
609Econ One Second Report, ¶¶176-178.
610As indicated in line 15 of Table 2 above, the debt to capital ratio (41.60%) is the result of dividing the debt/equity ratio by (1 + debt/equity), i.e. 0.7124/1.7124=0.4160. The difference between this number and 1 is the ratio equity/capital (0.5840).
611This number is the consequence of “re-levering” the “unlevered beta” according to the formula at line 9 of Table 2 above: 0.68226 (1 + (1-0.25) x 0.7124).
612Compass Lexecon Report, ¶160. See also Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1054:2- 1054:7, and Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1256:13-1256:20.
613Compass Lexecon Report, ¶161.
614Spanish original: “La tasa de actualización a utilizar en la aplicación de la presente ley será de diez por ciento (10%) anual, en términos reales. Esta tasa solo podrá ser modificada por el Ministerio, mediante resolución administrativa debidamente fundamentada. La nueva tasa de actualización fijada por el Ministerio no podrá diferir en más de dos (2) puntos porcentuales de la tasa vigente”. Electricity Law, Article 48 (Exhibit C-5).
615Claimants’ Post-Hearing Brief, ¶154.
616A. Damodaran, “Measuring Company Exposure to Country Risk: Theory and Practice”, Stern School of Business, September 2003, p. 10 (Exhibit EO-25).
617A. Damodaran, “Equity Risk Premiums (ERP): Determinants, Estimation and Implications—The 2010 Edition”, Stern School of Business, February 2010, pp. 53-54. (Exhibit EO-29).
618A. Damodaran, “Valuation”, undated (Exhibit EO-71).
619A. Smithers, S. Wright, “Valuing Wall Street: Protecting Wealth in Turbulent Markets”, 2000, p. 176 (Exhibit EO-73).
620A. Damodaran, “Measuring Company Exposure to Country Risk: Theory and Practice”, Stern School of Business, September 2003, pp. 11-12 (Exhibit EO-25).
621A. Damodaran, “Country Risk Premium Spreadsheet Calculations”, January 2010, p.1 (Exhibit C-308).
622Econ One Report, ¶¶75-76.
623MORNINGSTAR, “Markets Results for Stocks, Bonds, Bills and Inflation 1926-2009 - Ibboston SBBI 2010 Valuation Yearbook” (Exhibit EO-13); Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1289:11-1289:12.
624MORNINGSTAR, “Markets Results for Stocks, Bonds, Bills and Inflation 1926-2009-Ibboston SBBI 2010 Valuation Yearbook”, pp. 44-46, 86, Table 7-2 (Exhibit EO-13).
625Compass Lexecon Rebuttal Report, ¶¶60-67; Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1051:9-1051:16, quoting Damodaran.
626J. Tarbell, “The Small Company Risk Premium: Does it Really Exist?” American Society of Appraisers, 18th Annual Advanced Business Valuation Conference, New Orleans, Louisiana, 1999 (Exhibit C-247). This piece was actually dated 1999 and not 2012, as referred to in the Compass Lexecon Rebuttal Report, ¶63. Dr Abdala noted this mistake during the hearings and corrected it (See Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1130).
627Also, in accordance with Mr Abdala, even if any of those items existed, the size premium would not be used automatically, as its potential application would become a matter of judgment (see Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1132). Mr Abdala noted that in more than 150 valuations he had only used size premium in one or two cases in which very severe illiquidity situations were present (see Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1130:6-1130-12).
628See, for instance, Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1122:15-1122:23; 1123:1- 1123:5.
629Econ One Second Report, ¶¶126-135.
630Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1229:25-1230:5.
631Claimants’ Post-Hearing Brief, ¶137.
632The Respondent notes that Fama and French’s position was taken two years after the relevant date for valuation (see Respondent’s Post-Hearing Brief, ¶140; and Flores’ Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1239-1242). Professor Damodaran stated in April 2011 that he refuses to use the “Fama-French model or added a small premium cap to a CAPM model in intrinsic valuation” (A. Damodaran, “Alternatives to the CAPM: Part 2: Proxy Models”, 20 April 2011, p.3 (Exhibit C-370)), but Dr Flores disagrees with Professor Damodaran’s approach (Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1243:12-1243:13; 1253:11-1253:15). See also Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1292-1293.
633Claimants’ Post-Hearing Brief, ¶¶138-139.
634Claimants’ Post-Hearing Brief, ¶141.
635Claimants’ Post-Hearing Brief, ¶145; Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1243:8- 1248:6. However, when redirected, Dr Flores brought new arguments related to the need to sacrifice the “granulate” effect to statistic strength (Flores’ Cross-Examination, Transcript (English) Day 5, 8 April 2013, 1291-1292).
636Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1132:4-1132:16..
637Dr Abdala holds a totally opposite view with the Respondent as to the point that, if a single item is applicable, the size premium would be justified (Abdala’s Cross-Examination, Transcript (English), Day 5, 8 April 2013, 1131-1132).
638A. Damodaran, “Comatose Markets: What If Liquidity Is Not The Norm?”, Stern School of Business, December 2010, pp. 53-54 (Exhibit C-268).
639A. Damodaran, “Comatose Markets: What If Liquidity Is Not The Norm?”, Stern School of Business, December 2010, pp. 55-56 (Exhibit C-268).
640Statement of Claim, ¶238.
641Compass Lexecon Report, ¶98.
642Statement of Claim,. ¶¶241-242.
643Econ One Report, ¶136
644Claimants’ Post-Hearing Brief, ¶¶176-177.
645Statement of Defence, ¶¶288-289.
646Respondent Post-Hearing Brief, ¶¶168-169.
647Available at: and in the document called "MONEDA Y MERCADO 2010" (available at ). At that website, one can see that the "TASAS DE INTERES ACTIVAS ANUALES" in foreign currenccy as at May 2010 were, for commercial bank loans: nominal (5,474092%) and effective (5,633331%).