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International Court of Arbitration of the
International Chamber of Commerce
Case No. 21747/RD/MK/PDP

Arbitration between

REFINERÍA DE CARTAGENA S.A.
(COLOMBIA)

CLAIMANT

and

1. CHICAGO BRIDGE & IRON COMPANY N.V.
(THE NETHERLANDS)

2. CB&I UK LTD.
(UNITED KINGDOM)

3. CBI COLOMBIANA S.A.
(COLOMBIA)

RESPONDENTS

FINAL AWARD

The Arbitral Tribunal
Juan Fernández-Armesto (President)
Andrés Jana Linetzky (Co-arbitrator)
Sir Vivian A. Ramsey (Co-arbitrator)

Administrative Secretary
Deva Villanúa

Deputy Administrative Secretary
Adam Jankowski

June 2, 2023

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INDEX

INDEX 2

GLOSSARY 3

I. PERSONS INVOLVED IN THE ARBITRATION 9

II. PROCEDURAL HISTORY 17

III. INTRODUCTION AND PENDING PROCEDURAL MATTERS 45

IV. LAW APPLICABLE TO THE DISPUTE 52

V. FACTS 60

VI. RELIEF SOUGHT 68

VII. MERITS 101

VII.1. Reficar's pre-contractual claims 102

VII.1.1. Facts 102

VII.1.2. The Parties' positions 136

VII.1.3. The Tribunal's decision 142

VII.2. Contractual claims 196

VII.2.1. Improper EPC costs 196

VII.2.2. CB&I's Counterclaim 288

VII.2.3. Improper delay 314

VII.2.4. Work Completion costs 348

VII.2.5. Procurement costs 369

VII.2.6. Indemnification claims 390

VII.3. Claims outside the Tribunal's power 395

VIII. QUANTUM 404

VIII.1. Liability Cap 405

VIII.2. Set-off and liquidation 439

VIII.3. Interest 449

IX. COSTS 454

X. SUMMARY 462

XI. DECISION 476

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GLOSSARY

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I. PERSONS INVOLVED IN THE ARBITRATION

1. THE PARTIES

1.1. CLAIMANT

1. The Claimant is REFINERÍA DE CARTAGENA S.A., a Colombian company ["Claimant", "Reficar"] with principal place of business in Cartagena, Colombia, specialized in the refinement of crude oil and owner of the refinery that is subject to this dispute. Its registered office is:

Carretera a Pascaballos Km 12
Zona Industrial de Mamonal
Cartagena D.T. y C. (Bolívar)
Colombia

Notices to be sent to:
Carrera 14, No. 85 – 68, Oficina 606
Bogotá D.C., Colombia

2. Claimant is represented in this arbitration by Mr. Mike Stenglein, Mr. Adam L. Gray and Mr. Matt Vandenberg from KING & SPALDING LLP¹:

KING & SPALDING LLP
Mike Stenglein
Adam L. Gray
Matt Vandenberg
500 W. 2nd Street, Suite 1800
Austin, TX 78701

Prior to August 3, 2018 Claimant had also been represented by Mr. Daniel Posse of POSSE HERRERA & RUIZ but the law firm was replaced by SUESCÚN ABOGADOS and Santiago Martínez Méndez from GODOY CÓRDOBA on that date². The latter ceased to represent Claimant as of September 10, 2018³. The latest update from Claimant no longer lists SUESCÚN ABOGADOS as one of its representatives⁴.

1.2. RESPONDENTS

¹ Communication C-235.
² Communication C-44.
³ Communication C-49.
⁴ Communication C-235.

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3. The Respondents in these proceedings are three companies. Respondents 1 to 3 will be jointly referred to as "Respondents".

1.2.1. RESPONDENT 1

4. Respondent 1 is CHICAGO BRIDGE AND IRON COMPANY N.V. [“Respondent 1" or “CB&I N.V.”], a Dutch company with operative headquarters in Houston, Texas that was entrusted with building Reficar's refinery in Cartagena. It provides conceptual design, technology, engineering, procurement, fabrication, construction and commissioning services to customers in the energy, petrochemical and natural resources industries. On May 10, 2018 CB&I N.V. merged with McDermott International, Inc. [“McDermott"]⁵. Its address for correspondence is⁶:

McDermott International Holdings B.V.
Prinses Beatrixlaan 35
2595AK, The Hague
Netherlands

1.2.2. RESPONDENT 2

5. Respondent 2 is CB&I UK LTD. ["Respondent 2" or "CB&I UK"] a limited liability company existing and incorporated under the laws of the United Kingdom, 100%-wholly-owned subsidiary of Respondent 1, providing design, design-build, engineering, fabrication, procurement, construction and maintenance services for oil and gas, power, and allied industry projects in, among other places, South America. Its contact details⁷ are as follows:

CB&I UK Limited
2 New Square Bedfont Lakes Business Park
Feltham, Middlesex
United Kingdom

1.2.3. RESPONDENT 3

6. Respondent 3 is CBI COLOMBIANA S.A. [“Respondent 3" or "CBI Colombiana"], a legal entity of private law existing and incorporated under the laws of Colombia, 100%-wholly-owned subsidiary of Respondent 1, providing among other things, general contracting services such as constructing large projects. Its registered office and contact details⁸ are as follows:

CBI Colombiana S.A.
Avenida 82 No. 10 – 62, Piso 6

⁵ Ex. C-1865, p. 12 (pdf p. 14).
⁶ Communication R-220.
⁷ Communication R-220.
⁸ Letter from the Liquidator dated November 11, 2020.

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Bogotá, Colombia

7. Prior to March 8, 2017, Respondents had also been represented by Mr. James L. Loftins and Timothy J. Tyler of VINSON & ELKINS, LLP but the law firm ceased to represent them on that date⁹.

8. On June 29, 2020, Respondents informed the Tribunal that the Colombian Superintendencia de Sociedades [the "SDS"] had ordered the judicial liquidation of CBI Colombiana¹⁰. According to Respondents, CBI Colombiana had not been notified about this action by the SDS and Respondents learned about it through Colombian media.

9. On July 21, 2020, the SDS appointed Mr. Enrique Gómez Martínez as the Liquidator of CB Colombiana [the "Liquidator"]¹¹.

10. The Tribunal issued two letters to the Liquidator, after hearing the Parties and sending the respective drafts to them for comments, in which it invited him to inform the Tribunal whether he would participate in the arbitration proceedings on behalf of CBI Colombiana, and requested that he provide relevant documents to support his status as the Liquidator¹².

11. On November 11, 2020, the Liquidator answered the Tribunal's letters, indicating that CBI Colombiana would "keep on participating in the referred procedures and maintains all the previous arguments, defenses and claims presented before the tribunal and henceforth adheres to all arguments, defenses, writs, requests and filings presented by [CB&I]", and that it "shall not appoint counsel for the proceedings"¹³.

12. On January 21, 2021, the Tribunal sent a third communication to the Liquidator, after sending a draft version to the other Parties for comments¹⁴. In this third letter, the Tribunal informed the Liquidator that, by stating in the Liquidator's Response that CBI Colombiana "adheres" to all past and future arguments, defenses, writs, requests and filings presented by CB&I, Respondent 3¹⁵:

- Has consented to and ratified all past arguments, defenses, writs, requests, and filings presented by CB&I; and

- Will adopt any future arguments, defenses, writs, requests, and filings presented by CB&I and, for this reason, CB&I will not be required to solicit or request CBI Colombiana's consent in advance.

⁹ Communication R-21.
¹⁰ Ex. R-0110.
¹¹ See Auto of July 21, 2020, Expediente 68.336, attached to the Liquidator's letter dated November 11, 2020. The Tribunal notes that according to the same Auto, the previous person appointed to serve as the Liquidator - Mr. Ricardo Echeverri López - did not accept his appointment.
¹² Arbitral Tribunal's letter to the Liquidator of October 11, 2020; Arbitral Tribunal's letter to the Liquidator of November 3, 2020.
¹³ Letter from the Liquidator dated November 11, 2020.
¹⁴ Third Letter to the Liquidator of January 21, 2021.
¹⁵ Third Letter to the Liquidator of January 21, 2021, para. 4.

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13. The Tribunal also requested the Liquidator to promptly inform the Tribunal if such understanding was incorrect. Additionally, the Tribunal also informed that all communications sent to CBI Colombiana would be addressed to the following emails¹⁶:

Attn: Mr. Enrique Gómez Martínez
([email protected])

With copy to: Mr. Juan Gaitán
([email protected]), and

Joaquín Londono
([email protected]).

14. On March 28, 2023, the President received a letter from Mr. Camilo Alberto Guzmán Prieto, announcing his role as the new Liquidator of CBI Colombiana ["New Liquidator"], and attaching the power of attorney granted to Dr. Gustavo Adolfo Romero Torres ["Legal Representative"] for the purpose of representation of CBI Colombiana in the current proceedings¹⁷. The New Liquidator and the Legal Representative have provided the following addresses for notification:

Camilo Alberto Guzmán Prieto
CC 79205016
Calle 82 No. 19 A 14 Piso 3
Bogotá-Colombia
([email protected])

and

Dr. Gustavo Adolfo Romero Torres
([email protected]).

* * *

15. Respondents 1 and 2 are represented in this arbitration¹⁸ by Mr. Stephen B. Shapiro, Ms. Cheryl A. Feeley, Ms. Jessica L. Farmer, Ms. Anna P. Hayes, Mr. Enrique Gómez-Pinzón, Mr. Juan I. Casallas, Mr. Benjamin Wilson, Mr. Stosh M. Silivos, Mr. Jamie J. Hansen, from HOLLAND & KNIGHT LLP and Mr. Thomas F. Holt Jr., Mr. Christopher J. Valente, Mr. Mark E. Haddad, Mr. John C. Blessington, Ms. Lindsay S. Bishop, Mr. Richard F. Paciaroni, Ms. Martha J. Dawson and Mr. Matthew E. Smith from K&L GATES LLP, with notifications and communications to be made at:

¹⁶ A 130; Arbitral Tribunal's letter to the Liquidator dated January 21, 2021.
¹⁷ Communication A 176 with attachments.
¹⁸ Holland & Knight LLP and K&L Gates LLP withdrew as counsel for CBI Colombiana on September 15, 2020.

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Stephen B. Shapiro
Cheryl A. Feeley
Jessica L. Farmer
Anna P. Hayes
HOLLAND & KNIGHT LLP
800 17th Street, N.W., Suite 1100
Washington, DC 20006

Enrique Gómez Pinzón
Juan I. Casallas
HOLLAND & KNIGHT LLP
Carrera 7 # 71-21, Torre A, Piso 8
Bogotá DC, Colombia

Benjamin Wilson
HOLLAND & KNIGHT LLP
2929 Arch Street, Suite 800
Philadelphia, PA 19104

Stosh M. Silivos
HOLLAND & KNIGHT LLP
31 West 52nd Street, 12th Floor
New York, NY 10019

Jamie J. Hansen
HOLLAND & KNIGHT LLP
1801 California Street, Suite 5000
Denver, CO 80202

Thomas F. Holt Jr.
Christopher J. Valente

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K&L GATES LLP
State Street Financial Center
One Lincoln Street
Boston, MA 02111
-and-
1601 K Street NW
Washington, DC 20006

Mark E. Haddad
John C. Blessington
Lindsay S. Bishop
K&L GATES LLP
State Street Financial Center
One Lincoln Street
Boston, MA 02111

Richard F. Paciaroni
K&L GATES LLP
K&L Gates Center
210 Sixth Avenue
Pittsburgh, PA 15222
-and-
Currency House, Tower 1, Level 4
Dubai Int’l Financial Centre, P.O. Box 506826
Dubai, United Arab Emirates

Martha J. Dawson
K&L GATES LLP
925 Fourth Avenue, Suite 2900
Seattle, WA 98104

Matthew E. Smith

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K&L GATES LLP
One New Change London EC4M 9AF
England

* * *

16. Claimant and Respondents will be jointly referred to as the "Parties".

2. THE ARBITRAL TRIBUNAL

17. On July 18, 2016, the Secretary General of the International Court of Arbitration of the International Chamber of Commerce ["Court" of the "ICC"] confirmed Mr. Andrés Jana Linetzky as co-arbitrator upon the nomination by the Claimant, pursuant to Art. 13.2 of the Rules of Arbitration of the ICC in force as from January 1, 2012 [the "ICC Rules"].

18. On July 18, 2016, the Secretary General of the Court confirmed Sir Vivian A. Ramsey as co-arbitrator upon the joint nomination of the Respondents, pursuant to Art. 13.2 of the ICC Rules.

19. On August 19, 2016, the Secretary General of the Court confirmed Mr. Juan Fernández-Armesto as President of the Arbitral Tribunal upon the joint nomination of the co-arbitrators, pursuant to Art. 13.2 of the ICC Rules.

20. The arbitrators stated that notifications and communications arising in the course of the arbitration should be made at:

Andrés Jana Linetzky
JANA & GIL DISPUTE RESOLUTION
Av. Andrés Bello 2711, Piso 9
Las Condes
Santiago 7550611, Chile
E-mail: [email protected]

Sir Vivian A. Ramsey
The Old Vicarage, School Lane
Swanley Village
Kent BR8 7PJ, United Kingdom
E-mail: [email protected]

Juan Fernández-Armesto
ARMESTO & ASOCIADOS
General Pardiñas 102, 8º izda.
28006, Madrid, Spain
E-mail: [email protected]

3. THE SECRETARIAT OF THE COURT

21. The administration of this arbitration was granted to the Secretariat of the Court, initially in the persons of Rocío Digón and Marek Krasula and finally in the person

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of Paul Di Pietro, who acted as Counsel for the case management. All notifications and communications should be addressed at:

Paul Di Pietro
INTERNATIONAL COURT OF ARBITRATION
INTERNATIONAL CHAMBER OF COMMERCE
SICANA, Inc.
140 East 45th Street, Suite 14C,
New York, NY 10017, USA
E-mail: [email protected]

4. THE ADMINISTRATIVE SECRETARY AND DEPUTY ADMINISTRATIVE SECRETARY

22. On October 17, 2016, the Parties agreed to the appointment of Mrs. Deva Villanúa as Administrative Secretary¹⁹. On August 31, 2018, the Tribunal proposed to appoint Ms. Bianca McDonnell as Deputy Administrative Secretary which both Parties accepted²⁰. Ms. McDonnell renounced on March 3, 2020²¹. On December 16, 2020, the Tribunal proposed to appoint Mr. Adam Jankowski as Deputy Administrative Secretary which both Parties agreed to. All notifications and communications should be addressed at:

Deva Villanúa
DEVARB
Príncipe de Vergara 109
28002 Madrid, Spain
E-mail: [email protected]

Adam Jankowski
ARMESTO & ASOCIADOS
General Pardiñas 102, 8º izda.
28006 Madrid, Spain
E-mail: [email protected]

¹⁹ Communications C-13 and R-11.
²⁰ Communication A 44, Communications C-50 and R-59.
²¹ Letter to the Parties of 3 March 2020.

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II. PROCEDURAL HISTORY

23. This arbitration first started in 2016. The anomalous duration of these arbitral proceedings is due to a multitude of procedural incidents and the extreme complexity of the case at hand.

24. The Tribunal has so far issued 156 communications containing decisions regarding procedural incidents and four Procedural Orders. The Parties have presented over twenty substantive submissions in total, and over 200 communications each.

25. It is impossible to summarise each submission, communication and decision in this chapter devoted to recapitulating the procedural history. The Tribunal, however, confirms that it has carefully analysed all submissions, communications and evidence submitted by the Parties and that all decisions are reasoned on the basis of such submissions.

1. ARBITRATION AGREEMENT

26. The present arbitration arises out of or in connection with the EPC Contract [the "EPC Agreement(s)", "EPC Contract(s)" or simply "Contract" or "Agreement"] for the expansion and modernisation of the Cartagena Refinery [the "Refinery"], entered into between Claimant and Respondents on June 15, 2010.

27. By Request for Arbitration dated March 8, 2016 [“RfA"], Reficar sought to initiate arbitration proceedings against Respondents, under Section 4 of the Dispute Resolution Agreement ["DRA"] between the Parties, which contains the following arbitration clause²²:

"4 Arbitration Agreement

4.1 Any Dispute not amicably resolved by the Parties pursuant to the terms of Clause 3 of this Agreement must be referred to and finally resolved by arbitration administered by the ICC and conducted under the ICC Rules as modified by this Agreement. The taking of evidence and the disclosure of documents shall be in accordance with the IBA Rules on the Taking of Evidence in International Commercial Arbitration (1 June 1999).

4.2 A Party wishing to refer a Dispute to arbitration shall file a Request as a Claimant in accordance with the ICC Rules, without designating an arbitrator.

4.3 Each Respondent shall file its Answer in accordance with the ICC Rules. If there are two or more Respondents they may agree to file a joint Answer.

4.4 The Arbitral Tribunal shall comprise three persons. The Claimant and the Respondent shall each be entitled to nominate one member (together, the "Nominated Arbitrators") of the Arbitral Tribunal to the ICC for appointment. If a Party fails to appoint its Nominated Arbitrator within 30 days of the date

²² JX-007, pdf pp. 8-13.

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of filing of the Answer by the Respondent, the missing Nominated Arbitrator shall be chosen by the ICC.

The third arbitrator (the "Independent Arbitrator") shall be chosen by the Nominated Arbitrators. If the Independent Arbitrator is not chosen by the Nominated Arbitrators within 30 days of the date of confirmation, by the ICC, of the appointment of the later of the two Nominated Arbitrators, the Independent Arbitrator shall be chosen by the ICC.

4.5 When appointing the Arbitral Tribunal, the Claimant and the Respondent (in respect of the Nominated Arbitrators) and the Nominated Arbitrators or the ICC Court (as applicable, in respect of the Independent Arbitrator), applying Articles 9(1) and 10(2) (or their replacements) of the ICC Rules where appropriate, shall be at liberty to appoint any person it or they regard, expressly taking into account the nature of the relevant Dispute or Disputes and the Project Agreements, as having suitable skills and experience to act as arbitrator in relation to the Dispute or (if relevant) the Disputes. The Independent Arbitrator shall be fully fluent in English and Spanish. In order to assist the Nominated Arbitrators or the ICC Court, as applicable, with the appointment of the Independent Arbitrator, the Claimant shall provide to the Secretariat (upon filing a Request pursuant to the ICC Rules) or the Nominated Arbitrators (upon confirmation by the ICC of their appointment), as applicable, a copy of this Agreement and the identity of any Parties added to or removed from this Agreement under Clause 6 together with a written request that the Independent Arbitrator, prior to signing a statement of independence pursuant to Article 7.2 of the ICC Rules, be required to consider the identities of the Parties listed in Appendix 2 and the changes, if any, thereto under Clause 6. The statement of independence shall be completed as if all Parties to this Agreement were parties to the Dispute(s) and the prospective Independent Arbitrator shall be made aware that he or she may, if appointed to determine a Dispute, be requested also to determine any other Dispute between any or all such Parties.

4.6 When considering the identity of the person to be appointed as the Independent Arbitrator in relation to a Dispute, the Nominated Arbitrators or the ICC Court, as applicable, shall take account of any representations any Party may make as to (i) whether or not there is, or is likely to be, any other Dispute which is related to the Dispute, and (ii) as to the subject-matter or nature of such actual or potential other Dispute.

4.7 If the Nominated Arbitrators and the Independent Arbitrator are of the opinion that there may be, prima facie, (i) one or more common issues of fact or law which may arise in determining the Dispute and any other Dispute, (ii) a risk of conflicting awards or legal obligations in resolving a Dispute and any other Dispute, or (iii) any other relationship between the Dispute and the other Dispute(s) which makes it appropriate to do so, then:

(a) If the Arbitral Tribunal for the Dispute and the other Dispute(s) are being appointed at the same time, the Nominated Arbitrators and the Independent Arbitrator shall conform a single Arbitral Tribunal for all the Disputes; and

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(b) If the Arbitral Tribunal for the Dispute is being appointed when the Arbitral Tribunal for the other Dispute has already been appointed, the Parties will proceed as stated under section 4.15 in order to determine whether or not the same Arbitral Tribunal shall decide on the new Dispute(s).

4.8 If, in accordance with Clause 4.7, the members of the Arbitral Tribunal are the same persons as arbitrators as already form the Arbitral Tribunal for any other Dispute, the Arbitral Tribunal shall appoint as chairman the person who is acting or acted as chairman on the Arbitral Tribunal in that other Dispute.

4.9 The place and seat of arbitration shall be New York. The Arbitral Tribunal may, however, hold hearings, meetings, or sessions anywhere convenient and as agreed to by all Parties to the arbitration.

4.10 The language of the arbitral proceedings shall be English and Spanish, as appropriate.

4.11 The Parties acknowledge that, for the purposes of the arbitral proceedings, the Arbitral Tribunal will have the original version of the Project Agreements in the language in which they have been executed as binding agreements between the parties. In the event that there is a discrepancy between the original executed version and any translation of such executed version, the original executed version shall prevail.

4.12 The Arbitral Tribunal shall be governed by and shall apply the substantive law governing the Agreement under which the Dispute(s) arise. If the Dispute(s) refers to two (2) or more agreements with different applicable law, the Arbitral Tribunal shall apply the applicable law of the Agreement to the part of the Dispute(s) that refers or relates to each Agreement. The decision of the Arbitral Tribunal shall be final and binding to the fullest extent permitted by law. For the avoidance of doubt, the parties expressly exclude any and all rights to appeal, set aside or otherwise challenge any award by the arbitrators, insofar as such exclusion can be validly made under applicable law or international treaty.

4.13 The Arbitral Tribunal shall neither have nor exercise any power to act as amicable compositeur or ex aequo et bono, or to award special, indirect, consequential or punitive damages.

4.14 In addition to the authority conferred on the Arbitral Tribunal by the ICC Rules, the Arbitral Tribunal shall have the power to grant any provisional measures that it deems appropriate, including but not limited to provisional injunctive relief and/or specific performance, and any provisional measures ordered by the Arbitral Tribunal shall, to the extent permitted by applicable law, be deemed to be a final award on the subject matter of the measures and shall be enforceable as such.

4.15 Subject to Clause 4.17, if an Arbitral Tribunal has been appointed to hear both a Dispute and any other Dispute, at any time either:

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(i) before Terms of Reference have been signed or approved in accordance with Articles 18.2 or 18.3 of the ICC Rules (whichever is applicable); or

(ii) after such signature or approval of the Terms of Reference if the Arbitral Tribunal receives the written agreement of all Parties which are parties to the arbitral proceedings of the Dispute (such agreement not to be unreasonably withheld),

the Arbitral Tribunal shall consolidate the arbitral proceedings of the Dispute and the arbitral proceedings of the other Dispute(s) into one set of arbitral proceedings on such procedural conditions as it may determine. The Parties confirm that one of the intentions and purposes of this Agreement is to provide a mechanism for the consolidation and determination of multiple Disputes between multiple Parties pursuant to multiple Project Agreements.

4.16 Subject to Clause 4.17, and whether or not it has been appointed to hear both a Dispute and any other Dispute and whether or not it has consolidated any Disputes pursuant to Clause 4.15, an Arbitral Tribunal shall have the following powers, to be exercised on or with such conditions as it may determine are appropriate in the circumstances:

(i) to direct that any hearings in the arbitral proceedings in relation to the Dispute take place concurrently with the arbitral proceedings of any other Dispute;

(ii) to allow, only upon the application of a Party, one or more third parties to be joined in the arbitral proceedings (and each Party hereby confirms that it consents to being so joined);

(iii) to direct that any documents served or disclosed and any evidence given in the arbitral proceedings of the Dispute be made available to the Parties which are involved in any other arbitral proceedings of any other Dispute; and

(iv) to make such other directions as may be considered by the Arbitral Tribunal to be necessary or expedient to ensure that the Dispute and any other Dispute are resolved justly, efficiently and consistently.

4.17 The Arbitral Tribunal may only exercise such powers in Clauses 4.15 and 4.16 if all parties to the relevant arbitral proceedings have been given a reasonable opportunity to make representations to the Arbitral Tribunal in relation to the exercise of such powers.

4.18 If there is more than one Dispute or more than two Parties are involved in any arbitral proceedings, the Arbitral Tribunal shall have all powers necessary to establish any supplementary procedural rules required or desirable in view of the multi-Dispute and/or multi-Party nature of the arbitral proceedings. Such powers shall include the ability to issue one or more Arbitration Awards during or at the conclusion of the arbitration as considered necessary or appropriate or expedient by the Arbitral Tribunal.

4.19 Each Party which is a party to any arbitral proceedings commenced under this Agreement hereby waives for itself, its assets and its revenues any and all

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immunity from jurisdiction, investigation or enforcement that it may enjoy, whether pursuant to international agreements or the domestic laws of any such Party, and further waives any objection to arbitral proceedings being brought in accordance with the terms of this Agreement. If, in any jurisdiction in which arbitral or other proceedings are being taken against a Party, that Party has the power to claim for itself, its assets and its revenues any immunity from service or any immunity from jurisdiction, suit, judgment, execution, attachment or injunction (whether before judgment, in aid of execution or otherwise) or other legal process, including the defenses of "sovereign immunity" or "act of State", or if the court of its own motion grants such immunity to that Party or its assets, such Party hereby irrevocably waives such immunity to the fullest extent permitted by the law of that jurisdiction and consents generally to the giving of any relief or the issue of any process in connection with proceedings to uphold and enforce this Agreement and any Arbitration Award made pursuant to it, including, without limitation, the making, enforcement, or execution against any property whatsoever (irrespective of its use or intended use), of any Arbitration Award or any order or judgment which may be made or given in such proceedings.

4.20 A Party may seek to enforce an Arbitration Award in a court of law in accordance with the terms of this Agreement. The Parties undertake to implement without delay the provisions of any Arbitration Award.

4.21 Unless otherwise decided in the Arbitration Award, any Arbitration Award for the payment of money shall be paid in the currency or respective currencies for payment specified in the applicable Project Agreement or Project Agreements underlying the Dispute or Disputes and with interest accruing from the date of injury until payment, at the rate or respective rates of interest accruing on late payments under the applicable Project Agreement or Project Agreements underlying the Dispute or Disputes.

4.22 The Arbitral Tribunal shall be empowered to award all or a portion of the costs of the arbitration, and arbitration fees, to either Party. Any Party unsuccessfully resisting enforcement of any Arbitration Award must pay the enforcing Party's cost of those proceedings".

2. SEAT OF THE ARBITRATION, LANGUAGE AND APPLICABLE LAW

28. As per Section 4.9 of the DRA and the Parties' agreement²³, the seat of this arbitration is New York City, New York.

29. The language of the arbitration is English and Spanish, as appropriate, pursuant to Section 4.10 of the DRA²⁴, para. 116 of the Terms of Reference and para. 2 of Procedural Order [“PO”] No. 5 – Annex V²⁵.

²³ Communication sent by King & Spalding to the Secretariat on 30 March 2016; Communication sent by Holland & Knight to the Secretariat on 1 April 2016; Communication of the Secretariat dated 4 April 2016.
²⁴ JX-007, p. 10; in communications C-14 and R-13, the Parties have confirmed their agreement to have the proceedings conducted in English and Spanish.
²⁵ TofR, para. 116 states: "The language of the arbitration shall be English and Spanish, as appropriate, pursuant to clause 4.10 of the DRA"; PO No. 1 – Annex V states: "The language of the arbitral proceedings shall be English and Spanish, as appropriate".

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30. In accordance with the above provisions, the Final Award [also referred to as the "Award"] is drafted in English, with a translation into Spanish by a translator of the Tribunal's choosing to follow once the English version of the Final Award is notified to the Parties²⁶.

31. The law applicable to the dispute will be determined by the Tribunal in section IV infra.

3. COMMENCEMENT OF THE ARBITRATION

32. On March 8, 2016 Claimant filed its RfA.

33. On March 25, 2016 the Secretariat was notified by Respondents that the RfA had not been served at the correct address. Upon discussion, the Parties agreed that the formal date of service of the RfA should be March 24, 2016²⁷. Accordingly, Respondents were granted until April 25, 2016 to present their answer to the RfA²⁸.

34. On April 15, 2016 Respondents requested an extension of the term for submitting the Answer to the RfA²⁹.

35. The Secretariat extended the term until May 25, 2016 and on that date Respondents submitted the Answer to the RfA, with an accompanying counterclaim ["Answer to RfA and Counterclaim"]³⁰.

36. On June 27, 2016 Claimant submitted its reply to the counterclaim ["Claimant's Reply to Counterclaim"].

4. APPOINTMENT OF ARBITRATORS

37. On June 24, 2016 Claimant appointed Mr. Andrés Jana as co-arbitrator³¹. On that same date Respondents appointed Sir Vivian Ramsey as co-arbitrator³². On July 18, 2016, in accordance with Art. 13(2) of the ICC Rules, the Secretary General of the Court confirmed these nominations³³.

38. On August 15, 2016 the co-arbitrators jointly nominated Mr. Juan Fernández-Armesto as president of the Tribunal. On August 19, 2016, in accordance with Art. 13(2) of the ICC Rules, the Secretary General of the Court confirmed Mr. Fernández-Armesto's appointment³⁴.

²⁶ See communications A 172, A 174, A 177-A 180.
²⁷ Communication sent by Holland & Knight to the Secretariat on March 25, 2016; Communication sent by King & Spalding to the Secretariat on March 30, 2016.
²⁸ Communication of the Secretariat dated March 30, 2016.
²⁹ Communication sent by Holland & Knight to the Secretariat on April 15, 2016.
³⁰ Communication R-4.
³¹ Communication of King & Spalding dated June 24, 2016.
³² Communication of Holland & Knight dated June 24, 2016.
³³ Communication of the Secretariat dated July 18, 2016.
³⁴ Communication of the Secretariat dated August 19, 2016.

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5. TERMS OF REFERENCE, PROCEDURAL ORDER NO. 1 AND PROCEDURAL TIMETABLE

39. On August 31, 2016 the Arbitral Tribunal sent communication A 1 to the Parties, asking them to produce a summary of their positions for the purposes of the Terms of Reference ["TofR"]³⁵, which they did on September 16, 2016.

40. On October 4, 2016 the Tribunal issued communication A 4, inviting the Parties to submit their comments on the draft of the TofR. In response to this request, the Parties submitted several observations on October 7, 2016³⁶.

41. On October 24, 2016, the Parties and the members of the Tribunal held a case management conference call to discuss the procedural measures to be adopted pursuant to Art. 22(2) of the ICC Rules.

42. On October 28, 2016, the Parties and the members of the Tribunal signed the TofR electronically, which was transmitted to the Court at its session of December 15, 2016³⁷ in accordance with Art. 23(2) of the ICC Rules.

Procedural Order No. 1

43. On that same date, the Tribunal sent a draft PO No. 1 to the Parties and invited them to provide their comments³⁸, which they did on November 16, 2016³⁹. On November 29, 2016 the Tribunal issued PO No. 1 determining the conduct of the proceedings and annexing the Procedural Timetable⁴⁰.

44. On April 25, 2017 the Tribunal amended PO No. 1 and issued PO No. 1 Bis to accommodate the Parties' agreement to submit certain exhibits jointly [the "Joint Exhibits"]⁴¹.

45. On September 1, 2017 the Tribunal amended PO No. 1 for a second time and issued PO No. 1 Ter⁴². The Parties had jointly requested the Tribunal to extend their deadline for the submission of additional Joint Exhibits due to the volume and complexity of preparing them⁴³.

46. The Tribunal again amended PO No. 1 on October 18, 2017 when it issued PO No. 1 Quater⁴⁴. The Parties had again requested the amendment of PO No. 1 to have more time to prepare the Joint Exhibits⁴⁵.

³⁵ Communication A 1.
³⁶ Communications C-13 and R-11.
³⁷ Letter from the ICC dated December 15, 2016.
³⁸ Communication A 7.
³⁹ Communications C-16 and R-16. The Parties brought additional comments in communications C-17, C-18 and R-17.
⁴⁰ Letter from the Arbitral Tribunal dated November 29, 2016 transmitting PO No. 1 and annexes.
⁴¹ Communication A 14.
⁴² Communication A 21.
⁴³ Communications C-29 and R-34
⁴⁴ Communication A 23.
⁴⁵ See Communication R-38.

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47. On October 30, 2017 Claimant submitted on behalf of all Parties a set of Joint Exhibits relating to certain contractual agreements between the Parties which the Tribunal acknowledged the day after⁴⁶.

48. On November 24, 2021 the Tribunal made a final amendment to PO No. 1 and issued PO No. 1 Quinquies incorporating the Parties' agreements on the submission of statements of costs⁴⁷.

6. WRITTEN SUBMISSIONS AND DOCUMENT PRODUCTION

A. First Written Submissions

49. On April 28, 2017 Claimant submitted the Non-Exhaustive Statement of Claim⁴⁸. On that same day Respondents filed their Statement of Counterclaim⁴⁹.

B. Document Production

50. On June 30, 2017 both Claimant and Respondents submitted their respective Document Production Schedules [“DPS”]: Claimant presented 144 requests for document production⁵⁰ and Respondents 114 such requests⁵¹.

51. Claimant annotated Respondents' DPS on July 17, 2017⁵² and Respondents did the same to Claimant's DPS on July 21, 2017⁵³. The DPS exercise was highly contentious and the Parties' arguments, including about the counterparty's cooperativeness, led the Tribunal to convene the Parties to a conference call, which was held on July 18, 2017⁵⁴.

52. On August 8, 2017 the Tribunal issued its decisions on Document Production⁵⁵.

C. Second Written Submissions

53. On March 16, 2018 the Parties filed their second round of submissions:

- Claimant submitted its Exhaustive Statement of Claim [or "ESOC"] and its Non-Exhaustive Defense to the Counterclaim [“NEDOCC"];

- Respondents submitted a Non-Exhaustive Defense to the Statement of Claim ["NESOD"] as well as an Exhaustive Statement of Counterclaim ["ESOCC"].

⁴⁶ See communications A 24 and C-30.
⁴⁷ Communication A 168.
⁴⁸ Communication C-20.
⁴⁹ Communication R-24.
⁵⁰ Communication C-25.
⁵¹ Communication R-30.
⁵² CB&I's DPS - Annotated by Reficar, dated July 17, 2017.
⁵³ Reficar's DPS - Annotated by CB&I, dated July 21, 2017.
⁵⁴ See communications A 17, A 18 and A 19.
⁵⁵ Communication A 20.

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D. Third Written Submissions

54. On June 28, 2019 both Parties filed their third round of submissions:

- Claimant submitted its Reply to Respondents' NESOD ["Reply"] as well as its Exhaustive Defense to Counterclaim ["EDOCC"];

- Respondents submitted their Exhaustive Statement of Defense ["ESOD"] as well as a Reply to Claimant's Non-Exhaustive Statement of Defense to Counterclaim [the "Respondents' Reply on Counterclaim"].

55. On September 9, 2019 Respondents submitted a communication in which they alleged that Claimant had violated PO No. 1 by improperly presenting new arguments and evidence in its Reply/EDOCC⁵⁶.

56. After hearing both Parties⁵⁷, the Tribunal decided that:

- Claimant's Reply could contain arguments and evidence which rebut Respondents' NESOD, and that Claimant's Third Written Submissions were prima facie compliant with PO No. 1;

- Claimant's Third Written Submissions were prima facie responsive to Respondents' Second Written Submissions and needed not be amended;

- Respondents' request that the Parties be ordered to meet and confer to discuss new arguments and all other requests for relief were now moot;

- Both Parties had an exceptional and limited opportunity to submit certain additional arguments or to marshal certain additional evidence, under strict conditions and subject to approval by the Tribunal.

E. Supplemental Submissions

57. On January 10, 2020 the Tribunal granted several requests by the Parties⁵⁸ to file additional brief written submissions as well as supplemental witness statements and expert reports⁵⁹ after giving the Parties the opportunity to discuss the issue. The Tribunal decided:

- To grant Claimant's request to file a written submission with a length of no more than 25 pages, two supplemental witness statements of no more than 10 pages, excluding attachments and exhibits, and a supplemental expert report from Deloitte with a length of no more than 25 pages excluding attachments and exhibits, by February 1, 2020;

- To grant Respondents an extension to the date for notification of witnesses to be called until February 3, 2020 for those witnesses who had provided further evidence by February 1, 2020.

⁵⁶ Communication R-76.
⁵⁷ See communications R-81, C-73 and C-76.
⁵⁸ Communication A 85.
⁵⁹ Communications A 85, C84, C-88, R-88, and R-92.

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7. CONTRALORÍA PROCEEDING AND POS NO. 2 AND 3

59. Following Respondents' Second Written Submissions, the Tribunal became aware of the existence of an Ordinary Fiscal Liability Proceeding of the Colombian Contraloría General de la República [the "Contraloría"] against Respondents [the "Contraloría Proceeding"].

60. On March 20, 2018 Claimant submitted a request for the Tribunal's assistance with regard to a document on which Respondents were seeking to rely in their Second Written Submissions, which, according to Claimant, had been inadvertently produced to Respondents during the document production exercise and contained information protected by attorney-client privilege⁶⁰.

61. On March 21, 2018 Respondents sent a communication denying that the document was subject to privilege or confidentiality or had been inadvertently produced by Claimant; rather, Respondents stated that it had been sent to them by the Republic of Colombia through the Contraloría as evidence supporting the Contraloría Proceeding⁶¹.

62. On the same day the Tribunal requested that the Parties attempt to resolve the issue between them⁶².

63. On April 26, 2018 Claimant and Respondents jointly advised the Tribunal that they had been unable to reach an agreement on the issue of privilege attaching to the document and requested the opportunity to provide written submissions articulating their respective positions⁶³.

64. In a separate communication of that same day, Claimant informed the Tribunal that it had notified Respondents of additional objections it had in relation to other documents tendered with Respondents' Second Written Submissions [together, the "Contested Documents"]. Claimant additionally requested that the Tribunal issue an interim measure preventing Respondents from disclosing confidential information whilst making submissions on the Contested Documents⁶⁴.

65. Respondents immediately replied confirming that they would not reveal the substance of the Contested Documents in their submissions on the matter⁶⁵.

66. On April 30, 2018, in light of Respondents' representation, the Tribunal declined to issue interim measures, but directed the Parties to treat the Contested Documents, pro tem, as subject to confidentiality and privilege⁶⁶.

⁶⁰ Communication C-33.
⁶¹ Communication R-43.
⁶² Communication A 34.
⁶³ Communications C-35 and R-48.
⁶⁴ Communication C-36.
⁶⁵ Communication R-49.
⁶⁶ Communication A 37.

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67. On May 14, 2018 the Parties submitted their respective submissions regarding the Contested Documents⁶⁷.

68. On the same day, Respondents informed the Tribunal that Claimant had sent a letter to the Contraloría notifying it that Respondents had used documents obtained from the Contraloría Proceeding in this arbitration, which was subsequently reported in Colombian news⁶⁸. Respondents requested that the Tribunal find Claimant to be in breach of its confidentiality obligation under the DRA⁶⁹.

69. On May 30, 2018 Claimant requested that the Tribunal reject Respondents' requests for relief, stating that it was obligated to report Respondents' allegedly wrongful use of confidential information from the Contraloría Proceeding under Colombian law⁷⁰. Claimant further argued that as the Contested Documents were obtained through the Contraloría Proceeding, they were not covered by the confidentiality clause in Section 8 of the DRA⁷¹.

70. On July 16, 2018 Claimant raised additional objections to 29 documents relied upon by Respondents, which are allegedly confidential and contain material protected by attorney-client privilege⁷² [collectively with all documents objected to by Claimant, "Total Contested Documents"].

71. On July 23, 2018 Respondents submitted their response, opposing the exclusion of the 29 documents⁷³.

72. The Parties exchanged several additional submissions addressing Respondents' request and the use of the Total Contested Documents in these proceedings⁷⁴.

73. On August 22, 2018 the Tribunal issued PO No. 2, resolving the question of the admissibility of the Total Contested Documents in this arbitration⁷⁵. PO No. 2 established that the Parties were allowed to use the Total Contested Documents in their submissions, on the assumption that the Contraloría would promptly release them to the public⁷⁶. The Tribunal also found that Claimant had breached the confidentiality regime of this arbitration, but that no sanctions against Claimant were warranted⁷⁷.

74. On September 25, 2018 the Tribunal issued communication A 47, addressing clarifications raised by Claimant regarding certain aspects of PO No. 2.

⁶⁷ Communications C-37 and R-50.
⁶⁸ Communication R-51, para. 7, citing Exhibit 1.
⁶⁹ Communication R-51, para. 12.
⁷⁰ Communication C-38, pp. 3-4.
⁷¹ Communication C-38, p. 4. Claimant states that the confidentiality clause of the DRA does not prevent Claimant from notifying the Contraloría about the use of documents that were obtained in the Fiscal Proceeding in this arbitration; further, Section 8.2. of the DRA specifically permits the disclosure of documents in good faith in accordance with the requirements of any applicable laws or any competent authority.
⁷² Communication C-41.
⁷³ Communication R-53.
⁷⁴ Communications R-52, C-39, C-40, R-54, C-43, R-56 and C-45.
⁷⁵ See PO No. 2, para. 15.
⁷⁶ PO No. 2, paras. 155-156.
⁷⁷ PO No. 2, para. 164.

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75. On November 19, 2018 the Tribunal decided that the deadline for submission of the Third Written Submissions would be delayed until January 31, 2019 to allow for the resolution of the dispute as to the Total Contested Documents⁷⁸.

76. On December 19, 2018 the Tribunal issued PO No. 3 resolving the issues related to the Total Contested Documents and the Contraloría Proceeding. The Tribunal decided, inter alia⁷⁹:

- That documents obtained from the case file of the Contraloría Proceeding were admissible in this arbitration and the reserva attaching to such documents would be strictly protected by the arbitration's confidentiality regime;

- To authorize the Claimant to have access to the case file of the Contraloría Proceeding, obtained by virtue of its participation in a public acción de tutela filed against the Contraloría by Foster Wheeler USA Corporation and Process Consultants, Inc. ["Foster Wheeler"] before the 26th Criminal Circuit Judge in Bogotá;

- To protect the documents subject to attorney-client privilege pursuant to PO No. 2;

- To order the Parties to attempt to come to an agreement on any disputes that may arise regarding other documents that they consider are subject to attorney-client privilege, following the review of the case file of the Contraloría Proceeding.

77. On January 4, 2019 the Tribunal addressed a request by Claimant⁸⁰ to be granted leave by the Tribunal to submit a derecho de petición - solicitud de información y copias de documentos de proceso de responsabilidad fiscal [the "Solicitud"] to the Contraloría along with excerpts of PO No. 3, to which Respondents objected⁸¹.

78. The Tribunal refused to make an order as a result of the correspondence of the Parties, noting that:

- The Parties were authorized to use documents obtained from the case file of the Contraloría Proceeding in the arbitration,

- It considered that the Solicitud was unnecessary for the purposes of the arbitration, and

- That it did not consider that Claimant needed to submit the Solicitud to use the documents in this confidential arbitration seated in New York.

⁷⁸ Communication A 50, p. 5.
⁷⁹ PO No. 3.
⁸⁰ Communications C-56 and C-57.
⁸¹ Communications R-66 and A 54.

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79. On January 17, 2019 the Tribunal granted Claimant's request⁸² to provide the Contraloría with a copy of the decision portion of PO No. 3 after hearing both Parties on the matter⁸³.

Update to the Contraloría File

80. On January 22, 2021 the Tribunal affirmatively decided on the admissibility of a supplemental submission by CB&I containing documents from the Contraloría Proceedings⁸⁴ and delivered a clarification of its decision three days later⁸⁵.

81. On February 25, 2021 the Tribunal issued an affirmative decision concerning the admissibility of three of the abovementioned files, while at the same time ordering that only an abridged version be introduced into the record⁸⁶.

Further documents from the Contraloría File

82. On March 26, 2021 the Tribunal issued a decision concerning CB&I's request to present new evidence from the Contraloría File⁸⁷, comprising 54 email communications, charts and additional materials from the Contraloría Proceeding [the "54 Documents"] and five "Free Versions". The Tribunal decided to rule on the admissibility of both sets of documents after receiving Reficar's comments⁸⁸.

83. On April 15, 2021 the Tribunal admitted the 54 Documents into the case record⁸⁹ and permitted Reficar to submit counterevidence in order to protect the equality of arms⁹⁰. On April 27, 2021 the Tribunal admitted into the case file the excerpts of the free version testimony statements provided by the witnesses in the arbitration and to reject the non-witness free version testimony⁹¹.

8. INTERIM MEASURES

A 105

84. On June 29, 2020, in connection with the impending liquidation of CBI Colombiana, Respondents 1 and 2 requested interim measures which would protect their status in the arbitration and which would entitled them to receive notice prior to Reficar contacting the SDS (the entity which ordered the liquidation)⁹².

85. On July 7, 2020 the Tribunal granted provisional interim measures and ordered⁹³:

"Claimant not to undertake any actions that could lead to the disruption of the status quo in the current proceedings (including by undertaking

⁸² Communication C-58.
⁸³ Communication A 57.
⁸⁴ Communication A 131.
⁸⁵ Communication A 132.
⁸⁶ Communications A 136.
⁸⁷ Communications A 148.
⁸⁸ A 148 paras. 28 and 33.
⁸⁹ Communication A 151, para. 27.
⁹⁰ A 151, para. 30.
⁹¹ Communication A 154, para. 36.
⁹² Communication R-110.
⁹³ Communication A 96.

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communication and/or coordination with the [SDS]), without giving reasonable prior notice to the Tribunal and Respondents".

86. The following day Claimant asked for a confirmation that the provisional interim measures did not affect its information duties vis-à-vis the SDS on matters which are not related to the arbitration⁹⁴; the Tribunal provided such confirmation on the next day⁹⁵.

87. On August 4, 2020 Respondents 1 and 2 reiterated their request for interim measures⁹⁶.

88. On July 24, 2020 Claimant objected to Respondents' request for interim measures⁹⁷; however, on August 11, 2020 Claimant agreed that a narrowed version of the interim measures could be ordered by the Tribunal⁹⁸.

89. On September 2, 2020 the Tribunal and the Parties held a conference call in which the situation of CBI Colombiana, as well as the interim measures requested by Respondents 1 and 2, were discussed⁹⁹.

90. On September 7, 2020 the Tribunal made its decision, ordering the replacement of the provisional interim measures with the following interim measures ["Communication Interim Measures"], taking effect immediately¹⁰⁰:

"The Tribunal instructs Claimant not to communicate or coordinate with the [SDS] or the liquidator of CBI Colombiana (or with members of his team), in relation to the liquidation of CBI Colombiana or the present arbitration proceedings, without giving reasonable prior notice to the Tribunal and Respondents".

91. On September 30, 2020 the Tribunal and the Parties held another conference call in which the Communication Interim Measures were further discussed¹⁰¹.

92. On November 30, 2020 the Tribunal partially lifted the Communication Interim Measures from the date of dispatch of the letter to the Liquidator, which would confirm CBI Colombiana's participation in this arbitration¹⁰².

93. On January 21, 2021 the Tribunal clarified its decision A 123 and specified that the lifting of the Communication Interim Measures only applied to Claimant's communications with the Liquidator¹⁰³. Thus, the Communication Interim Measures were modified as follows¹⁰⁴:

⁹⁴ Communication C-120.
⁹⁵ Communication A 101.
⁹⁶ Communication R-115.
⁹⁷ Communication C-117.
⁹⁸ Communication C-122.
⁹⁹ Communications A 103 and A 104.
¹⁰⁰ Communication A 105, pp. 4-5.
¹⁰¹ Communication A 107.
¹⁰² Communication A 123.
¹⁰³ Communication A 130, para. 82.
¹⁰⁴ Communication A 130, para. 83.

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"The Tribunal instructs Claimant not to communicate or coordinate with the Superintendencia de Sociedades in relation to the present arbitration proceedings without giving reasonable prior notice to the Tribunal and Respondents".

PO No. 4

94. On November 27, 2019, Claimant filed a Request for Emergency Conservatory and Interim Measures¹⁰⁵ ["Claimant's Request for Interim Measures"] requesting certain interim measures to protect the alleged harm that could result from Respondents' difficult financial situation¹⁰⁶; Respondents submitted an opposing statement on December 16, 2019¹⁰⁷ [“Respondents' Opposition to Claimant's Request for Interim Measures"].

95. On January 22, 2020 the Tribunal issued PO No. 4:

- Ordering Respondents to notify the Tribunal and Claimant in advance of any either significant corporate restructuring or alienation, transfer or sale of assets over the value of a certain threshold, but

- Denying Claimant's requests to order Respondents to provide security and to maintain the status quo and to order Respondents to refrain from taking any measures that would aggravate the Parties' dispute as well as any other requests for relief¹⁰⁸.

96. On March 22, 2021 the Tribunal issued a communication clarifying that PO No. 4 remained valid and binding upon the Parties and determining that the threshold for disclosure under PO No. 4, which had not been articulated in the first place, should be 5% of McDermott's assets¹⁰⁹.

9. HEARING PREPARATIONS AND SUBMISSION OF NEW CONTRALORÍA EVIDENCE

97. On March 1, 2021 Respondents submitted a communication to the Tribunal seeking leave to introduce three requests for dispositive pre-hearing relief¹¹⁰ to which Claimant objected¹¹¹. The Tribunal decided on the issue on April 1, 2021¹¹², denying CB&I the requested leave.

98. On March 1, 2021 the Tribunal issued a decision regarding seven disputed instances concerning the text of the draft protocol for the Hearing ["DHP"]¹¹³ which had been proposed jointly by the Parties¹¹⁴.

¹⁰⁵ Communication C-90.
¹⁰⁶ Ex. C-1865, pp. 87, 89-99.
¹⁰⁷ Communication R-98.
¹⁰⁸ PO No. 4, para. 74.
¹⁰⁹ Communication A 146.
¹¹⁰ Communication R-165.
¹¹¹ Communication C-174.
¹¹² Communication A 149.
¹¹³ Communications C-164 and R-163.
¹¹⁴ Communication A 138.

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99. On March 12, 2021 Claimant submitted an update regarding the amounts it claims in the arbitration¹¹⁵.

100. On March 18, 2021 the Tribunal ordered a cut-off date of April 5, 2021 (six weeks before the scheduled Hearing) for the Parties to present any new procedural submissions of any type¹¹⁶.

101. On March 22, 2021 the Tribunal circulated a communication to the Parties¹¹⁷ containing the finalized Hearing Protocol ["HP"] reflecting the changes proposed by the Parties¹¹⁸. On the same day, the Parties informed the Tribunal that they had agreed on a set of principles for the organization of the second block of the Hearing as foreseen under paras. 81 and 82 of the HP¹¹⁹.

102. In its communication A 150, issued on April 12, 2021 the Tribunal ruled on two requests submitted by the Parties:

- CBI's request to submit a video of the Refinery called "Experiencia 360 – Refinería de Cartagena"¹²⁰: the Tribunal decided that this video was not necessary in light of the upcoming virtual Site Visit, but that CB&I could approach the Tribunal again if it felt that the video contained essential footage that had not been accessible during the virtual Site Visit.

- CBI's request for an order that the witnesses who provided their witness statements in the arbitration in English must also testify in English (rather than in Spanish, irrespective of their preferences) at the Hearing¹²¹, which the Tribunal denied¹²².

103. On April 30, 2021 each Party filed a submission with a summary of its respective case in preparation of the Hearing [the "Hearing Summary Submission"].

10. HEARING AND SITE VISIT

104. Originally, the Hearing had been scheduled for one month between October 15, 2018 and November 15, 2018¹²³.

105. Due to several delays in the procedural calendar (originated in part by the document production), on April 18, 2018 the Parties suggested a new timetable for the Hearing. Therefore, the Hearing was postponed to April 15, 2019 to May 10, 2019¹²⁴ and the Site Visit was set for March 19 and 20, 2019.

106. In 2019 the scheduled period for the Hearing was shifted once more due to the volume and complexity of the arbitration proceeding. After negotiations and with

¹¹⁵ Claimant's Updated Statement of Claim Amounts.
¹¹⁶ Communication A 144.
¹¹⁷ Communication A 145.
¹¹⁸ Communications C-173 and R-170.
¹¹⁹ Communications C-183 and R-179.
¹²⁰ Communication R-186.
¹²¹ Communication R-187.
¹²² Communication A 150.
¹²³ PO No. 1, Annex 1.
¹²⁴ See communications A 36, C-34 and R-45.

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the agreement of the Parties, the Tribunal issued Annex I Sexies to PO No. 1 Quater, determining a split Hearing period from April 20 to May 1, 2020 [the "First Block"] and from May 12 to May 22, 2020 [the "Second Block"]¹²⁵. However, the Parties could not agree on whether additional hearing time would be needed, so the Tribunal reserved June 8 to June 19, 2020 pro tem and uttered that it would finally decide on whether to use additional hearing time at a later stage¹²⁶. With the same amendment the scheduled Site Visit was shifted to December 9 and 10, 2019.

107. On November 25, 2019 the Tribunal sent a communication addressing the Parties' disagreement as to the appropriate length of the Hearing, deciding that four weeks would be sufficient time for the Parties to properly present their case at the Hearing¹²⁷.

108. On December 2, 2019 the Tribunal was forced to cancel the Site Visit due to an unexpected medical emergency affecting one of its members¹²⁸. On December 4, 2019 the Tribunal, after consulting the Parties, decided to hold the Site Visit on June 9, 2020¹²⁹.

109. In early 2020 the COVID-19 pandemic hit the world and also affected the conduct of the arbitration, rendering an in-person Hearing in April/May 2020 unviable. On September 7, 2020 the Tribunal decided to hold the First Block virtually by videoconference.

110. On February 1, 2021 the Tribunal ordered a virtual Hearing in two Blocks in May-June and June-July 2021 and decided that the Site Visit would be held virtually at the beginning of the Hearing dates¹³⁰.

111. On April 29, 2021 the pre-Hearing conference was held virtually. Apart from general matters concerning the Hearing, the participants discussed Reficar's motion to cancel the Virtual Site Visit¹³¹.

112. On May 1, 2021 weighing the high informational value of the Virtual Site Visit against the health hazards associated with recording it, the Tribunal decided for the Virtual Site Visit to proceed, but with the maximum precautions possible¹³².

113. The Hearing was held virtually in the two Blocks. The First Block started on May 17, 2021 and ended one day earlier than envisaged on June 4, 2021 and the Second Block started on June 28, 2021 and ended on July 16, 2021.

11. POST-HEARING PERIOD

¹²⁵ See communication A 67.
¹²⁶ See communication A 65.
¹²⁷ Communication A 78.
¹²⁸ Communication A 81.
¹²⁹ Communication A 82.
¹³⁰ Communication A 133.
¹³¹ Communication A 155.
¹³² Communication A 156.

[Page 34]

114. On July 19, 2021 the Tribunal updated the Procedural Timetable to include the procedural steps that had to be taken after the Hearing¹³³. The Tribunal prepared a list of questions for the Parties and circulated this list on July 30, 2021¹³⁴.

115. On October 22, 2021 the Parties submitted their first post-Hearing briefs [ "CPHB" and "RPHB"].

116. On November 10, 2021 the Parties submitted their second post-Hearing submissions ["CPHB2” and “RPHB2"].

117. On November 16, 2021 the Tribunal circulated a communication in which it confirmed and enumerated the general principles governing the sessions of closing oral arguments [the "Oral Closings"]¹³⁵.

118. The Oral Closings were held virtually on November 18 and 19, 2021; the first day was dedicated to the Parties' closing presentations and the second day to a discussion on the submission of statements of costs by the Parties¹³⁶.

119. At the end of the Hearing Mr. Stenglein, Counsel for Claimant and Mr. Holt, Counsel for Respondents, both confirmed that there were no due process issues which they would like to raise¹³⁷.

120. On November 24, 2021 the Tribunal issued a communication to memorialize the agreements that had been reached during the Oral Closings among all participants¹³⁸. Among other things, the Tribunal set deadlines for the Parties to submit their Statements of Costs and outlined how the Statements of Costs should be structured.

121. Claimant sent its Statement of Costs to the Tribunal on December 20, 2021, whereas Respondents 1 and 2 did so on February 11, 2022¹³⁹. The Tribunal circulated the Parties' Statements of Costs to the counterparty on the following day¹⁴⁰.

12. SUMMARY OF THE SUBMISSIONS AND EVIDENCE

122. The Parties have filed the following main substantive submissions:

¹³³ PO No. 1 Quater – Annex I Decies.
¹³⁴ Communication A 164.
¹³⁵ Communication A 166.
¹³⁶ See PO No. 1 Quater – Annex I Decies and PO No. 1 Quater – Annex I Undecies.
¹³⁷ See Tr. 7238:25-7239:13.
¹³⁸ Communication A 168.
¹³⁹ See Exhs. C-0232 and R-0077.
¹⁴⁰ Communication A 169.

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123. The Parties have jointly marshalled over 6000 numbered factual exhibits (a number of which are collective exhibits with hundreds of individual documents) and over 1500 legal exhibits into the record:

[Page 36]

124. The Parties have also submitted chronologies of facts¹⁴¹ and an agreed chronological index of exhibits¹⁴².

125. There are multiple factual exhibits that are repeated on the record, brought by different Parties and sometimes even by the same Party multiple times. The fact that the Tribunal refers to a single exhibit does not imply that the Tribunal has failed to review all the versions of the exhibit brought into the record.

126. The Parties have jointly relied on the testimony of dozens of fact witnesses, who have signed a total of over a hundred witness statements:

¹⁴¹ Claimant's Chronology dated March 20, 2017.
¹⁴² See Joint Communication C-211 & R-201.

[Page 37]

[Page 38]

[Page 39]

127. The Parties have jointly presented nearly 30 expert reports prepared by the following expert witnesses¹⁴³:

128. In addition, the following 11 Joint Expert Reports (some accompanied by voluminous addenda in Excel format) have been submitted by the Parties:

¹⁴³ The expert witnesses of both sides have also submitted appendices, attachments and exhibits to their reports, but they will not all be listed for reasons of procedural efficiency.

[Page 40]

129. The following Hearing Transcripts are on record:

¹⁴⁴ The Tribunal notes that the page numbers do not exactly match – this is due to the transcripts for each day being followed by a varying number of pages with a glossary of terms and their appearance in the text.

[Page 41]

130. The following Hearing Exhibits were presented:

[Page 42]

131. For ease of reference, the Tribunal notes that CB&I has referred to the following individually-marked exhibits from the Contraloría casefile¹⁴⁵:

¹⁴⁵ The Contraloría casefile is a voluminous folder; CB&I has referred to certain documents identified in that folder using the numbers listed by the Tribunal. ↩

[Page 43]

13. ADVANCE ON COSTS

132. The Court initially fixed the advance on costs at USD 650,000¹⁴⁶. On July 5, 2018 the Court readjusted and increased the advance on costs to USD 2,055,000¹⁴⁷.

133. On April 29, 2021 the Court readjusted the advance on costs and increased in to USD 3,850,000¹⁴⁸.

134. Finally, on January 25, 2022 the Court increased the advance on costs to USD 5,400,000¹⁴⁹.

135. The Parties have contributed to the advance on costs in the following amounts¹⁵⁰:

136. Any amounts remaining in the case finances shall be reimbursed to the Parties pursuant to the Court's decision of May 5, 2023¹⁵¹.

14. TIME PERIOD FOR THE ISSUANCE OF THE AWARD AND CLOSING OF THE PROCEEDINGS

137. Originally, the ICC Court had fixed February 28, 2019 as the time limit for the Final Award¹⁵². The Court amended the deadline for rendering the Final Award on multiple occasions, on:

• February 7, 2019, extended until August 31, 2020;

¹⁴⁶ Financial table of September 21, 2016. ↩
¹⁴⁷ Secretariat's letter and Financial table of July 12, 2018. ↩
¹⁴⁸ ICC communication of April 29, 2021. ↩
¹⁴⁹ ICC communication of January 25, 2022. ↩
¹⁵⁰ Financial table of May 5, 2023. ↩
¹⁵¹ Financial table of May 5, 2023. ↩
¹⁵² ICC communication of March 2, 2017. ↩

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• August 6, 2020, extended until December 30, 2020;
• December 3, 2020, extended until August 31, 2021;
• August 5, 2021, extended until October 29, 2021;
• October 7, 2021, extended until February 28, 2022;
• April 7, 2022, extended until November 30, 2022;
• November 3, 2022, extended until March 31, 2023;
• March 2, 2023, extended until May 31, 2023; and
• May 4, 2023, extended until August 31, 2023.

138. Therefore, this Final Award is rendered within the granted time limit.

139. On March 24, 2023, pursuant to pursuant to Art. 27 of the ICC Rules, the Tribunal declared the proceedings closed with respect to the matters to be decided in the Final Award.

140. On March 31, 2023 the Arbitral Tribunal submitted the draft Final Award to the Court, pursuant to Art. 33 of the ICC Rules. On May 5, 2023 the Court approved the draft Final Award¹⁵³.

¹⁵³ Communication from the ICC Secretariat dated May 5, 2023. ↩

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III. INTRODUCTION AND PENDING PROCEDURAL MATTERS

1. OVERVIEW

141. The dispute before the Tribunal arises out of one of the biggest industrial projects in Latin America. The following paragraphs aim at providing a brief and simplified summary of the dispute, which should not be interpreted as a precise and exhaustive factual recollection.

142. Reficar owned an old refinery in Colombia and decided that it was time it underwent major improvements and modernisation. CB&I was the contractor in charge of the engineering, procurement and construction ["EPC"] project.

143. There is no dispute that the performance of the contract suffered around a two-year delay and the EPC costs amounted to USD 5.9 billion.

144. Reficar brings three major claims in this arbitration:

145. First, at the beginning the EPC project was conceived as a lump sum contract, but was later changed into a cost reimbursable one. Reficar argues that it was tricked by CB&I into that change [the “Pre-Contract Claim"] and asks for USD 4 billion in compensation for additional costs.

146. Alternatively, Reficar makes the argument that CB&I breached its contractual duties to only incur reasonable costs and claims either USD 1.77 billion for the breach or USD 1.59 billion for reimbursement of unreasonable costs.

147. Reficar also alleges that CB&I breached its duties with regard to controlling the Project Schedule.

148. CB&I, on the other hand:

149. First, denies ever having tricked Reficar into changing the remuneration scheme and argues that Reficar made the change at free will and after careful third-party advice.

150. Second, affirms that all costs incurred were reasonable and proper and that it diligently progressed with the Project and so, no contractual duties were infringed.

151. Finally, CB&I counterclaims that Reficar still owes it overdue invoices. Reficar says that none of the unpaid invoices are due.

152. Before analysing these claims, the Tribunal will address certain pending procedural issues.

2. PENDING PROCEDURAL MATTERS

153. There are three procedural matters that require a decision from the Tribunal: the evidentiary weight attributable to witnesses who failed to attend the Hearing (2.1.) negative inferences from deficient document production (2.2.) and the shifting of the burden of proof (2.3.).

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2.1. EVIDENCE BY WITNESSES WHO FAILED TO APPEAR AT THE HEARING

154. Two of Reficar's witnesses, Messrs. Christian Mantilla and Andrés Riera, failed to appear at the Hearing.

155. Mr. Mantilla is a civil engineer employed by Reficar's consultant, Foster Wheeler; he has acted as the vice-president of the Project, vice-president of pre-commissioning and start-up and advisor to Ecopetrol, Reficar's parent company¹⁵⁴. Mr. Riera likewise served as the vice-president of the Project and vice-president of pre-commissioning and start-up; he later served as technical manager and refining advisor to Ecopetrol¹⁵⁵.

156. Reficar announced the witnesses' unavailability on May 13, 2021 (i.e., four days prior to the Hearing) for Mr. Mantilla¹⁵⁶ and on May 20, 2021 for Mr. Riera¹⁵⁷ (i.e., four days into the Hearing). CB&I submitted its objections to both announcements on May 13¹⁵⁸ and May 21¹⁵⁹, 2021, respectively.

157. Having heard the Parties at the Hearing regarding the witnesses' failure to appear, the Tribunal allowed the Parties to make written briefings on this issue in their post-hearing submissions and postponed its decision until the Award¹⁶⁰.

The Parties' positions

158. Reficar argues that both witnesses' statements should be kept in the record with full evidential value. According to Reficar, Mr. Mantilla had been instructed by his employer, Foster Wheeler, to refrain from attending the Hearing in light of the then-recent order issued by the Contraloria attributing fiscal liability to Foster Wheeler and some of its employees (with the two witnesses being directly affected); this order in Reficar's view constituted exceptional circumstances, justifying the witness's last-minute failure to appear¹⁶¹. Mr. Riera could not attend the Hearing for the same underlying reason of having to manage the aftermath of the Contraloria order, meaning that his absence was also caused by exceptional circumstances and thus justified¹⁶².

159. CB&I requests that the Tribunal grant no evidentiary weight to the witness statements submitted by Messrs. Mantilla and Riera¹⁶³. The reasons allegedly justifying the witnesses' last-minute failure to appear at the Hearing did not constitute exceptional circumstances and thus, the Tribunal should strike out the witness statements of Messrs. Mantilla and Riera, as well as any portions of expert reports submitted by Reficar which were based on information provided by these two witnesses¹⁶⁴. CB&I also argues that it would be highly prejudiced if the

¹⁵⁴ Mantilla CWS; Mantilla CWS II; RPHB, para. 25. ↩
¹⁵⁵ Riera CWS, RPHB, para. 25. ↩
¹⁵⁶ Communication C-214. ↩
¹⁵⁷ Communication C-220. ↩
¹⁵⁸ Communication R-203. ↩
¹⁵⁹ Communication R-209. ↩
¹⁶⁰ Tr. 6902:11-6913:15; 6918:24-6923:7. ↩
¹⁶¹ Communication C-214. ↩
¹⁶² Communication C-220. ↩
¹⁶³ RPHB, para. 24. ↩
¹⁶⁴ RPHB, para. 35. ↩

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Tribunal accepted information from witnesses CB&I was unable to cross-examine¹⁶⁵.

Tribunal's decision

160. The Tribunal must decide whether it should strike from the record the witness statements of Messrs. Mantilla and Riera, as well as any portions of the expert reports submitted by Reficar which were based on information provided by these two witnesses.

161. In accordance with the Hearing Protocol agreed by the Parties and the Tribunal¹⁶⁶,

"[t]he Tribunal shall not consider the Witness Statement of a Fact Witness who fails to appear if the Party proffering the Fact Witness in question fails to provide a legitimate reason for the Fact Witness's failure to appear".

162. The Tribunal must, then, decide, whether the failure to appear by Reficar's two witnesses was justified by "legitimate reasons".

163. Reficar avers that the Tribunal itself had previously considered the Contraloria proceedings to be an "exceptional circumstance" for the purposes of the current arbitration; thus, the new order issued by the Contraloria constituted a legitimate reason for the witnesses' failure to appear at the Hearing¹⁶⁷.

164. CB&I argues that the Contraloria proceedings had by the time of the Hearing been ongoing for years and the particular decision of the Contraloria invoked by Reficar's witnesses preceded the notification of their absence by two weeks' time¹⁶⁸. And it would be highly prejudiced if the Tribunal accepts information from witnesses CB&I was unable to cross-examine¹⁶⁹.

165. The Tribunal finds that both Parties are partially correct.

166. On the one hand, Reficar is correct in arguing that the Contraloria proceedings have been recognised by the Tribunal as "exceptional circumstances"¹⁷⁰; thus, upon the issuance of a new order by the Contraloria, that had a specific impact on the personal situation of the two witnesses, these witnesses indeed had a "legitimate reason" not to appear at the Hearing.

167. CB&I, on the other hand, is correct in arguing that its situation could be prejudiced by the fact that it has been unable to cross-examine two of Reficar's witnesses, whom it had specifically selected for these purposes.

168. As a result, the Tribunal will apply additional scrutiny to all the evidence in the case file based on the witness statements of Messrs. Mantilla and Riera and take account in assessing the weight given the fact that there was no opportunity for CB&I to cross-examine these witnesses. The Tribunal confirms, however, its prior decision

¹⁶⁵ RPHB, paras. 33-34. ↩
¹⁶⁶ HP, dated March 22, 2021, para. 79(b). ↩
¹⁶⁷ Communication C-214; communication C-220. ↩
¹⁶⁸ RPHB, paras 29-31. ↩
¹⁶⁹ RPHB, paras. 33-34. ↩
¹⁷⁰ Communication A 151 at para. 22; communication A 136 at para. 23. ↩

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not to strike out these witness statements, or any portions of the expert reports submitted by Reficar, based on the information provided by these witnesses.

2.2. NEGATIVE INFERENCES FROM DEFICIENT DOCUMENT PRODUCTION

169. Claimant asks for the Tribunal to draw negative inferences from Respondents' failure to produce documents ordered by the Tribunal¹⁷¹.

170. These pertain to documents that, according to Claimant, "should have existed in the ordinary course of business, but CB&I has refused to produce them"¹⁷², including categories such as internal analyses, memoranda, reports, communications, data underlying CB&I's methods of calculating productivity, and the close-out report for the Project¹⁷³.

171. CB&I has, in its opinion, fully complied with the Tribunal's orders regarding document production¹⁷⁴. CB&I avers that Reficar's request should be denied, because Reficar has failed to present a narrowly tailored request, to prove that CB&I effectively withheld any documents, and to argue that the standard for drawing adverse inferences has been met¹⁷⁵.

Tribunal's decision

172. Reficar brings a request under Art. 9.5 of the IBA Rules on the Taking of Evidence in International Arbitration, which provides that¹⁷⁶:

"[i]f a Party fails without satisfactory explanation to produce any Document requested in a Request to Produce to which it has not objected in due time or fails to produce any Document ordered to be produced by the Arbitral Tribunal, the Arbitral Tribunal may infer that such document would be adverse to the interests of that Party".

173. As regards the standard for drawing negative inferences from failures in document production, it is widely accepted that such inferences may only be drawn in exceptional circumstances¹⁷⁷.

174. Reficar only makes a generic request for a declaration "that these documents and the evidence contained therein would be adverse to the interests of CB&I"¹⁷⁸. Consequently, Claimant has failed to establish a specific and narrow request of what inferences exactly it wishes the Tribunal to draw from CB&I's alleged failure to

¹⁷¹ ESOC, paras. 528-538. ↩
¹⁷² ESOC, paras. 528. ↩
¹⁷³ ESOC, paras. 535-536. ↩
¹⁷⁴ ESOD, paras. 1601-1602, 1609. ↩
¹⁷⁵ ESOD, paras. 1597-1600. ↩
¹⁷⁶ CL-0734. ↩
¹⁷⁷ RL-489, S. Greenberg and F. Lautenschlager, "Adverse Inferences in International Arbitral Practice", ICC International Court of Arbitration Bulletin, Vol. 22, number 2, (2011), p. 43 (pdf p. 1). ↩
¹⁷⁸ ESOC, paras. 534-536. Reficar provides certain examples of documents that CB&I allegedly failed to produce but only provides arguments as to their existence and concludes each "example" with the same generic request that "the Tribunal should draw an adverse inference that such documents would be adverse to CB&I's interests". ↩

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produce documents, nor that there are exceptional circumstances which justify such an extreme measure.

175. There is also no evidence in the record suggesting that CB&I was in fact in possession of the requested documents, but willfully refused to produce them despite being ordered to do so by the Tribunal.

176. In the present case, the Tribunal rejects Claimant's request.

2.3. SHIFTING OF BURDEN OF PROOF

177. Reficar also requests that the Tribunal apply in the Award the "dynamic burden of proof" theory under Art. 167 of the Colombian General Code of Procedure and shift the burden of proof for a number of issues from Reficar to CB&I¹⁷⁹: CB&I is the Party with superior or exclusive access to certain evidence, and it should thus be the Party having to meet the burden of proof¹⁸⁰.

178. CB&I avers that Reficar's request for shifting the burden of proof in this arbitration cannot be brought under a procedural rule provided for in Colombian law¹⁸¹. In any event, the conditions of the provision of Colombian law invoked by Reficar, such as the timeliness of the request and appealability, are not met¹⁸².

Tribunal's decision

179. Reficar requests that the Tribunal apply in this Award Art. 167 of the Colombian General Code of Procedure to shift the burden of proof from Reficar to CB&I for several issues, for which, in Reficar's view, CB&I is the Party with superior or unique access to the underlying evidence.

180. CB&I asks the Tribunal to deny Reficar's request, as the underlying provision under Colombian law does not apply to this arbitration and, even if it did, Reficar's request is unacceptable: the Tribunal cannot shift the burden of proof in the Award as required by Reficar – such decision would have to be taken well in advance, but Reficar failed to request a prior decision.

181. The Tribunal sides with CB&I.

182. The relevant provision states as follows¹⁸³:

¹⁷⁹ Reply, paras. 1005-1007. ↩
¹⁸⁰ Reply, paras. 1008-1015. ↩
¹⁸¹ RPHB, para. 667. ↩
¹⁸² RPHB, para. 668-669. ↩
¹⁸³ CL-0535; English translation: ↩
"ARTICLE 167. BURDEN OF PROOF. It is incumbent on the parties to prove the factual basis of the rules enshrining the legal effect that they are pursuing.
However, depending on the characteristics of the case, the court may, sua sponte or at the request of a party, distribute, the burden of proof by ordering the production of evidence, during examination of the evidence or at any time during the procedure before it announces its decision, and demanding that a particular fact be proven by the party that is in a more favorable situation to provide the evidence or to clarify the disputed facts. A party will be considered best placed to prove a fact due its proximity to the evidence, because it has the evidence in its possession, due to special technical circumstances, because it played a direct role in

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“ARTÍCULO 167. CARGA DE LA PRUEBA. Incumbe a las partes probar el supuesto de hecho de las normas que consagran el efecto jurídico que ellas persiguen.

No obstante, según las particularidades del caso, el juez podrá, de oficio o a petición de parte, distribuir, la carga al decretar las pruebas, durante su práctica o en cualquier momento del proceso antes de fallar, exigiendo probar determinado hecho a la parte que se encuentre en una situación más favorable para aportar las evidencias o esclarecer los hechos controvertidos. La parte se considerará en mejor posición para probar en virtud de su cercanía con el material probatorio, por tener en su poder el objeto de prueba, por circunstancias técnicas especiales, por haber intervenido directamente en los hechos que dieron lugar al litigio, o por estado de indefensión o de incapacidad en la cual se encuentre la contraparte, entre otras circunstancias similares.

Cuando el juez adopte esta decisión, que será susceptible de recurso, otorgará a la parte correspondiente el término necesario para aportar o solicitar la respectiva prueba, la cual se someterá a las reglas de contradicción previstas en este código [...]" [Emphasis added].

183. Paragraph 1 of Art. 167 establishes the general principle that each party must prove the facts on which it relies to request the application of a certain legal norm. The application of this general principle is accepted by both Parties and will be applied by the Tribunal, with the caveats explained in subsequent sections.

184. Reficar requests that the Tribunal also apply the second paragraph of Art. 167, which grants the Colombian judge the possibility of shifting the burden of proof to the party which is in a more favourable situation to marshal the evidence. The option to make such a decision is restricted by several conditions: the decision must be subject to appeal and should be pronounced in the early stages of the proceeding, as the party burdened with the evidence must be given the opportunity to discharge its duty.

185. As an initial matter, it is doubtful whether para. 2 of Art. 167, which grants a power to Colombian judges (“el juez podrá"), can find application to arbitrators in an arbitration seated in New York. Be that as it may, Reficar's request does not meet the high threshold set forth by para. 2 of Art. 167:

• First, the request must be made early in the procedure, so that the party burdened with the duty has sufficient time to marshal the evidence - in the current proceeding, Reficar only made a request for the application of para. 2 of Art. 167 when it filed its Reply¹⁸⁴;

the events that gave rise to the dispute, or because the other party is denied due process or lacks capacity, among other similar circumstances.
When the court adopts this decision, which will be subject to appeal, it shall grant the corresponding party the time necessary to provide or request the evidence in question, which will be subject to the rules of rebuttal specified in this code".
¹⁸⁴ Reply, paras. 1005-1010. ↩

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• Second, Reficar has reiterated its request in its PHB¹⁸⁵, asking the Tribunal to apply para. 2 of Art. 167 in the Award; but the provision contains a clear prohibition of the shifting of the burden of proof at the stage of rendering the Award; instead, it must precede the Award (en cualquier momento del proceso antes de fallar);
• Third, the decision by the judge must be subject to appeal – this is impossible in an arbitration, reinforcing the finding that this rule is not to be applied in arbitral proceedings.

186. Thus, in this Award, the Tribunal will apply the ordinary rules governing the burden of proof under Colombian law.

¹⁸⁵ CPHB, paras. 143, 179, 526-527. ↩

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IV. LAW APPLICABLE TO THE DISPUTE

187. Two major bodies of law find application to the current dispute: first, and foremost, the contract between the Parties (1.) and, second, generally applicable law of either of the two jurisdictions elected by the Parties – Colombian law or the law of the State of New York ["New York Law"] (2.).

188. The Tribunal will also analyse the law applicable to its power to grant indirect or consequential damages (3.).

1. THE EPC CONTRACT

189. Reficar and the CB&I entities are bound by six agreements collectively known as the EPC Contracts.

190. Out of these six agreements (i) only two are, strictly speaking, EPC contracts, (ii) the rest are ancillary contracts.

191. (i) The engineering, construction and procurement contracts are:

• The "Onshore Contract" between Reficar and CB&I Colombiana, governed by Colombian law, for work (mainly construction) performed by CBI Colombiana in Colombia¹⁸⁶,
• The "Offshore Contract" between Reficar and CB&I UK, governed by New York law, for design, engineering, procurement and other work performed by CB&I UK primarily outside of Colombia¹⁸⁷.

192. (ii) The ancillary contracts are:

• A parent guarantee between Reficar and CB&I N.V., governed by New York law, for CB&I Colombiana's obligations under the Onshore Agreement [the "Onshore Parent Guarantee"]¹⁸⁸,
• A parent guarantee between Reficar and CB&I N.V., governed by New York law, for CB&I UK's obligations under the Offshore Agreement [the "Offshore Parent Guarantee"]¹⁸⁹,
• The "Coordination Agreement" executed by Reficar, CB&I UK and CBI Colombiana, governed by New York law, providing for the coordination of obligations under the Onshore and Offshore Contracts and the resolution of any interpretation conflicts¹⁹⁰,

¹⁸⁶ JX-002; JX-003; JX-006. ↩
¹⁸⁷ JX-004; JX-005; JX-006. ↩
¹⁸⁸ JX-008, pdf pp. 1-16. ↩
¹⁸⁹ JX-008, pdf pp. 17-32. ↩
¹⁹⁰ JX-007, pdf pp. 29-44. ↩

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• The DRA between Reficar and CB&I UK, CBI Colombiana, CB&I, N.V., governed by New York law and providing for the system of resolving any disputes between the Parties under the EPC Contracts¹⁹¹.

2. COLOMBIAN OR NEW YORK LAW

193. The Parties were very much aware of the fact that the EPC work was governed by two distinct contracts – the Onshore and the Offshore Contracts – subject to different applicable laws – Colombian and New York law, respectively – and that discussions in that regard might arise in case of dispute. This is why Sections 4.1¹⁹² and 4.2.2¹⁹³ of the Coordination Agreement provide that neither Party can excuse its liability alleging that the claim against it was brought under the wrong Contract:

"4.1 Claims by the Owner

Each Contractor undertakes not to contend, in connection with any Dispute (including any alternative dispute resolution process, arbitration or judicial proceeding) or otherwise, that it is not liable in respect of any Dispute made as aforesaid on the grounds that such Dispute should properly have been made under a Contract other than the one under which it is made.

[...]

4.2.2 The Owner undertakes not to contend, in connection with any Dispute (including any alternative dispute resolution process, arbitration or judicial proceeding or otherwise, that it is not liable in respect of any Dispute made as aforesaid on the grounds that such Dispute should properly have been made under a Contract other than the one under which it is made".

194. Since it was the Parties' intention that liability be enforced, even if claimed under the wrong Contract, it naturally follows that the same should result if the claim is brought under the wrong applicable law. Consequently, provided that liability exists under any of the Contracts and either under Colombian or New York law, such liability will be enforced, and the party liable has waived its right to argue that the dispute should properly have been brought under another Contract or another legal system.

195. CB&I has raised as a defensive argument, that some of Reficar's claims should be dismissed, because they were pleaded under the wrong law. The Tribunal finds this argument non convincing and contrary to the Parties' express agreement.

196. Notwithstanding the above, the Tribunal will now make an analysis of the applicable law for the three different claims brought by Reficar: pre-contract claims (A.), contract claims (B.), and the fiduciary liability claim (C.).

¹⁹¹ JX-007, pdf pp. 3-27. ↩
¹⁹² JX-007, p. 34. ↩
¹⁹³ JX-007, pp. 34-35. ↩

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A. Pre-contract claims

197. The majority of the controversies as to the applicable law arise as regards Reficar's pre-contractual claims against CB&I.

Reficar's position

198. Reficar avers that the dual contract arrangement (Onshore and Offshore Contracts) was made for tax purposes rather than to create separate obligations and defenses under the distinct agreements¹⁹⁴. The contractual origin of the claim is therefore, irrelevant.

199. But, if the pre-contractual claim was to be pinpointed to one of the Contracts, it would be the Onshore Contract, because the majority of misconduct and consequences for pre-contractual phase occurred in Colombia¹⁹⁵. Hence, pre-contractual claims are governed by Colombian law.

200. Reficar additionally argues that the application solely of Colombian law is also in line with the Parties' approach during the Hearing, as only Colombian law experts were called¹⁹⁶, and is further reinforced by notions of fairness¹⁹⁷.

CB&I's position

201. CB&I agrees with Reficar that Onshore Contract-related pre-contractual claims are governed by Colombian law¹⁹⁸.

202. However, according to CB&I, for Offshore Contract-related pre-contractual claims, New York law applies due to the choice-of-law provisions in the EPC Agreements and pursuant to the ICC Rules' mandate for the Tribunal to apply the law chosen by the Parties¹⁹⁹.

203. CB&I argues that New York courts construe pre-contractual claims to be covered as also "arising out of" or "related to" the contract – thus New York law applies to Offshore Contract-related pre-contractual claims²⁰⁰.

204. As a consequence, CB&I argues that Reficar either does not assert or has abandoned any claims in relation to the Offshore Agreement. Even if this is not the case, Reficar has failed to establish its case under New York law, which is required for any Offshore Contract claims²⁰¹.

Discussion

205. Reficar brings pre-contract claims based on CB&I's alleged breach of precontractual information duties. In Reficar's opinion, had it not been for CB&I's

¹⁹⁴ CPHB, para. 33. ↩
¹⁹⁵ CPHB, paras. 28, 43; Reply, para. 15; ESOC, para. 549. ↩
¹⁹⁶ CPHB, para. 29. ↩
¹⁹⁷ CPHB, para. 29. ↩
¹⁹⁸ RPHB, para. 11. ↩
¹⁹⁹ RPHB, para. 10. ↩
²⁰⁰ RPHB, para. 10. ↩
²⁰¹ RPHB, para. 68, fn. 141. ↩

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misleading information, it would have entered into the EPC Contracts under different pricing terms.

206. Reficar has concentrated its pre-contract claims under Colombian law. CB&I argues that this choice should lead to the dismissal of any pre-contract claims arising out of the Offshore Contract.

207. The Tribunal will, ultimately, reject Reficar's pre-contract claims, but not because of the choice of applicable law.

208. As a point of departure, the Tribunal recalls that its mandate, in accordance with Art. 21(1) of the ICC Rules, is to apply the law chosen by the Parties²⁰²:

"Applicable Rules of Law

1 The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate".

209. According to CB&I, this means that New York law applies to those pre-contract claims that relate to the Offshore Agreement, as provided for under Section 4.12 of the DRA:

"4.12 The Arbitral Tribunal shall be governed by and shall apply the substantive law governing the Agreement under which the Dispute(s) arise. If the Dispute(s) refers to two (2) or more agreements with different applicable law, the Arbitral Tribunal shall apply the applicable law of the Agreement to the part of the Dispute(s) that refers or relates to each Agreement". [Emphasis added]

210. The Tribunal does not agree with CB&I.

211. Reficar's pre-contract claim refers to a breach of precontractual duties during the negotiation of the EPC Contract, generally speaking. Reficar has not singled out breaches which would specifically affect its consent to the Onshore or the Offshore Contract - Reficar refers to general misinformation on CB&I's side regarding the estimate of costs and work schedule involved in the Contract. Hence, the Tribunal cannot split the dispute and attribute a part of it "to the related agreement" – as envisaged in the DRA.

212. The Parties had also foreseen this situation when drafting the EPC Contract. The recitals of the DRA – the agreement specifically entered into to govern the process of dispute resolution, and which forms part of the EPC Contract in general – favour that only one law be applied²⁰³:

"[t]he inter-related nature of the Project Agreements means that Disputes may arise under one Project Agreement which are related to Disputes which arise under one or more other Project Agreements, and it is in the interest of the

²⁰² RPHB, para. 10, citing to ICC Rules, Art. 21(1). ↩
²⁰³ JX-007, para. B, p. 4. ↩

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Parties that such related Disputes be resolved in a consistent manner". [Emphasis added]

213. In this case, Reficar chose Colombian law – an option open to it, according to the DRA, which CB&I cannot question invoking Section 4.12 of the DRA, because the dispute affects both the Onshore and the Offshore Agreements and cannot be split.

214. But even if CB&I were right, and the pre-contract claim were divisible and partially attributable to each Contract (quod non), Section 4.1 of the Coordination Agreement would put an end to CB&I's argument, as it bars a party from bringing precisely the excuse CB&I is now pleading²⁰⁴:

"4.1 Claims by the Owner

Each Contractor undertakes not to contend, in connection with any Dispute (including any alternative dispute resolution process, arbitration or judicial proceeding) or otherwise, that it is not liable in respect of any Dispute made as aforesaid on the grounds that such Dispute should properly have been made under a Contract other than the one under which it is made".

215. In any event, the discussion above is purely academic, because ultimately, the Tribunal will dismiss these claims for lack of merit, irrespective of the legal system to be applied.

B. Contract claims

216. Reficar also brings a claim for contractual breaches based on the fact that CB&I allegedly charged for costs it was not contractually allowed to recover, which must be returned to Reficar; CB&I's failures also led Reficar to incur other additional costs on the Project.

217. As regards contractual liability, the legal framework is essentially confined to contractual provisions. The only area in which the discussion on Colombian or New York law becomes relevant concerns the interpretation of the liability cap provisions.

218. Both Parties agree that the contractual provision which could lead to the lifting of the liability cap in the current dispute is TC 8.1.1 (iii).

219. TC 8.1.1 (iii) in the Spanish version of both the Onshore and Offshore Contracts stipulates that the liability cap in the EPC Contract does not apply to²⁰⁵:

"(iii) responsabilidad derivada de cualquier fraude, Culpa Grave o Dolo, incurridos por el Contratista",

which in the English version provides as follows²⁰⁶:

²⁰⁴ JX-007, p. 34. ↩
²⁰⁵ JX-002, p. 51; JX-004, pp. 49-50. ↩
²⁰⁶ JX-002, pp. 180-181; JX-004, p. 166. ↩

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"(iii) liability arising from any fraud, Gross Negligence or Willful Misconduct committed by the Contractor".

220. In order to fully ascertain the meaning of the concepts enumerated as exceptions to the liability cap - fraude, culpa grave, dolo and fraud, gross negligence, willful misconduct - the Tribunal will undertake an analysis guided by the definitions section of both the Onshore and Offshore Contract.

221. The Onshore Contract provides that the terms "Culpa Grave”²⁰⁷ and “Dolo”²⁰⁸ have the meaning given to them under the Colombian Civil Code [the "CCC"]. The equivalent terms "Gross Negligence"²⁰⁹ and "Willful Misconduct"²¹⁰, under the English version, refer to the same provisions under Colombian law.

222. "Willful Misconduct" is further described in the English version of the Offshore Contract as "an intentional act or omission that the relevant Person knew or should have known was wrongful”²¹¹. The equivalent term in Spanish is defined as “Mala Conducta Intencional" – a literal translation of "willful misconduct". The term is followed by "(Dolo)" in parentheses, which means that the Offshore Agreement equates willful misconduct and dolo²¹².

223. The terms "Culpa Grave” and “Gross Negligence" are not defined in the Offshore Contract.

224. The above suggests that the Parties understood (i) culpa grave and gross negligence and (ii) dolo and willful misconduct to have equivalent meaning in the context of the performance of the Contract; (iii) the same is applicable to fraude and fraud.

225. The Tribunal further confirms that, as will be explained in section VIII.1 infra, culpa grave under Colombian law and gross negligence under New York law (the only relevant concepts to the discussion on contractual liability), are very similar concepts, so that any contractual performance which qualifies as the former under Colombian law would also meet the requirements for the latter under New York law.

226. The Tribunal will address these similarities, whenever necessary, in the respective sections on liability, where a detailed analysis and comparison of these legal concepts will be presented²¹³.

C. Fiduciary liability claim

227. The final, alternative claim brought by Reficar in case the Tribunal dismisses the contract claims, is for an alleged breach of CB&I's fiduciary duties towards Reficar

²⁰⁷ JX-002, p. 31. ↩
²⁰⁸ JX-002, p. 32. ↩
²⁰⁹ JX-002, p. 166. ↩
²¹⁰ JX-002, p. 171. ↩
²¹¹ JX-004, p. 157. ↩
²¹² JX-004, p. 34. ↩
²¹³ Even though these concepts are discussed in the context of contractual liability here, the Tribunal notes that the concept of dolo will also be key for assessing pre-contract liability. Thus, the respective analyses may be found as follows: for pre-contractual dolo, see Section VII.1.3.2; for culpa grave/gross negligence, see Section VIII.1. ↩

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under New York law. There is no discussion between the Parties as to the law under which this claim has been pleaded.

228. In any event, the Tribunal will eventually find CB&I liable for contract breaches; thus, the fiduciary claim must be considered moot to avoid Reficar obtaining double recovery.

3. THE TRIBUNAL'S POWER TO GRANT INDIRECT OR CONSEQUENTIAL DAMAGES

229. Reficar's primary claims under the EPC Contract are twofold:

• That CB&I breached the Contracts by charging unreasonable and improper costs for the Refinery, which Reficar never should have paid and which it believes to be entitled to claw back.
• That CB&I was late in the delivery of the Refinery, entitling Reficar to claim delay penalties and lost profits.

230. Reficar also brings an ancillary claim: the cost of capital.

231. There is no question that under the applicable law, these claims seem, prima facie, available to Reficar as the aggrieved party. The question is whether the Parties agreed to make them unavailable in this arbitration before this Tribunal.

232. CB&I says that Section 4.13 of the DRA carves out loss of profits and cost of capital from the Tribunal's competence²¹⁴:

"The Arbitral Tribunal shall neither have nor exercise any power to act as amicable compositeur or ex aequo et bono, or to award special, indirect, consequential or punitive damages". [Emphasis added]

233. CB&I interprets "indirect or consequential damages" as encompassing claims for lost profits and cost of capital²¹⁵. Reficar argues that both its loss of profit and its cost of capital claims are direct and fall outside of the scope of this provision²¹⁶.

234. Since the discussion revolves around the correct construction of certain terms included in the DRA, the Tribunal must resort to New York law, as the applicable law under that agreement²¹⁷:

"(...) shall be governed by and construed in accordance with the laws of the State of New York (...), whose state and federal courts shall have sole and exclusive jurisdiction over the enforcement or challenge to the enforcement of this Dispute Resolution Agreement" [Emphasis added].

235. The Tribunal also notes that New York is the seat of the arbitration, as per Section 4.9 of the DRA, and that questions regarding the Tribunal's scope of authority and

²¹⁴ JX-007, p. 11. ↩
²¹⁵ RPHB, paras. 156-161. ↩
²¹⁶ ESOC, para. 782, CPHB, paras. 444, 503, 507. ↩
²¹⁷ JX-007, Section 14. ↩

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limitations thereto introduced by the Parties' agreement, should be adjudicated in accordance with the seat of arbitration; as indicated by Gary Born,

"[...] issues concerning the arbitral tribunal's power and jurisdiction with respect to remedial authority are governed by the law of the arbitral seat [...]"²¹⁸.

236. The Tribunal will address this issue in Section VII.3 infra.

²¹⁸ Born, G., International Commercial Arbitration, 2021, Kluwer Law International, section 23.04(D). ↩

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V. FACTS

237. The facts underlying the present dispute are considerably complex. In this section the Tribunal offers an overview of the factual developments, to permit the reader an understanding of the subsequent discussion of the matters to be adjudicated.

238. A detailed analysis of the factual background pertinent to each of the claims and counterclaims presented by the Parties will be provided by the Tribunal in the relevant sections of the Award.

1. DRAMATIS PERSONAE

Claimant

239. Claimant is Refinería de Cartagena S.A., a mixed-capital company (sociedad de economía mixta) organized under Colombian law as a corporation (sociedad anónima simplificada) with its principal place of business in Cartagena, Colombia. It is also the owner of the Cartagena Refinery in Cartagena, Colombia and engages in the refinery of crude oil and the production of petrochemical products.

240. Reficar is a 100% wholly-owned subsidiary of Ecopetrol S.A., which is also a mixed-capital company (sociedad de economía mixta), organized under Colombian law (sociedad anónima). Ecopetrol is an oil and gas company, which is approximately 90% owned by the Republic of Colombia, and engages in exploration and production, transportation and logistics, refining, petrochemicals and biofuels. Ecopetrol is listed on the New York and Toronto Stock Exchanges.²¹⁹

Respondent 1

241. Respondent 1 is CB&I N.V., a limited liability company (naamloze venootschap) organized under the laws of The Netherlands and its main place of business in Houston, Texas. CB&I N.V.'s stock trades on the New York Stock Exchange under the ticker symbol "CBI". CB&I N.V. provides conceptual design, technology, engineering, procurement, fabrication, construction and commissioning services to customers in the energy, petrochemical and natural resources industries.

Respondent 2

242. Respondent 2 is CB&I UK Ltd., a limited liability company existing under the laws of the United Kingdom and a 100% wholly-owned subsidiary of CB&I N.V. CB&I UK provides design, design-build, engineering, fabrication, procurement, construction and maintenance services for oil and gas, power, and allied industry projects in, among other places, South America.

Respondent 3

243. Respondent 3 is CBI Colombiana S.A. is a limited liability company organized and existing under the laws of Colombia (sociedad anónima) and is a 100% wholly-owned subsidiary of CB&I N.V. CBI Colombiana provides, among other things,

²¹⁹ RfA, para. 7. ↩

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general contracting services such as constructing large projects. On September 15, 2020 counsel to CB&I UK and CB&I N.V. informed the Tribunal of a liquidation order concerning CBI Colombiana²²⁰. The last update on the status of CBI Colombiana was received by the Tribunal on November 11, 2020 in a letter from the Liquidator²²¹.

2. PRE-CONTRACTUAL STAGE

244. The Cartagena Refinery Modernization and Expansion Project [the "Project" or the "Refinery Project"] is one of the largest construction endeavours in the energy sector in the recent history of Colombia.

245. Conceived as early as the beginning of the 2000s by the Refinery owner, the state-owned company Ecopetrol, the Project went through years of initial planning, followed by securing the co-operation of Glencore²²² and the creation of a special purpose vehicle, Reficar²²³, the claimant in this arbitration²²⁴.

246. Due to the sheer size of the undertaking, the bulk of the Project was divided into two stages, each with a separate contract:

• The initial agreement for process design and basic engineering [the "Project Definition Contract"], and
• The main agreement for the engineering, procurement and construction of the Project, which would eventually be the EPC Agreement.

247. One of the key aspects in deciding to whom to award the contracts was the willingness and ability of the contractor to undertake works under a lump sum turnkey ["LSTK"], rather than cost-reimbursable [“RC”, also “cost plus"] basis²²⁵:

• In an LSTK contract the contractor tenders a price for the completion of the scope of works - hence, the risk of cost overruns and delays lies with the contractor and not with the owner;
• In a cost-reimbursable contract, the contractor bills the owner the costs incurred in the completion of the scope of works plus a margin - thus, the price and time risks rests with the owner and not with the contractor.

248. Three international construction companies participated in the bidding procedure for the Project Definition Contract²²⁶; CB&I won, with its proposal being scored highest by Reficar's external consultant²²⁷.

²²⁰ See communications A 107 and R-124-R-126. ↩
²²¹ Letter from the Liquidator dated November 11, 2020. ↩
²²² Ex. R-0468; Houtz CWS, para. 15. ↩
²²³ The Tribunal notes that in some of its written submissions, Claimant uses the name Refinería de Cartagena S.A.S. instead of Refinería de Cartagena S.A. ↩
²²⁴ Ex. C-0024, p. 5; Ex. R-0473, p. 17; Houtz CWS, para. 16. ↩
²²⁵ See e.g., the Parties' respective arguments at CPHB, para. 62; RPHB, para. 84. ↩
²²⁶ Ex. C-0054, p. 8. ↩
²²⁷ Ex. C-0054, p. 12. ↩

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249. The Project would start under a cost-reimbursable basis in the Project Definition Contract, signed in November 2007²²⁸; this phase was later to be followed by a definitive EPC Agreement on an LSTK basis²²⁹.

250. This initial assumption changed, however, with the evolution of market conditions.

251. In spring of 2008, CB&I's director of business development informally told Reficar's Mr. Houtz about CB&I's preference to move with the EPC Agreement on a cost plus basis.

252. Reficar undertook independent scrutiny of the risks and benefits of the two contracting models and instructed an external consultant to prepare a detailed comparison study, whose results stated that "a satisfactory LSTK arrangement may not be achievable"²³⁰ and recommending the contract to be signed on a cost plus basis²³¹.

253. On the basis of the study, Reficar's Board of Directors ["BofD"] asked Reficar's management to formally approach CB&I about the possibility to switch the modality of the future EPC Agreement from LSTK to RC²³².

254. Reficar's BofD, however, kept pondering which contracting modality to use for the EPC Contract until November 2009, when the Letter of Intent ["LOI"], greenlighting the commencement of EPC activities by CB&I, was signed in anticipation of the EPC Agreement, explicitly on a cost-reimbursable basis²³³.

255. Reficar now claims, in essence, that it was tricked by CBI into shifting to a pricing modality which placed the risk of cost overruns on Reficar²³⁴.

256. Apart from the contracting modality, Reficar also requested that CB&I prepare two types of deliverables²³⁵:

• cost estimates, and
• a planned work schedule.

257. In January 2009 CB&I issued the Execution Masterplan, which required CB&I to prepare a cost estimate within a +/10% accuracy margin and a Level 3 work schedule²³⁶.

258. The two cost estimates that played a key role in the pre-contract stage were the July 2009 Estimate and the February 2010 Estimate.

²²⁸ Ex. R-0010 (Ex. C-0006). Apart from CB&I, Technip was also involved in the 2007 Project Definition Contract, even though it acceded through a separate agreement. ↩
²²⁹ Ex. R-0010, Schedule One, para. 1, p. 56. ↩
²³⁰ Ex. R-0487, p. 6. ↩
²³¹ Ex. R-0487, pp. 7-8. ↩
²³² Ex. C-0014, pp. 5-6. ↩
²³³ RFA Ex. 30. ↩
²³⁴ CPHB, paras. 62-72. ↩
²³⁵ See analysis of these deliverables in Section VII.1.3.1 infra. ↩
²³⁶ Ex. C-0024. ↩

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259. The July 2009 Estimate stated that it adhered to AACE Class II +/-10% accuracy²³⁷ (the AACE is a leading association of cost engineers) and was presented to Reficar on August 3, 2009²³⁸, at the amount of USD 3.495 billion²³⁹.

260. The July 2009 Estimate was affected by further negotiations between the Parties and certain scope changes instructed by Reficar; thus, on February 28, 2010, CB&I produced its Revision 2 – Final Estimate Scope to the July 2009 Estimate²⁴⁰ [known as the "February 2010 Estimate"]²⁴¹.

261. As regards the work schedule, CB&I submitted a preliminary Level 3 Schedule on March 25, 2010²⁴², which Reficar rebutted as incomplete²⁴³. CB&I later delivered a modified version, called the April 2010 Schedule²⁴⁴, which was not attached to the EPC Contract. Instead, the Parties agreed for CB&I to deliver the final Level 3 Schedule within 90 days after the execution of the EPC Contract; CB&I submitted such schedule as the October 2010 Re-Baseline Schedule²⁴⁵.

3. EPC CONTRACT

262. On November 10, 2009, Reficar and CB&I entered into the LOI²⁴⁶, which contained the key commercial terms and interim provisions while the Parties negotiated in good faith towards the final RC based EPC Contract²⁴⁷.

263. Finally, on June 15, 2010, Reficar and the CB&I entities entered into six agreements collectively known as the final EPC Agreement, which comprises the following documents:

• The Onshore Contract between Reficar and CB&I Colombiana for work (mainly construction) performed by CBI Colombiana²⁴⁸,
• The Offshore Contract between Reficar and CB&I UK for design, engineering, procurement and other work performed by CB&I UK primarily outside of Colombia²⁴⁹,
• The Coordination Agreement executed by Reficar, CB&I UK and CB&I Colombiana²⁵⁰,

²³⁷ Exs. R-0033, p. 1; C-0748; C-0400, p. 2. ↩
²³⁸ Ex. R-0524. ↩
²³⁹ Ex. R-0524, p. 231. ↩
²⁴⁰ Ex. C-0041 (Ex. R-0546), p. 2. ↩
²⁴¹ As a threshold matter, on the basis that the document is named "31 July 2009 Class [2] (+/-10%) Revision 2- Final Estimate Scope February 28, 2010", the Tribunal shall refer to the document as the February 2010 Estimate taking into account that multiple documents in the record have revisions, and they are always referred to by the Parties under their original iteration's name. ↩
²⁴² Ex. C-1741. ↩
²⁴³ Ex. C-0050. ↩
²⁴⁴ Ex. C-0051, p. 1. ↩
²⁴⁵ Ex. C-0058, pp. 15-21, 73. ↩
²⁴⁶ RFA Ex. 30. ↩
²⁴⁷ Ex. R-0047 (Ex. C-0037). ↩
²⁴⁸ JX-002; JX-003; JX-006. ↩
²⁴⁹ JX-004; JX-005; JX-006. ↩
²⁵⁰ JX-007, pdf pp. 29-44. ↩

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• The Dispute Resolution Agreement between Reficar and CB&I UK, CBI Colombiana, CB&I, N.V.²⁵¹,
• The Onshore Parent Guarantee²⁵²,
• The Offshore Parent Guarantee²⁵³.

264. The EPC Agreement is a set of voluminous documents; the key provisions for the purposes of the current dispute are twofold:

265. First, CB&I assumed certain Cost Control Commitments: it promised

• to rigorously control cost and schedule similar to a lump sum contract, and
• to safeguard Reficar's resources as if their own²⁵⁴.

266. In addition, CB&I assumed the Reasonable Cost Obligation: to only incur costs which meet the criteria of being:²⁵⁵

• reasonable,
• properly incurred, and
• in accordance with the Contract.

267. Second, with regard to Schedule, CB&I undertook a twofold obligation ["Schedule Control Commitments"] to

• advance the Works to the point where the Project would be ready for pre-commissioning and start-up ["PCS"] by the date guaranteed in the Contract, and
• proceed with the Works regularly and diligently.

268. Third, CB&I's total aggregate liability to Reficar under or in connection with the EPC Contract would be limited to a total of USD 85.75 million, with explicit exceptions for liability arising from fraude, culpa grave or dolo under the Onshore Agreement and fraud, gross negligence or willful misconduct under the Offshore Agreement²⁵⁶.

4. CONTRACTUAL STAGE

269. After the signing of the EPC Agreement, CB&I continued to proceed with the Works without any signs of delays or excess costs during the latter half of 2010.

²⁵¹ JX-007, pdf pp. 3-27. ↩
²⁵² JX-008, pdf pp. 1-16. ↩
²⁵³ JX-008, pdf pp. 17-32. ↩
²⁵⁴ Project Execution Plan, Exhibit 13 to the Onshore and Offshore EPC Contract, para. 3; JX-002, p. 654; JX-004, p. 628. ↩
²⁵⁵ Section IV, Appendix I to the EPC Contract, JX-003, p. 3; JX-005, p. 3. ↩
²⁵⁶ See TC 8.1.1 at JX-002, pp. 180-181; JX-004, p. 166. ↩

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270. To control costs in real time, CB&I was contractually bound to provide to Reficar monthly cost forecasts ["Monthly Forecasts"], an estimate of the total EPC costs that Reficar would incur until the finalization of the Project, and of the necessary schedule²⁵⁷.

Representation Letter on costs and schedule by CB&I

271. Starting in 2011, the cost and schedule management of the Project began to display deficiencies:

• in February 2011 CB&I's Monthly Forecast suddenly indicated a delay in the Mechanical Completion Date from February to October 2013²⁵⁸;
• three months later, the May 2011 Monthly Forecast recorded delays in all activities (apart from engineering)²⁵⁹;
• the August 2011 Monthly Forecast showed a bleaker perspective: CB&I was now forecasting that the EPC costs would increase by USD 400 million to USD 3,641 million²⁶⁰; and
• The Monthly Forecast for November 2011 estimated EPC costs at USD 3.639 billion²⁶¹; the number increased in December 2011 to USD 3.809 billion²⁶² and was revised in January 2012²⁶³ to USD 3,971 million²⁶⁴.

272. Note that in one year the Monthly Forecasts had increased more than USD 700 million (from USD 3.2 billion to almost USD 4 billion – a 22% increase).

273. As a result of these discrepancies, the Parties unsuccessfully tried to renegotiate the EPC Agreement²⁶⁵.

274. As Reficar's frustration with the exploding cost forecast grew, it eventually informed CB&I that it would "take action outside the contract" if CB&I failed to prove it could bring the Project costs under control²⁶⁶.

275. To appease Reficar, on May 22, 2012 CB&I issued a letter to Reficar, signed by its Project Director, Mr. Deidehban²⁶⁷, in which CB&I reiterated the accuracy of the USD 3,971 million cost Forecast issued in December 2011 [the "Representation Letter"].

²⁵⁷ See Project Controls Execution Plan, Annex 6 to Onshore and Offshore Agreements, para. 7.1; JX-002, p. 478; JX-004, p. 453. ↩
²⁵⁸ Ex. C-1864, p. 4. ↩
²⁵⁹ Ex. C-0067, p. 7. ↩
²⁶⁰ Ex. C-0069, p. 4. ↩
²⁶¹ Ex. R-1851 057 00015, fourth tab, in yellow, "Project Summary". ↩
²⁶² Ex. C-0222, p. 4; Ex. R-1851 057 00016, fourth tab, in yellow, "Project Summary". ↩
²⁶³ Ex. C-0088, p. 4. ↩
²⁶⁴ Ex. R-1851_057_00017, fourth tab, in yellow, "Project Summary". ↩
²⁶⁵ Ex. R-1480, p. 8; Ex. R-1476, p. 5. ↩
²⁶⁶ Ex. C-0089, p. 3: "It is critical to demonstrate control with the evolution of the project as, without this, there will be a need to take action outside the contract". ↩
²⁶⁷ Ex. R-1849 07396. ↩

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276. But Mr. Deidehban did not only repeat the validity of the Forecast; he also went one significant step further. Until then, CB&I had represented that its estimates were at best Class II +/-10%. Now, for the first time, CB&I formally represented to Reficar that this USD 3,971 million Forecast met the highest accuracy requirements of the industry: it complied with the requirements of a Class I +/-5% estimate²⁶⁸.

Ultimate costs on the Project

277. Notwithstanding the Representation Letter, the Monthly Forecasts did not stop growing. By September 2012, the Monthly Forecast reached USD 4,221 million²⁶⁹ and by October USD 5,467 million²⁷⁰, an increase of USD 1,246 million (or 23%) in just one month. This prompted further alignment meetings, which led to CB&I slightly reducing the forecast to USD 5,371 million in December 2012²⁷¹.

278. By mid-2013 CB&I appeared to have stabilized the forecasted costs and schedule. But then, between July and September 2013, the Project suffered serious labour disruptions, which included work stoppages and a strike. In August there was an explosion in the FCC Unit²⁷², which also impacted on schedule.

279. Using the labour disruptions as its main excuse, CB&I once again increased its Monthly Forecast in February 2014, this time to USD 6.27 billion²⁷³, a number which remained relatively stable until the end of the Project, with the final EPC cost projection from December 2015 being slightly reduced to USD 6,214 million²⁷⁴.

280. Reficar ultimately paid to CB&I USD 5,908.2 million in EPC costs²⁷⁵. Additionally, in the present arbitration CB&I has filed a counterclaim for unpaid Project costs of USD 267.26 million²⁷⁶. If both amounts are added, the total Project costs paid by CB&I plus the amounts still under dispute reach up to USD 6,175 million. Reficar claims in this arbitration that nearly USD 2 billion were incurred by CB&I in breach of the Contract's Cost Control Commitments.

281. Pro memoria, in the May 2012 Representation Letter, delivered when construction had already been progressing for almost two years, CB&I submitted to Reficar a forecast of USD 3,971 million, representing that this figure met the Class I +/-5% requirements.

²⁶⁸ Ex. R-1849_07396, pp. 2-3. ↩
²⁶⁹ Ex. C-0093, pp. 4, 39. ↩
²⁷⁰ Ex. C-0096, p. 13; the Tribunal notes that the same document offers different ranges for the reforecast at p. 17. ↩
²⁷¹ Ex. C-0257, p. 4. ↩
²⁷² Ex. C-0113. ↩
²⁷³ Ex. C-0110, p. 5. ↩
²⁷⁴ Ex. C-0056, tab "Project Summ Cost Report Only", Cell R62 ("TOTAL"); see also LI ER, para. 1180 and Table 9.4-17 therein; see also Attachment 9-02 to LI ER. ↩
²⁷⁵ CPHB, para. 1, citing to Long International ER, para. 1180 and Table 9.4-17. ↩
²⁷⁶ CPHB, para. 1, fn. 10. The Tribunal notes that CB&I does not quantify its counterclaim as a total number in USD but instead uses separate numbers for invoices due under the Onshore Contract, in Colombian pesos, and for those under the Offshore Contract, in USD. ↩

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Ultimate completion of Works

282. The EPC Contract stipulated that CB&I would complete the works by the guaranteed date of February 2013; it contains provisions for possible extensions of this deadline, but there is no agreement between the Parties as to their application in the current case.

283. Apart from the discussion on the extension of this deadline, the Parties also dispute when the Works were actually completed by CB&I; CB&I says this happened in February 2015²⁷⁷ and Reficar says that it occurred when CB&I demobilised from the Project site in the fall of 2015²⁷⁸. The Parties likewise bring a number of arguments as to the reasons of the delay. Regardless of these arguments, however, it is clear that the Works were completed no earlier than two years after the date guaranteed by CB&I in the Contract.

284. It is finally undisputed that Reficar paid its other contractors for performing at least some of the completion and minor corrective Works that were initially in the scope of work of CB&I. The Parties dispute whether CB&I should reimburse Reficar for these costs as well.

285. There is no dispute between the Parties that Reficar now operates a state-of-the-art refinery.

***

286. On the basis of the above facts, Reficar, in essence, brings pre-contractual claims.

²⁷⁷ RPHB, paras. 172, 176. ↩
²⁷⁸ CPHB, paras. 134-135, citing to LI ER, para. 37. ↩

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VI. RELIEF SOUGHT

287. In the following sections, the Arbitral Tribunal reproduces the Parties' requests for relief as described in the Terms of Reference (1.), main submissions (2.) and Post-Hearing Briefs (3.). Finally, the Tribunal will transform the Parties' requests for relief into blended requests for relief (4.).

1. TERMS OF REFERENCE

288. In the Terms of Reference, Reficar requested the Tribunal an award containing the following declarations or remedies²⁷⁹:

"a. A declaration that Reficar is entitled to reimbursement or restitution of all costs paid by Reficar which were unreasonably and improperly incurred by Respondents in connection with the work on the Project, and that Reficar is not obligated to pay to Respondents any additional such costs which it has not already paid.

b. A declaration that Respondents breached their fiduciary duties as well as the good-faith and other deberes secundarios de conducta to Reficar in connection with their work on the Project.

c. A declaration that Respondents committed fraud and/or dolo both in inducing Reficar to enter into the EPC Contract and in connection with their work on the Project.

d. A declaration that Respondents breached the EPC Contract by virtue of their fraud, dolo, gross negligence and/or willful misconduct.

e. A declaration that Respondents were negligent, grossly negligent, fraudulent, and/or acted dolosamente in preparing the estimates concerning the EPC Contract and in connection with their Work on the Project, both before and after execution of the EPC Contract, fully knowing or that they should have known that those estimates were inaccurate.

f. A declaration that Respondents were negligent, grossly negligent, fraudulent, and/or acted dolosamente in preparing the EPC Contract schedules and in connection with their work on the Project, both before and after execution of the EPC Contract, fully knowing or that they should have known that those schedules were inaccurate, including the baseline schedule provided to Reficar before execution of the EPC Contract.

g. A declaration that Respondents engaged in willful misconduct and/or dolo in preparing the estimates concerning the EPC Contract and in connection with their work on the Project.

²⁷⁹ TofR, para. 37. ↩

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h. A declaration that Respondents engaged in willful misconduct and/or dolo in preparing the schedules concerning the EPC Contract and in connection with their work on the Project.

i. A declaration that Respondents were negligent, grossly negligent, fraudulent, and/or acted dolosamente in their failure to manage the labor force and that Respondents are responsible for costs arising out of the labor disruptions.

j. A declaration that, due to Respondents' conduct, Respondents cannot avail themselves of any limitation-of-liability provisions in any contract (including TC 8 of the EPC Contract) to limit Reficar's damages because they are unenforceable, abusive, inapplicable, and/or null and void.

k. A declaration that Respondents are fully responsible for any judgment or decision by Colombian courts or any other governmental entity against Reficar or its employees due to CBI's negligence, dolo, gross negligence, and/or willful misconduct with respect to Colombian public funds.

l. A declaration that Respondents shall indemnify Reficar for any payment or cost that any governmental entity may order under Colombian law due to CBI's negligence, dolo, gross negligence, and/or willful misconduct with respect to Colombian public funds.

m. A declaration that Respondents are fully responsible under their respective Project Agreements to Reficar – including, but not limited to, [CB&I N.V.]'s²⁸⁰ obligations under the Performance Guarantees.

n. A declaration that Respondents are required to turn over and provide to Reficar all necessary documents for the completion and safe operation of the Refinery, including without limitation documents necessary to achieve contractual Mechanical Completion, QA/QC records, and subcontract records.

o. A declaration that the Letter of Credit issued pursuant to TC 75.3 of the EPC Agreement secures prior payments made by Reficar pursuant to the parties' Memorandum of Agreement and Project Invoicing Procedure and may be used to recover any such payments that are not justified and properly substantiated by CBI (by further declaration of the Tribunal).

p. An award of all actual damages, including additional Owner's costs and lost profits, of an amount of not less than USD 2 billion, based on the facts and legal grounds expressed herein and in any subsequent submissions. Reficar reserves the right to quantify at a later date the damages it has suffered, including lost profits.

q. An award of equitable relief based on the facts and legal grounds expressed herein and in any subsequent filings, including disgorgement of all revenues, fees, and profits.

²⁸⁰ The TofR appears to contain a typographical mistake as it refers to "CBI NL". The Tribunal understands reference to be made to "CB&I N.V.". ↩

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r. An award of pre- and post-award interest at the applicable rates under applicable law until the effective payment of the award".

289. On the other hand, CB&I requested the Tribunal an award containing the following declarations or remedies²⁸¹;

"a. A declaration that the Claimant's claims are dismissed in their entirety.

b. A declaration that the Claimant breached the applicable agreements.

c. A declaration that the Claimant abused its rights, acted in bad faith, and failed to comply with its duties under the Project Agreements and at law.

d. A declaration that the Claimant is liable for interference in the Respondents' contractual relationships with its subcontractors, laborers, employees, and banks, in breach of its duty of good faith to the Respondents, as well as at law.

e. A declaration that the Claimant has been unjustly enriched.

f. A declaration that the Respondents have no liability to the Claimant under any Performance Guarantee.

g. A declaration that the Advance Payment LC no longer secures money the Claimant paid to the Respondents in advance of the Respondents performing the obligations under the relevant agreements to which such money relates and the Claimant has no right to make a demand or draw upon the Advance Payment LC.

h. A declaration that Respondents satisfied Contractor's obligations and liabilities under the applicable agreements and the Claimant is liable to the Respondents for fraudulently drawing on the Performance LC.

i. A declaration that the Respondents are entitled to reimbursement for costs and expenses incurred in responding to the Colombian government investigations of the Claimant.

j. A declaration that the Claimant is obligated to pay all costs, expenses, fines or penalties that the Respondents incur in responding to Colombian government investigations of Ecopetrol, the Claimant, or their employees, agents, officers, shareholders, directors, or representatives.

k. A declaration that the Claimant is not entitled to recover sums paid under the Project Invoicing Procedures or the Memoranda of Understanding.

l. A declaration that the Respondents are entitled to the award of all actual damages, other sums, and/or set-offs based on the allegations in their Counterclaim.

²⁸¹ TofR, para. 106. ↩

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m. A declaration that the Respondents are entitled to be awarded their legal fees, expert fees, and costs of the Arbitration per the ICC Rules, the Project Agreements, and applicable law.

n. A declaration that the Tribunal's decision on any claim for an item of costs or any class of cost items that has been made or could have been made in this arbitration is final and binding for all purposes.

o. In the alternative, a declaration that the Project Agreements' economic balance has been unfairly affected to the Respondents' detriment and must be established by enforcing the Project Agreement or Project Agreements, as the case may be.

p. A declaration that the Respondents are entitled to be awarded pre- and post-judgment interest and all other interest payable under applicable law and/or the DRA".

2. MAIN SUBMISSIONS

290. In this section, the Arbitral Tribunal will reproduce the Parties' requests for relief for the Claim (A.) and the Counterclaim (B.).

A. Claim

a. Claimant's Request for Relief

291. In the Reply, Claimant requested the Arbitral Tribunal to issue an award containing the following declarations, relief or remedies²⁸²:

1. A declaration that the burden of proof on Reficar's affirmative claims is shifted in whole or in part to CB&I for the reasons set forth in Section VI(C)(1), supra.
2. A declaration that Reficar is entitled to reimbursement or restitution of all costs paid by Reficar which were unreasonably and improperly incurred by Respondents in connection with the Work on the Project, and that Reficar is not obligated to pay to Respondents any additional such costs which it has not already paid.
3. A declaration that Respondents committed dolo incidental and/or violated the duty to inform during negotiations over the EPC Agreement and/or otherwise failed to negotiate the EPC Agreement in good faith.
4. A declaration that Respondents violated the duty to inform under Colombian law with respect to the character and accuracy of Respondent's pre-contract estimates.

²⁸² Reply, para. 1021. The Tribunal notes that Reficar also filed an Updated Statement of Claim Amounts on March 12, 2021, but that this update only affected the numbers and not the character of the requests for relief. ↩

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5. A declaration that Respondents violated the duty to inform under Colombian law with respect to the character and accuracy of Respondent's pre-contract schedules.
6. A declaration that Respondents' violation of the duty to inform resulted in Reficar accepting contract terms in the EPC Agreement without full knowledge, which Reficar would not have accepted but for Respondents' failure to inform, and thus such terms shall not be applied to or enforced against Reficar, including but not limited to TC 8.1, TC 8.2.1, and TC 54.8.
7. A declaration that Respondents breached their good faith and fiduciary obligations to Reficar in connection with their Work on the Project.
8. A declaration that Respondents committed fraud, dolo, and/or willful misconduct in connection with their Work on the Project.
9. A declaration that Respondents committed gross negligence or culpa grave in connection with their Work on the Project.
10. A declaration that Respondents breached the EPC Agreement by virtue of their fraud, dolo, culpa grave, Gross Negligence and/or Willful Misconduct.
11. A declaration that Respondents were negligent, grossly negligent, fraudulent, and/or acted with dolo and/or culpa grave in preparing the estimates concerning the EPC Agreement and in connection with their Work on the Project, both before and after execution of the EPC Agreement, fully knowing or that they should have known that those estimates were inaccurate and unreliable.
12. A declaration that Respondents were negligent, grossly negligent, fraudulent, and/or acted with dolo and/or culpa grave in preparing the EPC Agreement schedules and in connection with their Work on the Project, both before and after execution of the EPC Agreement, fully knowing or that they should have known that those schedules were inaccurate or unreliable, including the baseline schedule provided to Reficar before execution of the EPC Agreement.
13. A declaration that Respondents engaged in gross negligence, culpa grave, dolo, fraud, and/or willful misconduct in preparing the estimates concerning the EPC Agreement and in connection with their Work on the Project.
14. A declaration that Respondents engaged in gross negligence, culpa grave, dolo, fraud, and/or willful misconduct in preparing the schedules concerning the EPC Agreement and in connection with their Work on the Project.
15. A declaration that Respondents not only committed willful misconduct, dolo, gross negligence, and/or culpa grave through violations of the EPC Agreement, but that the aggregate, extended duration of the harm Respondents caused also constituted willful misconduct, dolo, gross negligence, and/or culpa grave.

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16. A declaration that, due to Respondents' conduct, Respondents cannot avail themselves of any limitation-of-liability provisions in any contract (including TC 8, TC 54, and TC 56 of the EPC Agreement) to limit Reficar's damages because they are unenforceable, inapplicable, and/or null and void.
17. A declaration that Respondents are not entitled to payment from Reficar for invoices that did not comply with the requirements of the EPC Agreement.
18. A declaration that Respondents must reimburse Reficar for payments that Reficar made under invoices that did not comply with the requirements of the EPC Agreement.
19. A declaration that Respondents must fully indemnify Reficar for any judgment or decision by Colombian courts or any other governmental entity against the Owner Group that was caused by CB&I's violation of any applicable laws, including violations that constitute fraud, negligence, dolo, gross negligence, culpa grave, and/or willful misconduct.
20. A declaration that Respondents shall indemnify Reficar for any payment or cost that any governmental entity may order against the Owner Group under Colombian law due to CB&I's violation of any applicable laws, including violations that constitute fraud, negligence, dolo, gross negligence, culpa grave, and/or willful misconduct with respect to Colombian public funds.
21. A declaration that Respondents are fully responsible under any Project Agreement—including, but not limited to, CB&I N.V.'s obligations under the Contractor Performance Guarantees.
22. An award of all actual damages, including additional Owner's costs, lost profits, and cost of capital, based on the facts and legal grounds expressed herein and in any previous or subsequent submissions.
23. An award of daño emergente for Improper EPC Costs of US$ 2,317.87 million resulting from Respondents' negotiation-phase misconduct, which is comprised of (i) US$ 364.53 million arising from CB&I's understatement of costs in its allegedly Class 2 +/- 10% estimate and (ii) US$ 1,953.34 million in configuration-of-the-contract damages.
24. In the alternative to Request 23, an award of damages/daño emergente for Improper EPC Costs of US$ 2,001.58 million resulting from (i) Respondents' breach of the EPC Agreement through gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo; (ii) Respondents' breach of their fiduciary duties; and/or (iii) Respondents breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap due to Respondents' breach of the duty to inform during negotiations or for any other reason set forth herein.

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25. In the alternative to Requests 23 and 24, an award of US$ 1,807.89 million for reimbursement of costs paid under the EPC Agreement that were not reasonably or properly incurred in accordance with the terms of the EPC Agreement.
26. An award of US$ 165.35 million for increased Owner's costs as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.
27. An award of US$ 173.80 million for increased PCS costs as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.
28. An award of US$ 569.11 million for cost of capital related to improper EPC costs, Owner's costs, and PCS costs as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.
29. In the alternative to Request 28, an award of US$ 457.91 million for cost of capital related to unreasonable and improper costs and/or unsubstantiated payments requested in Requests 25 and 33.
30. An award of Reficar's lucro cesante/lost profits of US$ 862.59 million for lost product sales as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.
31. An award of Reficar's lucro cesante/lost profits of US$ 397.05 million for cost of capital on lost profits as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.
32. An award of Reficar's lucro cesante/lost profits of US$ 12.24 million for lost revenues on electricity sales as a result of (i) Respondents' negotiation-phase misconduct; (ii) Respondents' gross negligence, culpa

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grave, willful misconduct, fraud, bad faith, or dolo in violation of the EPC Agreement; (iii) Respondents' breach of the EPC Agreement and the invalidity/inapplicability of the Liability Cap; and/or (iv) Respondents' breach of their fiduciary duties.

33. An award of US$ 137.25 million for payments that were made by Reficar pursuant to the MOA, PIP, or EPC Agreement but never subsequently substantiated by Respondents, or, if the Tribunal awards an amount request pursuant to Requests 23-25, an alternative award of US$ $74.72 million to avoid duplication.
34. An award of US$ 8.74 million resulting from Respondents' misconduct with respect to vendor back-charges.
35. An award of US$ 3.51 million related to Reficar's inability to collect these owed amounts from Aceral due to CB&I's breaches and failures.
36. An award of disgorgement of Respondents' profits and fees of at least US$ 225 million.
37. A declaration that Tribunal will draw an adverse inference in favor of Reficar with respect to documents that CB&I failed to produce or disclose in this arbitration, as more fully discussed in Section VI(C)(2) supra.
38. An award of equitable relief based on the facts and legal grounds expressed herein and in any subsequent filings.
39. An award of costs of the arbitration, including attorneys' fees.
40. An award of pre- and post-award interest, at the applicable rates under applicable law, until the effective date of payment of the award.

292. Reficar also requested the Tribunal to issue a declaration liquidating the EPC Agreement and establishing the appropriate EPC Agreement value²⁸³.

b. Respondents' Request for Relief

293. In its ESOD, Respondents' request for relief with regard to the Claim is as follows²⁸⁴:

[1] a. A declaration that Reficar is not entitled to any monetary damages or declaratory relief, including, but not limited to, the monetary damages and declaratory relief requested in Reficar's Request for Arbitration and Exhaustive Statement of Claim.

[2] b. An award to CB&I of monetary damages and other relief requested in its Answer to Request for Arbitration and Counterclaim, Non-Exhaustive

²⁸³ Reply, para. 1022. ↩
²⁸⁴ ESOD, para. 1612. The Tribunal has numbered the different requests for relief for ease of reference in the following sections. ↩

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Statement of Counterclaim, Exhaustive Statement of Counterclaim, and Reply to the Non-Exhaustive Statement of Defense to Counterclaim.

[3] c. A declaration that Reficar's claims are dismissed in their entirety.

[4] d. A declaration that Reficar breached its duties under the EPC Contract.

[5] e. A declaration that CB&I has no liability to Reficar under any Performance Guarantee.

[6] f. A declaration that Reficar acted in bad faith and breached its duty of good faith by inducing CB&I to continue working on the Project by paying CB&I's invoices with the intent of breaching its contractual obligations and forcing CB&I to return billions of dollars when the work was completed.

[7] g. A declaration that Reficar abused its rights, acted in bad faith, and breached the duty of good faith by interfering with CB&I's desired means and methods, failing to properly plan and implement procurement activities, and making decisions that were not in the best interest of the Project.

[8] h. A declaration that Reficar is contractually liable to CB&I for abusing its rights and/or intentionally breaching its obligation to pay invoices to CB&I that are due and owing.

[9] i. A declaration that Reficar is contractually liable to CB&I for abusing its rights and/or intentionally breaching its obligation to approve valid subcontractor change orders.

[10] j. A declaration that Reficar is liable for tortious interference in CB&I's contractual relationships with its subcontractors, laborers, employees, and banks.

[11] k. A declaration that Reficar has been unjustly enriched.

[12] l. A declaration that the EPC Contract's Limitation of Liability provisions and other caps on liability or damages are enforceable under any applicable laws.

[13] m. A declaration that all waivers of damages in the EPC Contract are enforceable under any applicable laws.

[14] n. A declaration that Reficar finally approved payment of all amounts tendered to CB&I and Reficar waived its rights to claw back those payments under the EPC Contract and applicable law.

[15] o. A declaration that Reficar is not entitled to restitution in any form.

[16] p. A declaration that CB&I does not owe Reficar any defense or indemnity under the EPC Contract or applicable law.

[17] q. A declaration that Reficar owes CB&I such defense and indemnity as is required by the EPC Contract or applicable law.

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[18] r. A declaration that Reficar's potential damages for late completion of the Work are capped by the Delay Liquidated Damages provisions in the EPC Contract.

[19] s. A declaration that Reficar cannot and shall not offset its prior payments to CB&I against sums that are due and owing to CB&I, and CB&I is not obligated to return any sums it received from Reficar for the Work.

[20] t. A declaration that CB&I has no liability under the Advance Payment LC.

[21] u. A declaration that Reficar fraudulently attempted to draw on the Advance Payment LC.

[22] v. A declaration that Reficar has no right to make a demand or draw upon the Advance Payment LC.

[23] w. A declaration that the Adavance Payment LC does not secure payments made by Reficar to CB&I under the MOA or PIP.

[24] x. A declaration that CB&I has no liability under the Performance LC.

[25] y. A declaration that Reficar is liable to CB&I for improperly drawing on the Performance LC.

[26] z. A declaration that the EPC Contract is a valid and binding agreement on the parties, is still in full force and effect, and Reficar must reimburse CB&I for all reasonable and proper costs it incurs until the EPC Contract is liquidated.

[27] aa. A declaration that all costs CB&I incurred in performing Work under the EPC Contract are reasonable and proper.

[28] bb. A declaration that CB&I adequately performed its obligations under the EPC Contract and is not liable for fraud, gross negligence, willful misconduct, dolo, culpa grave, or fraude.

[29] cc. A declaration that CB&I did not improperly or fraudulently induce Reficar to execute the EPC Contract.

[30] dd. A declaration that CB&I did not improperly or fraudulently induce Reficar to agree to fabricate pipe rack modules in the United States.

[31] ee. A declaration that Reficar maliciously withheld payments from CB&I, refused to sign change orders, and induced CB&1 to continue working on the Project, without intending to honor its payment obligations.

[32] ff. A declaration that CB&I is entitled to reimbursement for costs and expenses incurred in responding to the Colombian government investigations of Reficar.

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[33] gg. A declaration that Reficar is obligated to pay all costs, expenses, fines, or penalties that CB&I incurs in responding to the Colombian government investigations of Ecopetrol, Reficar, or their employees and representatives.

[34] hh. A declaration that CB&I is entitled to be awarded its legal fees, expert fees, and costs of this Arbitration.

[35] ii. A declaration that CB&I is entitled to be awarded pre- and post-judgment interest and all other interest payable under applicable law.

[36] jj. A declaration that CB&I is entitled to amounts necessary to compensate it for fluctuations in the exchange rate of the COP caused by Reficar's failure to timely pay amounts due and owing.

[37] kk. In the alternative, a declaration that the EPC Contract's economic balance has been unfairly impacted to CB&I's detriment and must be established by enforcing the EPC Contract.

B. Counterclaim

a. Respondents' Request for Relief

294. Pursuant to para. 4162 of the Respondents' Reply on Counterclaim²⁸⁵, Respondents' requests for relief with regard to the Counterclaim are as follows:

1. CB&I is entitled to monetary damages in the amount of approximately USD 37,886,998 and COP 503,241,225,913, inclusive of interest, for costs incurred in performance of the Work.
2. CB&I is entitled to monetary damages in the amount of USD 70 million, plus interest, as a result of Reficar's wrongful actions in connection with the Performance LC.
3. CB&I is entitled to its legal costs and expenses as a result of Reficar's wrongful actions in connection with Reficar's improper demands on the Performance LC and Advance Payment LC.
4. CB&I is entitled to pre- and post-judgment interest per TC 58.12 of the EPC Contract. In the case of U.S. dollars, interest shall be awarded at a rate of LIBOR plus 2%. In the case of Colombian pesos, interest shall be awarded at a rate of DTF plus 2%. Interest shall be compounded daily.
5. CB&I is entitled to amounts necessary to compensate it for fluctuations in the exchange rate of the COP caused by Reficar's failure to timely pay amounts due and owing.
6. CB&I is entitled to its attorneys' fees for this matter and all arbitration costs allowed by the ICC rules, including the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court, in accordance with the scale in force at the time of the commencement of the arbitration, as well as the fees and expenses of any experts appointed by the Arbitral Tribunal, the

²⁸⁵ Respondents' Reply on Counterclaim, para. 162. ↩

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costs of CB&I's own experts, translation costs and the reasonable legal and other costs incurred by CB&I for the arbitration.

7. CB&I is entitled to the following declaratory relief:
   1. A declaration that Reficar breached its obligations under the EPC Contract;
   2. A declaration that Reficar acted in bad faith and breached its contractual and implied duties of good faith to CB&I;
   3. A declaration that Reficar abused its rights to CB&I's detriment;
   4. A declaration that CB&I does not owe Reficar any further monies;
   5. A declaration that Reficar cannot and shall not offset its prior payments to CB&I against sums that are due and owing to CB&I, and CB&I is not obligated to return any sums it received from Reficar for the Work;
   6. A declaration that the Advance Payment LC does not secure payments made by Reficar to CB&I under the MOA or PIP;
   7. A declaration that CB&I has no liability under the Advance Payment LC;
   8. A declaration that Reficar has no right to make a demand or draw upon the Advance Payment LC;
   9. A declaration that CB&I has satisfied its obligations and liabilities under the applicable agreements and, therefore, has no liability to Reficar under the Performance LC;
   10. A declaration that Reficar wrongfully drew on the Performance LC;
   11. A declaration that Reficar is required to reimburse CB&I for any costs, including labor costs, that CB&I is currently obligated to pay, or may become obligated to pay in the future, under the EPC Contract or Colombian law;
   12. A declaration that Reficar is obligated to pay all costs, expenses, fines, or penalties that the CB&I has incurred, or may incur in the future, in responding to Colombian government investigations; and
   13. A declaration that CB&I is entitled to be awarded pre- and post-judgment interest and all interest payable under applicable law.
8. CB&I is entitled to any other relief that the Arbitral Tribunal deems just and proper.
9. CB&I reserves its right to seek any and all additional relief to which it may be entitled.

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10. CB&I hereby incorporates all claims for relief contained within its Exhaustive Statement of Defense.

b. Claimant's Request for Relief

295. In its ESODCC, Reficar requested the Tribunal to reject CB&I's requests for relief and to issue an award as follows²⁸⁶:

1. CB&I is not entitled to any further payments under the Onshore or Offshore Contracts;
2. CB&I should refund to Reficar US$ 137,253,916 in advance payments Reficar made to CB&I for invoices that did not qualify for reimbursement under the EPC Agreement, including payments made under the MOA and PIP;
3. CB&I is not entitled to any reimbursement, return of monies, damages, legal costs or fees in connection with Reficar's proper draw on the Performance LOC or proper attempt to draw on the Advance Payment LOC;
4. CB&I is not entitled to its attorneys' fees or arbitration costs in connection with its claims and is to pay Reficar's attorneys' fees and arbitration costs to the extent allowed by ICC rules;
5. CB&I's requests for declaratory relief are denied and Reficar is entitled to the following declaratory relief:
   1. A declaration that CB&I breached its obligations under the EPC Agreement, including in particular its obligation to submit invoiced costs that were reasonably and properly incurred by CB&I in accordance with the EPC Agreement, and its obligation to provide information requested to facilitate Reficar's review of invoices;
   2. A declaration that Reficar properly offset invoice amounts that were due and owing by use of disputed invoices that were not due and owing because those invoices had been properly rejected;
   3. A declaration that payments Reficar made under the MOA and PIP qualify as advance payments under TC 75.3.1 and are not subject to the cap on liability in TC 8.1.1.
   4. A declaration that Reficar has the right to make a demand and draw on the Advance Payment LOC in an amount of up to US$ 95 million for the US$ 17,524,902.11 in forecast payments CB&I has retained, plus the total amount of disputed invoices paid under the MOA and PIP that did not comply with the reimbursement requirements of the EPC Agreement and Colombian fiscal responsibility laws;
   5. A declaration that Reficar properly drew on the Performance LOC;
   6. A declaration that Reficar is entitled to pre- and post-judgment interest in connection with any amount Reficar paid to CB&I that did

²⁸⁶ ESODCC, para. 376. ↩

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not comply with the reimbursement requirements of the EPC Agreement and Colombian fiscal responsibility laws;

vii. A declaration that CB&I is obligated to pay all costs, expenses, fines, or penalties that Reficar has incurred or may incur in the future in connection with any investigations or proceedings by the Contraloría, the Colombian government or any other governmental authority wherever located, that arise out of the events at issue in this arbitration.

3. POST-HEARING BRIEFS

296. Pursuant to the CPHB, Reficar asks the following with regard to its Claim²⁸⁷:

1. A declaration that the burden of proof rests with CB&I with respect to the issues set forth in paragraph 1016 of Reficar's Reply due to, among other reasons, the reasons set forth in paragraphs 1003-1015 of Reficar's Reply and paragraphs 136-144 of Claimant's First PHB.
2. A declaration that Tribunal will draw adverse inferences against CB&I as requested and for the reasons set forth at paragraphs 5, 528-538, 572, 577, 581, and 660 of Reficar's SOC and paragraphs 1017-1019 of Reficar's Reply.
3. A declaration that CB&I committed dolo incidental and/or violated the duty of good faith, including the duty to inform, during negotiations over the EPC Agreement (hereinafter, "Pre-contract Misconduct").
4. A declaration that CB&I committed Pre-Contract Misconduct with respect to its recommendation to switch the EPC Contract from a LSTK structure to a cost-reimbursable structure.
5. A declaration that CB&I committed Pre-Contract Misconduct with respect to the character and accuracy of CB&I's pre-contract estimates.
6. A declaration that CB&I committed Pre-Contract Misconduct with respect to the character and accuracy of CB&I's pre-contract schedules.
7. A declaration that CB&I's Pre-Contract Misconduct resulted in Reficar accepting contract terms in the EPC Agreement that it would not otherwise have accepted, and thus such terms shall not be applied to or enforced against Reficar, including but not limited to TC 8.1, TC 8.2.1, TC 54.8, TC 56, and any other limitations of liability in the EPC Contract (hereinafter, "Limitations of Liability").
8. A declaration that CB&I must reimburse Reficar for costs paid by Reficar to CB&I that were not reasonably and properly incurred in accordance with the EPC Agreement, and that such reimbursement is not limited by any Limitations of Liability (hereinafter, "Reimbursement Obligation").

²⁸⁷ CPHB, para. 532. ↩

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9. A declaration that CB&I breached the EPC Agreement during the execution phase through gross negligence, culpa grave, wilful misconduct, fraud, bad faith, and/or dolo (hereinafter, "Contractual Dolo").
10. A declaration that, regardless of the existence of Contractual Dolo, Reficar is entitled to recover all damages arising from CB&I simple breach of the EPC Agreement during the execution phase because the Limitations of Liability are invalid/inapplicable due to CB&I's Pre-Contract Misconduct or for any other reason set forth in Reficar's briefing (hereinafter, "Inapplicability of Limitations of Liability").
11. A declaration that CB&I breached its good faith and fiduciary obligations to Reficar in connection with its Work on the Project (hereinafter, "Fiduciary Breach").
12. A declaration that CB&I not only committed wilful misconduct, dolo, gross negligence, and/or culpa grave through violations of the EPC Agreement, but that the aggregate, extended duration of the harm CB&I caused also constituted wilful misconduct, dolo, gross negligence, and/or culpa grave.
13. A declaration that CB&I is not entitled to payment from Reficar for invoices that did not comply with the requirements of the EPC Agreement.
14. A declaration that CB&I must reimburse Reficar for payments that Reficar made under invoices that did not comply with the requirements of the EPC Agreement.
15. A declaration that Reficar is not obligated to pay to CB&I any additional costs which it has not already paid.
16. A declaration that Reficar properly drew on the Performance Letter of Credit and is not obligated to return any of those funds.
17. A declaration that the Unsubstantiated Advance Payment Amount is in excess of US$ 95 million and that Reficar is entitled to draw on the full amount of the AP Letter of Credit.
18. A declaration that CB&I must fully indemnify Reficar for any judgment or decision by Colombian courts or any other governmental entity against the Owner Group that was caused by CB&I's violation of any applicable laws.
19. A declaration that CB&I is obligated to continue to indemnify and defend Reficar for and from claims pending in Colombian courts presented by workers hired by CB&I during the project.
20. A declaration that CB&I UK and CBI Colombiana are jointly and severally liable for all obligations declared and amounts awarded herein pursuant to the parties' Section 18 and other provisions of the Parties' Coordination Agreement as well as applicable law.

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21. A declaration that CB&I N.V. is jointly and severally liable as a primary obligor for all obligations declared and amounts awarded herein pursuant to the Parent Guarantee Agreements.
22. An award of all actual damages, including additional Owner's costs, lost profits, and cost of capital, based on the facts and legal grounds expressed in any of Claimant's submissions.
23. A specific award of US$ 363,550,178 for understated quantities and deliverables in the Final Full Estimate (Claim Category 1A) based on CB&I's Pre-contract Misconduct.
24. A specific award of US$ 361,026,237 for the understated productivity multiplier in the Final Full Estimate (Claim Category 1B) based on CB&I's Pre-contract Misconduct or, in the alternative, US$ 307,141,724 if the Tribunal decides to credit the final multiplier adjustment in CB&I's favour.
25. A specific award of US$ 102,392,722 for Engineering Productivity Failures (Claim Category 2) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
26. A specific award of US$ 30,737,257 for Steel Fabrication Failures (Claim Category 3) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
27. A specific award of US$ 103,445,504 for Pipe Spool Fabrication Failures (Claim Category 4) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
28. A specific award of US$ 4,400,000 for Substation Failures (Claim Category 5) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
29. A specific award of US$ 3,340,806 for Invensys Automation Failures (Claim Category 6) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
30. A specific award of US$ 48,814,969 for Labor Disruption Failures (Claim Category 7) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
31. A specific award of US$ 81,530,521 for Labor Strike Failures (Claim Category 8) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
32. In the alternative to Request 24 (Claim Category 1B), a specific award of US$ 284,335,307 for Non-Discrete Productivity Loss from CB&I Failures (Claim Category 9) based on (i) CB&I's Contractual Dolo, (ii) the

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Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.

33. A specific award of US$ 28,508,755 for Excessive Rework (Claim Category 10) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
34. A specific award of US$ 264,263,099 for Excessive CMT (Claim Category 11) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
35. In the alternative to the prior request, a specific award of US$ 268,503,387 for Excessive CMT (alternative Claim Category 11) based on CB&I's Reimbursement Obligation.
36. A specific award of US$ 69,906,599 for Excessive Scaffolding (Claim Category 12) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
37. In the alternative to the prior request, a specific award of US$ 61,128,009 for Excessive Scaffolding (alternative Claim Category 12) based on CB&I's Reimbursement Obligation.
38. A specific award of US$ 8,739,885 for Unresolved Back-charges (Claim Category 13) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
39. A specific award of US$ 20,062,560 for Island Park Productivity Failures (Claim Category 14) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
40. A specific award of US$ 42,683,951 for EPC Labor Escalation Due to CB&I Failures (Claim Category 15) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
41. A specific award of US$ 688,755,958 for EPC Prolongation Due to CB&I Failures (Claim Category 16) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
42. In the alternative to the prior request, a specific award of US$ 652,116,799 for EPC Prolongation Due to CB&I Failures (alternative Claim Category 16) based on CB&I's Reimbursement Obligation.
43. A specific award of US$ 165,345,825 for Owner's Delay Costs Due to CB&I Failures (Claim Category 17) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.

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44. A specific award of US$ 109,883,718 for PCS Delay Costs Due to CB&I Failures (Claim Category 18) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
45. A specific award of US$ 1,615,527 for PCS Completion of Outstanding and Incomplete Work (Claim Category 19) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
46. A specific award of US$ 8,692,212 for PCS Correction of Defective Work (Claim Category 20) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
47. A specific award of US$ 10,318,811 for PCS Specific Impacts on Contractors Due to CB&I Failures (Claim Category 21) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
48. A specific award of US$ 42,586,609 for PCS Labor Productivity Loss (Claim Category 22) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
49. A specific award of Cost of Capital (Claim Category 23) on the Improper Costs awarded above calculated based on the date of the Tribunal's award and Reficar's 8.6% WACC, or in the alternative, by applying the contractual interest rate for late payments of LIBOR + 2%. (Based on the calculations of Breakwater Forensics, those cost of capital amounts on Reficar's execution-phase damages as of 10-May-2019 were US$ 382,803,640 and US$ 220,009,151 for the two interest rate options.)
50. A specific award of US$ 809,813,402 for Loss Profits (Claim Category 24) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach, with an offset/credit of (US$22,926,290) due to the extended life of the Refinery.
51. A specific award of US$ 325,007,417 for Cost of Capital on Loss Profits (Claim Category 25) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
52. A specific award of $12,235,789 for Lost Revenue from Electricity Sales (Claim Category 26) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
53. A specific award of US$ 140,265,957 for Unsubstantiated Advance Payments (Claim Category 27) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, (iv) CB&I's Reimbursement Obligation, and/or (v) CB&I's failure to

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substantiate invoices as required by the EPC Agreement, MOA, and PIP. However, to avoid duplication, this amount should be reduced by ratio of Improper EPC Costs awarded with respect to Requests 25 through 42 above in comparison to the total amounts paid directly to CB&I (US$ 3,967.38 million). For example, if the Tribunal awards US$ 1,590.08 million pursuant to the identified Requests, the US$ 140,265,957 amount should be reduced by 40.08% ($1,590.08/$3,967.38) to US$ 84.047 million.

54. A specific award of disgorgement of CB&I's profits and fees of at least US$ 225,000,000 (Claim Category 28) based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
55. In the alternative to Requests 43, 44, 50, 51, and 52 above (Delay Claim Categories Other than EPC Costs), a specific award of US$ 366,250,000 for Liquidated Damages for Delay based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, and/or (iii) CB&I's Fiduciary Breach.
56. In the alternative to Requests 25 through 42 above (Top-Down Claim Categories), an award of US$ 1,945.96 million in Improper EPC Costs as calculated in Long International's alternative Bottom-Up Methodology based on (i) CB&I's Contractual Dolo, (ii) the Inapplicability of the Limitations of Liability, (iii) CB&I's Fiduciary Breach, and/or (iv) CB&I's Reimbursement Obligation.
57. An award of equitable relief based on the facts and legal grounds expressed herein and in any prior filings.
58. An award of costs of the arbitration, including attorneys' fees.
59. An award of post-award interest, at the applicable rates under applicable law, until the effective date of payment of the award.
60. A declaration that the Tribunal has Liquidated the EPC Agreement and established the appropriate EPC Agreement value pursuant to its awards and declarations above.
61. Reficar also seeks any and all additional relief that the Tribunal may deem appropriate.

297. Pursuant to the RPHB, CB&I requests the Tribunal to issue an award containing the relief listed in the ESOD (para. 293 supra) under requests no. 1-9 and 11-37, in the Respondents' Reply on Counterclaim (para. 294 supra) and the following relief²⁸⁸:

1. An award of monetary damages of USD 146,964,022 under the Offshore Contract and COP 568,229,695,037 under the Onshore Contract;1501

²⁸⁸ RPHB, para. 675. ↩

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2. A declaration that CB&I does not owe Reficar for invoices Reficar previously paid, but subsequently failed or refused to "approve";
3. A declaration that neither Party has asserted a liquidated claim for indemnity, and any claims for indemnity asserted in this Arbitration are premature and not ripe for resolution;
4. A declaration that Reficar shall return the sum it improperly drew on the Performance LC to CB&I UK and pay all of CB&I's legal costs and expenses associated with legal challenges to Reficar's demands on the Performance LC and Advance Payment LC;
5. A declaration that CB&I did not breach a pre-contractual duty to act in good faith and/or act with pre-contractual dolo;
6. A declaration that (i) CB&I UK has demanded payment of amounts owed jointly and severally to CB&I UK and CBI Colombiana in this Arbitration, and (ii) requiring Reficar to pay CB&I UK any amounts awarded in this Arbitration that are owned jointly and severally to CB&I UK and CBI Colombiana as required by article 1570 of the Colombian Civil Code; and
7. A declaration pursuant to article 1570 of the Colombian Civil Code that amounts owed to CBI Colombiana under the Onshore Contract can be set-off between Reficar and CB&I UK based on CB&I UK's status as a joint and several creditor with CBI Colombiana.

4. BLENDED REQUESTS FOR RELIEF

298. As acknowledged by the Parties, many of Claimant's requests overlap with those of Respondents'²⁸⁹; furthermore, as a consequence of the Tribunal's findings, a significant number of requests will become moot – these requests are not specifically mentioned in the table below, but will be adjudicated in Section X.6 infra.

299. Once duplicative and moot requests are excluded²⁹⁰, the approximately 100 individual requests can be subsumed into the following 14 blended requests for relief ["Blended Requests for Relief"]²⁹¹:

²⁸⁹ Tr. 200:9; RPHB, para. 637. ↩
²⁹⁰ See section X.6 infra. ↩
²⁹¹ The Tribunal will assume that, (i) if not mentioned in further requests for relief and (ii) not pleaded in the body of the Parties' main submissions, any other requests for relief have been waived by the Parties ↩

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²⁹² As requested in para. 37.r) of the Terms of Reference and pleaded in SOC, paras. 619, 810 and 813, and CPHB2, p. 25. ↩

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VII. MERITS

300. Claimant's first claim is for CB&I's pre-contractual liability, which it incurred through inducing Reficar to enter into a cost-reimbursable agreement with the limitations of liability and risk allocation through dolo incidental, or bad faith in contract negotiations (VII.1.).

301. Reficar and CB&I bring a number of contractual claims (VII.2.): first, Reficar requests relief for Improper EPC Costs (VII.2.1.), second, for Improper Delay (VII.2.3.), third, for Work Completion costs (VII.2.4.) and finally for Procurement costs (VII.2.5.). CB&I denies Reficar's claims and brings a counterclaim, mostly for unpaid invoices (VII.2.2.).

302. In addition, both Parties request from the Tribunal declaratory relief related to the indemnification obligations under the EPC Contract (VII.2.6.).

303. Finally, Reficar brings a number of claims that the Tribunal will reject as they fall outside the Tribunal's power (VII.3.).

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VII.1.REFICAR'S PRE-CONTRACTUAL CLAIMS

304. Reficar avers that it was induced by CB&I into changing the price structure of the EPC Contract from lump sum to cost reimbursable. Reficar makes CB&I pre-contractually liable for dolo incidental based on two premises:

- Respondents' failure to abide by their good faith duty to inform and provide Reficar with relevant information that was crucial to its agreement to the terms of the 2010 EPC Contracts;

- Reficar entered into the 2010 EPC Contracts on less beneficial terms due to CB&I's deception.

305. Reficar claims damages as a consequence of that deceit, because the contract turned out to be more onerous than what Reficar had been led to believe it would be.

306. CB&I, on the other hand, argues that its pre-contract actions constituted neither a breach of good faith nor dolo incidental (nor its equivalent under New York law).

307. The Tribunal will start by providing a summary of the facts (VII.1.1). Then, it will briefly summarize the Parties' positions (VII.1.2). Finally, it shall take a decision (VII.1.3).

VII.1.1. FACTS

308. The Refinery was originally designed and built in the 1950's for Intercol, an Esso affiliate, by the construction conglomerate Bechtel²⁹³. In the 1970's the Refinery was acquired by the Colombian State through the State-owned company Ecopetrol²⁹⁴.

309. At that point in time, the Refinery was configured as a cracking refinery and was transforming low-sulfur crude oil of South American origin into propane, butane, motor gasoline, jet fuel, diesel, fuel oil and asphalt, for domestic production and export to other Latin American countries and the United States²⁹⁵.

310. By the early 2000's Ecopetrol felt the need to expand the Refinery, turning it into a more efficient and profitable business, whilst at the same time addressing environmental concerns to meet new clean fuel regulations for gasoline and diesel.

311. For this purpose Ecopetrol, essentially, did three things:

- First, it commissioned the engineering and construction company, Technip, to prepare a Master Development Plan (i.);

- Second, it looked for an international strategic partner to invest in the modernised and enhanced Refinery (ii.);

²⁹³ Ex. R-0459, p. 8. ↩
²⁹⁴ Ex. R-0459, p. 8, Houtz CWS, para. 12. ↩
²⁹⁵ Ex. R-0461, p. 6. ↩

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- Shortly thereafter, it began searching for a contractor (iii.).

312. (i.) The Master Development Plan, finalized by Technip in 2004²⁹⁶, was based on a LSTK contract estimate of approx. USD 800 million²⁹⁷. Technip advised, at that point, that an LSTK contract would eliminate the risk of possible construction cost overruns²⁹⁸.

313. (ii.) In 2005 Ecopetrol set up a tender to search for an investment partner²⁹⁹. Glencore won the bidding for a 51% ownership stake in the Refinery and, as a result, on October 3, 2006, Ecopetrol and Glencore signed the Framework Investment Agreement (Acuerdo Marco de Inversión) creating Reficar, the Claimant in the current arbitration³⁰⁰.

314. Glencore, with a majority stake in Reficar, and the right to nominate three out of five of the company's BofD members³⁰¹, took the lead in the development of the plan for the expansion of the Refinery. The leading role of Glencore is reflected in how the Framework Investment Agreement also specifically entrusted Glencore with developing the financing strategy for the Refinery Project³⁰².

315. This situation would eventually change in May 2009, when Ecopetrol re-purchased Glencore's shares in Reficar³⁰³ and assumed the management of the Project.

316. (iii.) In parallel to Reficar's constitution, a new tender was set up to search for the contractor.

317. By mid-2006, apart from CB&I, two other bidders submitted their proposals for the initial EPC contract - Technip (Italy) and Técnicas Reunidas (Spain)³⁰⁴. All of them made their proposals on the basis of an LSTK contract³⁰⁵.

318. CB&I showed persistent interest in the bid. On April 18, 2007, Mr. Jeffrey Sipes, the director of business development for CB&I Americas, reached out to Glencore to "discuss [...] the execution of the expansion on a firm price turnkey basis”³⁰⁶.

319. Emphasizing the importance of the price modality, Reficar replied on the same day asking for a confirmation of whether CB&I would be willing to undertake the work

²⁹⁶ Ex. R-0465; Ex. R-0462. ↩
²⁹⁷ Ex. R-0465, p. 6, identifies the number as approx. USD 792 million, while Ex. C-0907, p. 14 refers to USD 806 million (+/- 10%). ↩
²⁹⁸ Ex. R-0462, p. 7 "El proceso de consecución de una firma para la ingeniería de detalle y la construcción, debe ser realizada por medio de un contrato "llave en mano" a fin de eliminar el riesgo de los posibles sobre costos en la construcción". ↩
²⁹⁹ Ex. R-0468; Houtz CWS, para. 15. ↩
³⁰⁰ Ex. C-0024, p. 5; Ex. R-0473, p. 17; Houtz CWS, para. 16. ↩
³⁰¹ Houtz CWS, para. 19; Ex. C-0908, Secton 7.03 of the AMI. ↩
³⁰² Ex. C-0908, Section 5.04 of the AMI: "El Accionista Adjudicatario [Glencore] podrá diseñar el mecanismo de financiación que, de acuerdo con las buenas prácticas financieras, sea más conveniente para la Sociedad y esta, en el seno de la Junta Directiva, aprobará dicha estructura de financiación." ↩
³⁰³ Houtz CWS, para. 109; Ex. C-0939; Gutierrez CWS, para. 12. ↩
³⁰⁴ Ex. C-0054, p. 8. ↩
³⁰⁵ Ex. C-0388, p. 2: "The basic design documents developed in Phase II will be the basis of CBI's lump sum price". CB&I's presentation adhered to the premises of the bidding, which applied to all participants. ↩
³⁰⁶ Ex. R-0477, p. 4. ↩

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under a lump sum fixed price basis³⁰⁷. The following day, in his reply, Mr. Sipes stated as follows³⁰⁸:

"To confirm, we remain interested and capable of executing the refinery expansion on a lump sum basis. [...] CB&I is uniquely qualified to execute the expansion on an LSTK basis. We have relevant engineering experience on all the key process units, capability to perform the modular fabrication in house and experience with direct-hire construction in Colombia. We are one of the few (if any) companies that could adequately quantify and manage the risk and whose principal business model is lump sum turnkey contracting". [Emphasis added]

320. On October 10, 2007, CB&I issued a "Summary of [its] Proposal for Development of EPC Contract", in which it stated it had committed key project team resources to the project development effort and offered substantial cost savings for Reficar on the basis of an LSTK contract³⁰⁹. This document additionally promised that CB&I would "[m]aximize use of CBI direct hire construction force to maintain productivity"³¹⁰ and execute the "[m]ajority of Construction Activities” using “CBI employees at CBI's cost"³¹¹.

321. In October 2007 Nexant Chem Systems Limited ["Nexant"] prepared an independent evaluation of the planned EPC agreement and the bids submitted by the three would-be contractors³¹².

322. On the subject of the contracting strategy, Nexant unequivocally recommended a ""defined price' Lump Sum Turn Key (LSTK) contract" as the "optimum approach"³¹³. This was reinforced by further findings that³¹⁴:

• "The Project Sponsor and its shareholders have limited support resources to oversee the Project execution EPC and will require the closer approximation to a LSTK approach.
• The Project Sponsor and its shareholders do not have the resources to adopt high financial and technical risks and therefore need to negotiate an EPC Contract that can come closest to the optimum Project approach including moving the bid bases to a LSTK as soon as possible".

323. Regarding the bids, the Nexant report found that "[...] CB&I appears to propose the most feasible approach to the Project"³¹⁵. Reficar's Mr. Houtz testified that

³⁰⁷ Ex. R-0477, p. 3. ↩
³⁰⁸ Ex. R-0477, p. 2. ↩
³⁰⁹ Ex. C-0025. ↩
³¹⁰ Ex. C0025, p. 1. ↩
³¹¹ Ex. C0025, p. 3. ↩
³¹² H-1, slide 24; Ex. C-0054 at p. 8 – although the date when Nexant was retained is not explicitly stated in the exhibit, Reficar's representation of "early 2007" during the Hearing was never contested by CB&I and is logical given the date of Nexant's report – October 2007. ↩
³¹³ Ex. C-0054, p. 38. ↩
³¹⁴ Ex. C-0054, p. 39. ↩
³¹⁵ Ex. C-0054, p. 12. ↩

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CB&I's representations regarding the LSTK bid played an important role in its selection³¹⁶:

"During this timeframe, few contractors were interested in providing a LSTK bid for the Project, and CB&I's representations that it would pursue the Project on a LSTK basis was a material consideration to Reficar in selecting CB&I".

1. PROJECT DEFINITION PHASE

324. The Project Definition Phase, sets out the requirements for the project to achieve its goals under a defined scope³¹⁷; the Project Definition Phase, or pre-project planning, may be broken down into separate Front End Loading ["FEL"] phases:

- FEL-1 (Concept Definition / Feasibility),

- FEL-2 (Process Design) and

- FEL-3 (Basic Engineering),

with the two latter being jointly referred to as Front End Engineering Design ["FEED"]³¹⁸. The FEL 1 through 3 phases are separated by so-called "gates"³¹⁹ – these gates require the project to pass through decision-making “stops” which ensure that the project is ready to advance to the subsequent phase³²⁰.

325. The FEL-1 on the Project was handled by KBC Advanced Technologies ["KBC"], which delivered its FEL-1 report in December 2007³²¹; the document constituted one of the bases for the FEL-2 and FEL-3 phases for which CB&I later became responsible³²². CB&I was also involved in FEL-1 activities: it was contracted for early work supporting the definition of the facilities and coordinating supply of licensor technology³²³.

326. As the work on FEL-1 was nearing completion, on November 6, 2007, Reficar and CB&I entered into the "Project Definition Contract"³²⁴ for phases FEL-2 and FEL-3 (or the FEED), with the goal of developing the Project scope and schedule, and an LSTK price³²⁵.

327. The Project Definition Contract specifically allowed Reficar to appoint Technip – who had already produced the Master Development Plan back in 2004 and who

³¹⁶ Houtz CWS, para. 88. ↩
³¹⁷ B&O'B ER, Appendix C, para. 7. ↩
³¹⁸ B&O'B Rebuttal ER, footnote 13 on p. 11. ↩
³¹⁹ WMC ER, para. 226. ↩
³²⁰ WMC ER, para. 226. ↩
³²¹ Ex. B-013. ↩
³²² Ex. C-0910, p. 8; Ex. C-0390, p. 5. ↩
³²³ Ex. C-0391, p. 4. ↩
³²⁴ Ex. R-0010 (Ex. C-0006). Apart from CB&I, Technip was also involved in the 2007 Project Definition Contract, even though it acceded through a separate agreement. ↩
³²⁵ Ex. R-0010, p. 5. ↩

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provided the second highest evaluated bid – to carry out some of the FEED³²⁶; still, CB&I retained responsibility for this Project phase³²⁷.

328. The Project would start under a cost-reimbursable basis, followed by a definitive LSTK EPC contract³²⁸. Accordingly, in January 2008, when CB&I filed its first monthly progress report under the Project Definition Contract, it confirmed that while the FEL-2 and FEL-3 phases were paid on a cost reimbursable basis, there would be an eventual conversion to LSTK for the EPC phase³²⁹. Incidentally, the report acknowledged that the management of the budget and schedule during the cost reimbursable period would be the same as if the contract were an LSTK and there would be safeguarding of Reficar's resources as if they were CB&I's own³³⁰.

[This appears to be the first instance of this phrasing, which will be important in the Tribunal's analysis of CB&I's eventual contractual obligations.]

329. CB&I employees ultimately spent over one million man-hours working on the Project Definition Contract³³¹.

2. GENESIS OF THE SHIFT TO A COST REIMBURSABLE REMUNERATION SCHEME

330. Simply put, the differences between an LSTK and a cost-reimbursable contract are the following:

- In an LSTK contract the contractor tenders a price for the completion of the scope of works - hence, the risk of cost overruns and delays lies with the contractor and not with the owner;

- In a cost plus contract, the contractor bills the owner the costs incurred in the completion of the scope of works plus a margin – thus, the price and time risks rests with the owner and not with the contractor.

Change in CB&I's attitude

331. The Refinery Project was not CB&I's first LSTK contract; in fact, as per its own representations, it had ample previous experience and it had just finalized two UK-based LSTK projects – alas with significant losses³³².

332. In an airplane conversation in spring 2008 CB&I's Mr. Sipes told Reficar's Mr. Houtz that "CB&I wanted to avoid another LSTK contract" because "CB&I

³²⁶ Ex. C-0006, p. 18 at Clause 10.27. and under 1.1, Definitions: "Basic Design Engineering Contractor" means Technip or such Other Contractor as may be appointed by RCSA and approved by Contractor whose approval will not be unreasonably withheld." ↩
³²⁷ Houtz CWS, paras. 54, 59; Figure 3 on p. 24 shows that CB&I was responsible for the Basic Design of almost half of the units, with Technip responsible for some -- as subcontractor to CB&I - and MECOR and KBR responsible for one unit each. Technip acted as a sub-contractor to CB&I. ↩
³²⁸ Ex. R-0010, Schedule One, para. 1, p. 56. ↩
³²⁹ Ex. C-0390, p. 2. ↩
³³⁰ Ex. C-0390, p. 2. ↩
³³¹ Ex. C-0009, p. 15. ↩
³³² Ex. C-0011, pp. 3-4. ↩

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had recently lost money on a lump sum project in Ireland" and "contractors [were] leery to commit to LSTK contracting arrangements"³³³.

333. In May 2008, CB&I informed Reficar that an LSTK price would have to account for escalation costs in a range between 10% and 40%, increasing the contract price from USD 3.5-4.8 billion to USD 4.3-5.5 billion³³⁴; reflecting the premium on LSTK contracting in times of highly volatile market conditions. CB&I requested a meeting to "discuss [...] the potential impact of escalation, continued scope growth and contracting strategy”³³⁵.

334. Given its losses on the two UK-based LSTK projects, CB&I decided to reduce the number of LSTK contracts and move to cost-reimbursable ones. This step was explicitly announced by CB&I in an investor call on July 15, 2008³³⁶:

"As we have discussed on numerous occasions, we are de-risking our portfolio by modifying our fixed price business model. During the past year, we have reduced CB&I's risk profile from 90%+ higher-risk projects to around 55%. [...] We are also targeting a portfolio mix of no more than 20 to 25% risk in work by the end of 2009".

335. While CB&I was changing its strategy to favour lower-risk RC contracts over LSTK ones, the volatile market conditions prompted Reficar to independently reassess whether to proceed with the EPC phase of the Project on an LSTK or RC basis.

A. Reficar's June Steering Committee

336. On June 10, 2008 Reficar's Steering Committee met to examine the different contracting strategies for the Project. In view of CB&I's reluctance and the price increase that an LSTK contract implied, in that meeting Reficar did not oppose the change in contract structure and made a presentation acknowledging that the LSTK strategy was no longer considered the optimal approach, because no projects of similar size were being conducted under LSTK, and RC contracts offered considerable savings³³⁷.

³³³ Houtz CWS, para. 87, quoted in RPHB1, para. 77. ↩
³³⁴ Ex. R-0484, p. 2. ↩
³³⁵ Ex. R-0484. ↩
³³⁶ Ex. C-0011, p. 4. ↩
³³⁷ Ex. C-0928, p. 44. The Tribunal notes that the Agenda slide of the presentation, at p. 2, mentions that the relevant section of the presentation was made by "EH", which must mean Mr. Ernest Houtz, who at that point was an employee of Glencore; Mr. Houtz claims that the Steering Committee at the time was comprised mainly of Glencore representatives and that no members of Ecopetrol were on the Steering Committee as Ecopetrol had not yet re-purchased Glencore's shares in the Project, see Houtz CWS, para. 90. ↩

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Change in EPC Strategy

• We no longer consider LSTK strategy the optimal approach

• No projects of this size are being conducted under LSTK

• LSTK will prove unaffordable as contractor will charge 17.5% margin plus excessive contingencies over and above the expected price escalation

• We feel we could negotiate a much reduced mark-up while retaining completion schedule commitments and single point performance wraps on a cost-plus basis (say, 10% margin)

• The above combined would represent $500 mill in savings

• On that basis, the current strategy of soliciting competing bids from Technip and CBI would be redundant

B. Reficar's June BofD meeting

337. Also in June 2008, Reficar's highest administrative body, the BofD met. The BofD had representatives of both shareholders at the time, Ecopetrol and Glencore. The discussion of an "[u]pdate of the revision of the contracting strategy of EPC" was put on the agenda³³⁸, the chairman made a presentation and at the end no decision was taken, except to order management to study the issue in depth³³⁹:

"Después de discutir el tema, la Junta Directiva instruyó a la Sociedad estudiar con mayor profundidad el tema y presentar a los Directores los análisis y soporte[s] suficientes para efectos de poder tomar una decisión sobre la posibilidad de [...] modificar el tipo de contrato llave en mano o LSTK a un contrato "cost plus""".

338. Towards the end of the month, representatives of Reficar and CB&I exchanged emails apparently confirming that "current contractual arrangements will be changed to cost reimbursable"³⁴⁰.

C. Retention of Pathfinder

339. In order to make an informed decision on the change, and to comply with the instructions given by its BofD, Reficar retained Pathfinder LLC ["Pathfinder"], a respectable consultancy, to evaluate the alternative contracting strategies and review the cost estimate prepared by CB&I³⁴¹. Pathfinder was specifically put on notice that Reficar was considering executing the Project on a cost plus basis³⁴².

³³⁸ Ex. R-0489, p. 2 at, 2.5, pp. 3-4 at 5. ↩
³³⁹ Ex. R-0489, p. 4; translation at p. 16: ↩
"After discussing the topic, the Board of Directors instructed the Company to study it more in depth and present the Directors with suficient analysis and support to be able to make a decision on the possibility of [...] modifying the type of turnkey or LSTK contract to a "cost plus" contract type".
³⁴⁰ Ex. R-2067, p. 2; Canals RWS, para. 78. ↩
³⁴¹ Ex. R-0488, p. 9; Ex. R-0487, p. 4. ↩
³⁴² Ex. C-0012, p. 2: "Whereas the original plan was to obtain LSTK bids from both contractors, we are now considering executing the project on a cost plus basis, with CBI and Technip operating as a consortium during the execution of the rest of the basic design and the EPC phase." ↩

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340. On July 9, 2008, Pathfinder made an assessment of the Project in which it found that "a satisfactory LSTK arrangement may not be achievable"³⁴³ as

"project costs have typically been highest for Negotiated LS[TK] contracts" and that the best recommendation was for "reimbursable contracting arrangements, particularly when reinforced with effective Incentive Programs"³⁴⁴.

341. Pathfinder likewise observed that, at that time, attempts by other market participants to start out contracts on an RC basis with a switch to LSTK modality for the EPC phase "have been largely unsuccessful"³⁴⁵. The consultant concluded that the option of using an RC contract for EPC "clearly appear[ed] to be the preferred Case!"³⁴⁶ and provided the following graphic, showing the vast cost savings offered by the RC modality in the contemporaneous business climate³⁴⁷:

342. At the same time, Pathfinder identified numerous risks associated with the switch to an RC contract, including the assumption of risk for cost overruns³⁴⁸, but still concluded that this strategy was the optimal one³⁴⁹. In order to mitigate the risks involved, Reficar would first need to revise the contracts already in place with CB&I and Technip and a suitable +/-10% accuracy Cost Estimate, among other items, would need to be in place³⁵⁰.

D. Reficar's July Steering Committee

343. The day after Pathfinder delivered its findings, on July 10, 2008 Reficar's Steering Committee met again and was given another presentation on the subject of contract modality³⁵¹. The presentation stressed that CB&I did not support an LSTK

³⁴³ Ex. R-0487, p. 6. ↩
³⁴⁴ Ex. R-0487, pp. 7-8. ↩
³⁴⁵ Ex. R-0487, p. 7. ↩
³⁴⁶ Ex. R-0487, pp. 9, 14. ↩
³⁴⁷ Ex. R-0487, p. 8. ↩
³⁴⁸ Ex. R-0487, p. 16. ↩
³⁴⁹ Ex. R-0487, p. 17. ↩
³⁵⁰ Ex. R-0487, p. 17. ↩
³⁵¹ Ex. C-0930, p. 63; see also Ex. R-0455, p. 73. ↩

[Page 110]

contract³⁵² and that the market conditions had changed, leading to a possible additional cost of over USD 500 million³⁵³; furthermore, the cost margin in the reimbursable modality was forecasted to be 10% lower than that for an LSTK contract³⁵⁴. The Steering Committee urged the BofD to make a speedy decision³⁵⁵ because "[it] need[ed] to obtain Board approval to immediately proceed with negotiations [...] of a cost plus contract"³⁵⁶.

E. Reficar's July BofD meeting

344. In view of Pathfinder's findings, and the July 10, 2008Steering Committee's request, on July 15, 2008 Reficar's BofD discussed again the strategy for the EPC Contract, on the basis of two presentations by the then President of Reficar, Mr. Richard Cohen, indicating

"Las diversas razones que encuentra la administración para determinar que se debe cambiar la estrategia de contratación a buscar un contrato cost-plus"³⁵⁷.

345. Among others, he explained that worldwide projects were being changed from LSTK to cost plus pricing, in order to reduce costs; the anticipated surcharge for an LSTK option would amount to USD 500 million³⁵⁸.

346. On the basis of Mr. Cohen's explanations, the BofD took a cautious approach³⁵⁹:

- It authorized management to meet and confer with CB&I and Technip to discuss a cost plus EPC contract option, but without assuming any commitment;

- It instructed management to review with Pathfinder and with Linklaters (the law firm engaged by Reficar to advise on the contract negotiations) the strategy and negotiation position and to report back to the BofD.

347. On July 15, 2008, i.e., five days after the Steering Committee meeting and on the same day when Reficar's BofD instructed management to approach CB&I about a potential switch to RC, the investor call mentioned before (see para. 334 supra) took place, in which CB&I announced to investors a change in its strategy to limit exposure to LSTK contracts³⁶⁰.

³⁵² Ex. C-0930, p. 75. ↩
³⁵³ Ex. C-0930, p. 72. ↩
³⁵⁴ Ex. C-0930, p. 75. ↩
³⁵⁵ Ex. C-0930, p. 75. ↩
³⁵⁶ Ex. C-0930, p. 80. ↩
³⁵⁷ Ex. C-0014, pp. 4-5, English translation at p. 15: ↩
"The various reasons found by the administration for determining that the contracting strategy should change to seeking a cost-plus contract with a consortium made up of CB&I and Technip".
³⁵⁸ Ex. C-0014, p. 5. ↩
³⁵⁹ Ex. C-0014, pp. 5-6. ↩
³⁶⁰ Ex. C-0011, p. 4. ↩

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348. Also in July 2008 CB&I provided Reficar's Dr. Cohen and Mr. Houtz with the iCHemE Green Book for Reimbursable Contracts [the "Green Book"], a reliable source of information on the general risk assumption under RC contracts³⁶¹.

F. Reficar's October BofD meeting

349. In October 2008 Reficar's BofD discussed a detailed comparison of the pros and cons of entering into an LSTK contract, on the basis of a 15-page presentation³⁶².

350. The recommendation by management was to proceed with a switch to a cost-reimbursable structure as it would "minimize the price and [...] maximize Reficar's negotiation flexibility [and] facilitate obtaining of financing under current market conditions", as opposed to maintaining an LSTK contract, under which "[t]he transfer of risk is imperfect and has a high asymmetric cost"³⁶³.

Recomendación

• La transferencia de riesgo bajo un LSTK es imperfecta y tiene un costo asimétrico
  • Los riesgos asumidos por el contratista son limitados
  • Como el proyecto va a ser financiado, bajo un LSTK solo se transfiere el riesgo si los socios están dispuestos a abandonar el proyecto
• Estrategia RC minimizará el precio y maximizara flexibilidad de negociación de Reficar
• El esquema RC facilitará la obtención de financiación bajo las actuales condiciones de mercado
• Basado en lo anterior, Reficar solicita aprobación de la Junta para culminar las negociaciones del contrato EPC bajo un esquema RC dentro de las condiciones comerciales descritas a continuación
• Una reunión de junta directiva especial se agendará para aprobar el contrato una vez finalice la negociación

351. Notwithstanding the recommendation, the BofD again postponed a decision³⁶⁴.

352. In November 2008 CB&I insisted on recommending Reficar to switch to an RC contract, emphasizing the “enormous potential" for cost savings that this change would entail for Reficar³⁶⁵:

"There exists an enormous potential for cost savings due to the global economic crisis and its effect on currencies relative the U.S. Dollar and

³⁶¹ Tr.: 1618:8-1619:12. ↩
³⁶² Ex. R-0502. ↩
³⁶³ Ex. R-0502, p. 14 (30 for English translation): ↩
"Recommendation
The transfer of risk under an LSTK mode is imperfect and has a high asymmetric cost
- The risks assumed by the contractor are limited
- Since the project is going to be financed, under LSTK mode the risk is only transferred if the partners are willing to abandon the project
The RC strategy will minimize the price and will maximize Reficar's negotiation flexibility.
The RC scheme will facilitate the obtaining of financing under current market conditions
Based on the foregoing, Reficar requests approval from the Board to conclude the negotiations of the EPC contract under an RC scheme within the commercial conditions described as follows
A special meeting of the board of directors will be scheduled in order to approve the contract once negotiations have concluded".
³⁶⁴ Ex. R-0456, p. 4. ↩
³⁶⁵ Ex. C-0020. ↩

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material pricing - a savings that Reficar cannot fully realize in a lump sum contract" [Emphasis added].

G. Reficar's November BofD meeting

353. Still unsure what to decide, Reficar's BofD met on November 24, 2008 and pondered three documents recommending a switch to RC contracting – none of which was prepared by CB&I³⁶⁶:

- A report by Nexidea (i.);

- A letter from Citigroup (ii.); and

- A letter from Technip (iii.).

354. (i.) Nexidea was a consultancy which had been engaged to independently quantify the risk associated with Reficar entering into a cost-plus EPC contract³⁶⁷. Nexidea's findings supported a switch to an RC contract:³⁶⁸

"Savings in Cost-Plus Contract Versus LSTK Contract - Based upon the premise that (a) the historical cost model is accurate and (b) the EPC contractor will seek to increase the negotiated fixed price of a LSTK contract to limit the risk of a cost overrun to less than 5 percent of the cases, Reficar should expect to save nine (9) percent of the project cost by going with a cost-plus contract. The savings are potentially much greater considering the recent economic changes and expected downturn in costs". [Emphasis added]

355. (ii.) Attachment 10 to the BofD Meeting Minutes is a letter from one of Reficar's lenders³⁶⁹: on November 16, 2008, the director of Citigroup Global Markets Inc. ["Citigroup"], wrote to Reficar stating that Citigroup could not recommend whether an LSTK or RC basis for the contract would be a better approach for Reficar³⁷⁰. He did state, however, that in the contemporaneous difficult market conditions, lenders

"usually prefer projects that are conservatively structured, which would mean having either a very strong LSTK EPC contract with appropriate additional contingent equity commitments or completion guarantees from creditworthy sponsors"³⁷¹.

356. He also noted that

"very few similar downstream mega-projects have been financed on the basis of a LSTK, possibly due to the high cost of obtaining a true turnkey "wrap"

³⁶⁶ Ex. R-0476. ↩
³⁶⁷ Ex. R-1853_002, p. 3; see also Ex. R-0455, p. 79 (406 for English). Nexidea had previously been retained by Glencore to prepare the estimated cost of upgrading the Refinery back in 2006 – see Ex. R-0461. ↩
³⁶⁸ Ex. R-1853_002, p. 7. ↩
³⁶⁹ Ex. R-0505. ↩
³⁷⁰ Ex. R-0505, p. 1. ↩
³⁷¹ Ex. R-0505, p. 1. ↩

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and/or the difficulty of finding contractors which are truly willing and able to accept such a large potential liability"³⁷².

357. (iii.) The other contractor on the Project, Technip, was likewise against continuing with the Project on an LSTK basis³⁷³:

"[a]s of today considering the present world financial turmoil, the possible market modifications during 2009 and the schedule of the Project, [Technip] consider that it would not be advisable on this date to proceed with an EPC lump sum turnkey solution".

358. Having received all this information, the BofD discussed the alternatives and again postponed any decision³⁷⁴.

359. In late 2008/early 2009³⁷⁵, Reficar hired Independent Project Analysis Inc. [“IPA”], a consulting firm specializing in the evaluation of risk for large-scale projects, to review the Project, which resulted in a March 2009 report, which confirmed that at that time, a decision on the contract modality had not yet been made³⁷⁶.

3. GLENCORE'S EXIT

360. As the global financial crisis deepened towards the end of 2008, directly affecting the certainty of the financing for the Project³⁷⁷, Glencore advised Reficar to continue with all the activities for the basic engineering as planned, but suspend the EPC work on the Project until the requisite funding was secured³⁷⁸. Ecopetrol disagreed, insisting that Glencore continue with the Project as it had been agreed, and not suspend the EPC phase³⁷⁹. Reficar began to study the possibility of continuing without Glencore³⁸⁰. Glencore warned that while suspending the Project would lead to delays, it "saw no alternative in the economic environment"³⁸¹.

361. As anticipated, in May 2009, Ecopetrol exercised its pre-emptive right and re-purchased the 51% stake held by Glencore in Reficar for USD 549 million³⁸². Ecopetrol, thus, became the only shareholder of Reficar, a company now fully owned and controlled by the Republic of Colombia.

4. REFICAR'S BUDGET APPROVAL AND THE LOI

362. An important meeting by Ecopetrol's BofD took place on October 9, 2009, when the Project was officially green-lighted with a total budget set at USD 3.777 billion

³⁷² Ex. R-0505, p. 1. ↩
³⁷³ Ex. R-0503. ↩
³⁷⁴ Ex. R-0476, pp. 10-12. ↩
³⁷⁵ Ex. C-0316, p. 1. ↩
³⁷⁶ Ex. R-2994, p. 20. ↩
³⁷⁷ Ex. C-0936, p.1. ↩
³⁷⁸ Ex. R-1837, pp. 4-5. ↩
³⁷⁹ Ex. R-1837, p. 10. ↩
³⁸⁰ Ex. R-1837, p. 8. ↩
³⁸¹ Ex. R-1837, p. 5. ↩
³⁸² Ex. R-0024, p. 3; Ex. R-0038, p. 15. ↩

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+/- 10%³⁸³ and Ecopetrol accepted to act as guarantor for the financing to be granted to its affiliate Reficar³⁸⁴.

363. Reficar's BofD followed in the footsteps: on October 20, 2009, it approved the budget for the EPC costs of USD 2.789 billion +/- 10%³⁸⁵. The total budget reached USD 3.777 billion (the same number previously agreed by Ecopetrol's BofD), resulting from EPC costs plus escalation, contingency, owner costs and sunk costs³⁸⁶:

The LOI

364. Ecopetrol's and Reficar's BofDs had thus approved the budget for the EPC Contract and for the Project, but the decision on the contract modality for the EPC contract was still outstanding.

365. Reficar's doubt finally ended on November 10, 2009, when it took the decision to contract on an RC basis, with CB&I acting as contractor³⁸⁷. On that date Reficar and CB&I entered into a LOI³⁸⁸, which contained the key commercial terms and interim provisions while the Parties negotiated in good faith towards the final RC based EPC Contract³⁸⁹.

366. Two weeks after signature of the LOI, in its meeting of November 24, 2009 Reficar's BofD was informed of and did not object to the LOI³⁹⁰ – implying its agreement to a cost-reimbursable EPC Contract.

³⁸³ Ex. R-1848, pp. 14, 17. ↩
³⁸⁴ Ex. R-1848, p. 17. ↩
³⁸⁵ Ex. R-3708, p. 10 in conjunction with Ex. R-1853_0054, p. 3. ↩
³⁸⁶ Ex. R-1853_0054, p. 3. ↩
³⁸⁷ RFA Ex. 30, p. 4: "The following agreed Key Commercial Principles will be used as the basis for preparation of a Cost Reimbursable EPC Contract for the Cartagena Refinery Expansion Project" [Emphasis added]. ↩
³⁸⁸ RFA Ex. 30. ↩
³⁸⁹ Ex. R-0047 (Ex. C-0037). ↩
³⁹⁰ See Ex. R 1853 (Contraloria File)\Contraloria\CARPETA PRINCIPAL 1\Actas Directiva R1-77\Acta No. 48 (unnumbered), p. 3: "[Felipe Castilla] [i]nformó que el 10 de noviembre se suscribió una carta de ↩

[Page 115]

367. After the signing of the LOI, no more discussions may be found in the record of a possibility of going back to the LSTK contract pricing structure.

368. A week after entering into the LOI, CB&I announced that it had been awarded a USD 1.4 billion reimbursable EPC contract for the Refinery Project³⁹¹.

Change to single contractor

369. An important part of the changes brought about by the November 2009 LOI, signed only with CB&I, was that from that moment on, the Project continued with CB&I as the only contractor on the Project. Technip, who had developed the July 2009 Estimate together with CB&I, was terminated by Reficar on December 28, 2009³⁹².

Foster Wheeler

370. At around the same time, on November 19, 2009 Reficar hired Foster Wheeler Consultants Inc. [previously defined as "Foster Wheeler"] as Project Management Consultant³⁹³. Foster Wheeler was an old acquaintance of Ecopetrol's: it had already verified some of CB&I's estimates³⁹⁴ and was involved in Ecopetrol's other refinery³⁹⁵.

5. CBI'S COST ESTIMATES

371. One of the main conditions for a successful CR contract is to have an accurate cost estimate prior to the signing. Such an estimate serves as the baseline for the decision to enter into the contract, and for the management of costs during execution.

372. In the previous section, the Tribunal has explained that in September/October 2009 the BofDs of Ecopetrol and Reficar approved their own budgets for the EPC contract of USD 2.789 billion +/-10% (the total Project was budgeted at USD 3.777 billion).

373. But Ecopetrol/Reficar was not the only party preparing budgets. CB&I did likewise. The EPC Contract which Reficar and CB&I would eventually enter into, included the concept of a Final Full Estimate, defined as an estimate which meets the Class II +/-10% accuracy requirements³⁹⁶.

374. In anticipation of this contractual obligation, CB&I prepared a July 2009 Estimate (C.) and a February 2010 Estimate Revision (D.), preceded by numerous preliminary cost estimates (B.). Before analysing these Estimates, the Tribunal must address certain issues (A.).

intención por parte de la Sociedad y aceptada por CBI [...] Sobre este tema, igualmente se manifestó que los nuevos contratos se están estructurando como "reembolsables" [...]."
³⁹¹ Ex. C-1924, p. 5. ↩
³⁹² Ex. R-0049, p. 1. ↩
³⁹³ Ex. R-0822; Ex. R-0534, p. 43. There was also a contract with Process Consultants Inc. Bogotá – Foster Wheeler's Colombian subsidiary and joint venture partner on the Project. ↩
³⁹⁴ Ex. R-0494, pp. 8-10; Ex. B-042, p. 29. ↩
³⁹⁵ Ex. C-0173; Ex. C-0398, p. 2. ↩
³⁹⁶ JX-002, p. 165; JX-004, p. 151. ↩

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A. Preliminary issues

375. There are three issues to be addressed³⁹⁷; the methodology used to elaborate the estimate (a.), the accuracy of the estimate (b.) and the productivity factor underlying the estimate (c.).

a. Methodology

376. A crucial element of any estimate by a constructor is the methodology that serves as its basis. Constructors typically prepare memoranda, for the benefit of the owner, explaining how they produce their cost estimates. CB&I did likewise: on January 30, 2009 it issued its Guidelines on Cost Estimate Classification System, with the purpose

"[t]o provide the descriptions of the CB&I Cost Estimate System classes as provided by AACE International (American Association of Cost Engineers)"³⁹⁸.

This means that CB&I had adopted the Cost Estimate Classification System provided by AACE International.

377. The AACE is a widely respected body in the domain of engineering, as acknowledged by CB&I³⁹⁹. It has developed a classification of cost estimates, whose Class number (1 through 5, or I – V in Roman numbers, which are used interchangeably) is based on the degree of project definition and the expected accuracy range. CB&I was to deliver an AACE Class II⁴⁰⁰ estimate, meaning one based on a certain maturity of the engineering deliverables and with an accuracy level within a specified range⁴⁰¹.

b. Accuracy level

378. The second key element of the Final Full Estimate is its accuracy level. The Parties agreed that the Final Full Estimate to be prepared by CB&I must be within +/-10% accuracy. This understanding was not formalized in the EPC Contract, but rather in the draft Execution Masterplan⁴⁰² prepared by Reficar and its consultant and shared with CB&I on September 19, 2008⁴⁰³; in January 2009, CB&I issued the final version of the Execution Masterplan reiterating this assumption⁴⁰⁴.

³⁹⁷ The Tribunal notes that another requirement for the Final Full Estimate was that it would be at P80, meaning the risk of the estimate number exceeding the predicted costs was supposed to be limited to 20%. While Reficar mentions this requirement, it does not develop its argument on this characteristic of the estimate. ↩
³⁹⁸ Ex. C-0382, p. 2. ↩
³⁹⁹ Ex. C-0382, p. 2. ↩
⁴⁰⁰ The Tribunal notes that some of the evidence on file refers to "Class II" estimates (in Roman numerals); these are harmonized to reflect the convention of the Arabic numerals 1-5, rather than the Roman I-V, as used by the AACE. See ex. R-1985, p. 3. ↩
⁴⁰¹ This range being between +5% to +20% and between -15% to -5%. ↩
⁴⁰² The Tribunal notes that various Project plan documents were involved in the Project; for ease of reference; the current document is Ex. C-0024; other project plan documents will be referred to using different terminology. ↩
⁴⁰³ Ex. R-0641, p. 28. ↩
⁴⁰⁴ Ex. C-0024, pp 13-14, p. 35, p. 106. ↩

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379. CB&I's obligation to deliver an estimate with an accuracy of +/-10% is confirmed by numerous other sources:

- During the Hearing, both CB&I's lead estimator, Kris Gachassin⁴⁰⁵ and CB&I's expert, David Millican⁴⁰⁶, admitted that CB&I was aware that a Class 2 cost estimate within +/-10% accuracy was required for Reficar as a basis for its financing of the Project;

- The report by IPA, a consulting firm specializing in the evaluation of risk for large-scale projects, from March 2009, listed "a cost estimate accurate to within perhaps +/-10%" as one of the key products of the FEED phase⁴⁰⁷;

- CB&I acknowledged in a Steering Committee meeting on May 19, 2009 that it would provide a +/-10% estimate⁴⁰⁸.

c. Productivity factor

380. Another relevant element of cost estimates is the productivity factor which underlies the calculations. The craft productivity multipliers determine how quickly work is expected to be performed. The ratio for the productivity multipliers is based on the US Gulf Coast work hours, i.e., how long it would take the workers on-site in Cartagena to perform the same amount of work as workers on the US Gulf Coast⁴⁰⁹.

381. The discussion on the appropriate craft productivity multipliers dates back to early 2007, when CB&I was trying to convince Reficar to enter into the Project Definition Contract. It was then that CB&I represented to Reficar that it had experience with direct-hire construction in Colombia⁴¹⁰.

382. The Parties now argue on who was responsible for estimating the productivity factors, which, in the course of the Project, turned out to have been understated.

B. Preliminary cost estimates

383. The Tribunal will now briefly address these preliminary cost estimates, which were prepared by CB&I under the two contracting modalities, at a time when Reficar was pondering which of the two to choose.

a. LSTK pricing

384. In May 2008 CB&I presented its first own cost estimate for the Project. With +23/-11.5% accuracy it estimated the cost of the Project at between USD 3.45 billion and USD 4.8 billion, with a reference point of USD 3.9 billion⁴¹¹.

⁴⁰⁵ Tr. 2646:15-2648:8. ↩
⁴⁰⁶ Tr. 5305:14-5306:7; Mr. Milican testified to Mr. Deidehban's words on this and agreed that the estimate was required to meet the AACE requirements. ↩
⁴⁰⁷ Ex. R-2994, p. 86. ↩
⁴⁰⁸ Ex. C-0173, p. 2. ↩
⁴⁰⁹ Ex. C-0041, p. 22, Hillier ER, Section B, at B6.2. ↩
⁴¹⁰ Ex. R-0477, p. 2. ↩
⁴¹¹ Ex. R-0484, pp. 3-4. ↩

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385. One month thereafter CB&I together with Technip revised the May 2008 estimate to account for further Project scope reductions and other design parameter changes, leading to a +23/-11.5% accuracy estimate between USD 3.15 billion and USD 4.3 billion, with a lower reference value of USD 3.522 billion⁴¹². In an email of July 20, 2008, CB&I presented a preliminary cost estimate amounting to USD 3.518 billion⁴¹³. By November 21, 2008, CB&I's last LSTK estimate, had increased to USD 4.561 billion⁴¹⁴.

386. Meanwhile, Reficar had retained Pathfinder to help control the estimating process. Pathfinder had even sent a team of four persons to CB&I Houston Office to become familiar with the work process⁴¹⁵; ultimately, Pathfinder would provide a detailed analysis of the numbers and methodology of CB&I's November 2008 estimate, the first one prepared on the basis of RC pricing⁴¹⁶.

b. RC pricing

387. This first RC cost estimate was provided on November 17, 2008, and was set at USD 3.654 billion (+/-15%)⁴¹⁷. On December 12, 2008, CB&I issued a revised cost estimate which decreased the reference value from USD 3.654 billion to USD 3.421 billion, excluding escalation, contingency and owner's costs⁴¹⁸.

388. On January 7, 2009, Reficar requested meetings to reduce the Project budget because the conditions for obtaining financing were deteriorating⁴¹⁹. These "Value Engineering Meetings" hosted by CB&I in Houston were held on January 12-20, 2009⁴²⁰ and resulted in a set of changes to the Project agreed on March 10, 2009, which amounted to savings of USD 125 million⁴²¹.

389. A few days thereafter, on January 29, 2009, CB&I issued the Execution Masterplan; which addressed a key issue for the upcoming Final Full Estimate: the appropriate productivity factor for the construction should be a multiplier in the 1.6 to 1.7 range vs. US Gulf Coast standard⁴²². This multiplier would be achieved by

"increasing the rate of supervision for each crew and assuring the materials, drawings and tools needed to perform the work are available according the plan"⁴²³.

⁴¹² Ex. R-0486, pp. 4-5. ↩
⁴¹³ Ex. C-0017. ↩
⁴¹⁴ Ex. C-0018, p. 2. ↩
⁴¹⁵ Ex. R-0029, p. 5. ↩
⁴¹⁶ Ex. R-0029. ↩
⁴¹⁷ Ex. R-0028 p. 6; Respondents' Combined Chronology, p. 13; Ex. R-0029, p. 8. ↩
⁴¹⁸ Ex. C-0395. ↩
⁴¹⁹ Ex. R-0020. ↩
⁴²⁰ Ex. R-0513. ↩
⁴²¹ Ex. R-0514, p. 2. ↩
⁴²² Ex. C-0024, p. 18. ↩
⁴²³ Ex. C-0024, p. 46. ↩

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390. In March 2009, Reficar's consultant IPA delivered a report in which it analysed the CB&I November 2008 cost estimate⁴²⁴. IPA also made a presentation in which it accepted average productivity in Colombia as 1.7 the US Golf Coast rate⁴²⁵.

391. On April 6, 2009, CB&I issued Revision 2 of the Project Execution Strategy, which foresaw a total cost of USD 3.4 billion⁴²⁶.

C. The July 2009 Estimate

392. CB&I had, by mid-2009, presented a total of five preliminary cost estimates and was intimately familiar with the Project, as it was responsible for the vast majority of the FEED work. These estimating exercises, however, still did not meet the Class II AACE +/-10% accuracy requirements, which was required of the Final Full Estimate.

393. The first estimate, which (at least, at face value) mentioned being Class II AACE +/-10% accuracy, was provided on July 31, 2009. CB&I and Technip completed the July 2009 Estimate, which came to USD 3.495 billion⁴²⁷, was labelled "Class 2 (+/-10%)"⁴²⁸, and covered the EPC Contract, without owner's costs, escalation and contingency⁴²⁹. CB&I presented the Estimate to Reficar on August 3, 2009⁴³⁰ together with a breakdown of the methodology behind the calculations⁴³¹ and a slip of the estimate on a unit-by-unit basis⁴³².

394. The July 2009 Estimate contains a blended productivity factor of 1.86 for greenfield work (the parts of the Project that were to be newly built), with brownfield work (modernization work done on already existing parts of the Refinery) being given 15% to 50% mark-ups⁴³³.

[The Parties now dispute whether this estimate actually met the required standards of a Class 2 with +/-10% accuracy. Reficar argues that the July 2009 Estimate was not and could not have met the requirements of an AACE Class 2+/10% estimate, while CB&I avers that the Estimate was in fact compliant with those requirements].

Review by Foster Wheeler and Cost Reduction Workshops

395. CB&I's July 2009 Estimate was too high for Reficar, who was looking for a significantly reduced cost. Reficar instructed Foster Wheeler to review CB&I's July

⁴²⁴ Ex. R-2994, pp. 31-40. ↩
⁴²⁵ Ex. R-3662, p. 85. ↩
⁴²⁶ Ex. C-0396, p. 4; R-0618.The Tribunal notes minor discrepancies between the two documents despite them being the same revision of the document but these discrepancies do not have an impact on the analysis. ↩
⁴²⁷ Ex. R-0524, p. 231. ↩
⁴²⁸ Exs. R-0033, p. 1; C-0748; C-0400, p. 2. ↩
⁴²⁹ Ex. R-0033, p. 6. ↩
⁴³⁰ Ex. R-0524. ↩
⁴³¹ Ex. R-0033. ↩
⁴³² Ex. R-0525. ↩
⁴³³ Ex. R-0033, para. 8.1 at p. 19. ↩

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2009 Estimate, which Foster Wheeler did on August 14, 2009, reducing CB&I's calculation by USD 0.25 billion to USD 3.229 billion⁴³⁴.

396. Furthermore, Reficar invited CB&I to participate in a series of Cost-Reduction Workshops ["CRWs”], with the aim of identifying potential changes to the scope, and other improvements that would reduce the cost, such as changes in the assumed productivity multipliers⁴³⁵. The Parties met on August 5, 2009, and in the meeting Reficar stated that it was looking at potential cost savings opportunities to "tighten the number" and "get the numbers down to a manageable level”⁴³⁶.

397. At one of the meetings, discussions arose as to possible reductions in the productivity multipliers (i.e., assuming an increased productivity of Colombian workers); CB&I, however, noted that this assumption was overly optimistic, and Foster Wheeler concurred that the productivity in Colombia was not very good⁴³⁷.

398. The CRWs continued through the rest of August and then September.

Synergy Changes

399. Additionally, upon Glencore's exit from the Project in May 2009, Ecopetrol began looking into other scope changes which would allow for an optimization of synergies with:

- Ecopetrol's other refinery in Colombia⁴³⁸, which was also undergoing major changes⁴³⁹, and

- A company owned by Ecopetrol, which was the main producer of polypropylene in Colombia⁴⁴⁰.

400. The potential synergies were finally narrowed down to the deferral or deletion of certain units (mostly gasoline-producing upgrades) and the expansion of others [the "Synergy Changes"; the Parties frequently refer to the main aspect of the Synergy Changes as "Case 1.3.7"]⁴⁴¹.

401. The Synergy Changes evolved between July 2009 and June 2010. The evolution, with a certain degree of simplification to avoid technical details, can be categorized as follows⁴⁴²:

- The base case from July 2009: low investment deferral scope⁴⁴³;

⁴³⁴ Ex. B-042, p. 29. ↩
⁴³⁵ Chinchilla CWS, paras. 16-23. ↩
⁴³⁶ Ex. C-0401, p. 1. ↩
⁴³⁷ Ex. R-0545, p. 2. ↩
⁴³⁸ Ex. C-0399, p. 2; Ex. R-0515, p. 14. ↩
⁴³⁹ Ex. C-0398, p. 3; Ex. C-0173, p. 2. ↩
⁴⁴⁰ Ex. R-0516, p. 189; Ex. R-0549, p. 12. ↩
⁴⁴¹ Ex. C-0399, p. 46; Ex. R-0518, p. 4; Ex. C-0398, p. 3. ↩
⁴⁴² WMC ER, paras. 447-459. ↩
⁴⁴³ Ex. B-041 does not mention the turboexpander, which implies that at that point it was supposed to be deleted. ↩

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- The October 2009 case: base case plus Maximum Propylene⁴⁴⁴;

- The January 2010 case: base case plus Maximum Propylene plus Full Burn FCC⁴⁴⁵; and

- The June 2010 case: base case plus Maximum Propylene plus Full Burn FCC plus FCC Power Recovery⁴⁴⁶.

July 2009 Estimate, Revision 1

402. On September 3, 2009, as a result of the CRWs, CB&I presented Revision 1 to the July 2009 Estimate, which identified USD 235 million in potential savings related to the CRWs⁴⁴⁷. The estimated EPC costs were now USD 2.899 billion⁴⁴⁸. But, upon further studies, on September 24, 2009 the estimate was lifted to a total EPC cost value of USD 2.989 billion⁴⁴⁹.

Budget approval by Reficar

403. Pro memoria: in October 2009, the BofDs of Ecopetrol and Reficar approved the budget for the EPC Contract in an amount of USD 3.777 billion, with USD 2.789 billion⁴⁵⁰ for EPC costs only (excluding Owner's costs, escalation, contingency and sunk costs). This fell USD 200 million short of the July 2009 Estimate, Revision 1 prepared by the contractor at the end of September 2009, with EPC costs at USD 2.989 billion⁴⁵¹.

404. There is no information in the file explaining how Reficar intended to achieve this necessary USD 200 million cost reduction.

D. The February 2010 Estimate

405. In the meantime, the final design of the Project was being developed. On December 15, 2009, CB&I finally reported that FEED was now 100% complete⁴⁵², permitting the preparation of the final estimate.

[However, further design changes were later introduced by Reficar to certain units on the Project as part of the ongoing Synergy Changes; meaning that the accuracy of estimations for those units would not be at possible at the agreed level.]

406. On February 28, 2010, CB&I produced its Revision 2 – Final Estimate Scope to the July 2009 Estimate⁴⁵³ [the "February 2010 Estimate"]⁴⁵⁴. This estimate was made,

⁴⁴⁴ WMC ER, paras. 453-456. ↩
⁴⁴⁵ WMC ER, para. 457. ↩
⁴⁴⁶ WMC ER, paras. 458-463. ↩
⁴⁴⁷ Ex. C-0032, p. 64. ↩
⁴⁴⁸ Ex. C-0032, p. 52. ↩
⁴⁴⁹ Ex. R-3444, p. 3, Houtz CWS, para. 122. ↩
⁴⁵⁰ Ex. R-1848, pp. 14, 17; Ex. R-3708, p. 10 in conjunction with Ex. R-1853_0054, p. 3. ↩
⁴⁵¹ Ex. R-3444, p. 3. ↩
⁴⁵² Ex. C-0009, p. 15 (Ex. R-0555). ↩
⁴⁵³ Ex. C-0041 (Ex. R-0546), p. 2. ↩
⁴⁵⁴ As a threshold matter, on the basis that the document is named "31 July 2009 Class [2] (+/-10%) Revision 2 – Final Estimate Scope February 28, 2010", the Tribunal shall refer to the document as the February ↩

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for the first time, without the participation of Technip. It forecast that the EPC Contract would cost USD 3.150 billion⁴⁵⁵, including escalation and contingency⁴⁵⁶ – this is a major difference from the previous estimates, which did not account for escalation or contingency costs.

407. The February 2010 Estimate constitutes a revision of the July 2009 Estimate, and incorporates the following changes⁴⁵⁷;

- late adds, deletes and changes, which were explicitly labelled as ROM or Rough Order of Magnitude

[According to the AACE Guidelines from 2005, Order of Magnitude estimates typically mean an accuracy range of -30/+50%⁴⁵⁸ although different ranges are acceptable; CB&I used a +/-50% range as ROM on the Project⁴⁵⁹.];

- reductions identified in the CRWs;

- modifications caused by the Synergy Changes⁴⁶⁰;

408. The Estimate states explicitly that it is based on the scope of work of the July 2009 Estimate and that it remained the same except for the changes listed above⁴⁶¹.

409. The February 2010 Estimate Revision uses a 1.66 productivity multiplier for a majority of the works to be performed in the greenfield area of the Project⁴⁶². The brownfield work was given a 15% to 50% mark-up to account for the interruptions⁴⁶³.

[Reficar argues that the February 2010 Estimate, increased by USD 115 million addition due to the Synergy Changes, was later incorporated into the EPC Agreement as the "Final Full Estimate", as Appendix IV to Section III⁴⁶⁴; however, CB&I disputes this and the Contract received by the Tribunal is empty in the section where the Final Full Estimate should be situated⁴⁶⁵.]

2010 Estimate taking into account that multiple documents in the record have revisions, and they are always referred to by the Parties under their original iteration's name.
⁴⁵⁵ Ex. C-0041, p. 50. ↩
⁴⁵⁶ Ex. C-0041, p. 9. ↩
⁴⁵⁷ Ex. C-0041, pp. 7-8. ↩
⁴⁵⁸ Ex. R-1985, pp. 4 [ANSI Standard Reference]. ↩
⁴⁵⁹ Tr. 2656:6-19. ↩
⁴⁶⁰ The scope was defined as "No NHT/CCR, Full FCC Scope less Turbo Expander, Install Butamer and Alkylation Units, No Benzout Unit, Associated reductions in utility and supports systems – No redesign"; see Ex. C-0041, p. 8. This implies that the Synergy Changes were incorporated as of their initial, July 2009 case. ↩
⁴⁶¹ Ex. C-0041, p. 8. ↩
⁴⁶² Ex. C-0041, p. 22. ↩
⁴⁶³ Ex. C-0041, pp. 22-23. ↩
⁴⁶⁴ JX-002, p. 165; JX-004, p. 151. This was also the nomenclature used when referring to the February 2010 Estimate during the Hearing. ↩
⁴⁶⁵ See JX-006; Appendix 3 ends at p. 609 and immediately after, at p. 610, Appendix 5 begins. ↩

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A cost reduction and a cost increase

410. On April 8, 2010, Reficar wrote to CB&I stating that the February 2010 Estimate resulted in total costs that exceeded the approved October 2009 budget by some USD 77 million:

- in accordance with the budget, the EPC Contract was expected to cost USD 2.789 billion, plus escalation of USD 117 million and contingency of USD 167 million (total USD 3.073 billion);

- while the February 2010 Estimate was USD 3.150 billion

and asked for an appropriate reduction⁴⁶⁶. CB&I responded on April 26, 2010, offering an explanation of the differences in numbers⁴⁶⁷.

411. Eventually Reficar's budget for the EPC Agreements was increased to USD 3.106 billion⁴⁶⁸, with the difference coming down from USD 76 million to USD 46 million.

412. But this was not the end of the story: over the months of March and April 2010, CB&I issued a number of Budget Revision Notices ["BRNs"] caused by Synergy Changes and certain other design changes, which modified the final design, and in turn increased the final estimate by USD 115 million to USD 3.221 billion⁴⁶⁹.

CB&I's confirmation

413. On April 30, 2010, Reficar again reached out to CB&I, with a number of questions about the February 2010 Estimate, including its accuracy and the productivity factor used⁴⁷⁰. In an email from May 5, 2010, CB&I:

- Confirmed that the accuracy level of the February 2010 Estimate was +/- 10%⁴⁷¹,

- Confirmed that it had included in the February 2010 Estimate the scope of work of the Synergy Changes "limited to the July 31^st 2009 basis with the deletion of the turbo expander"⁴⁷²,

- Affirmed that the productivity factor used in the July 2009 Estimate was accurate, but the reduction in the multiplier resulted from cost-savings exercises performed by Reficar, and this reduction led to craft productivity being identified as one of the

⁴⁶⁶ Ex. C-0042, p. 2. ↩
⁴⁶⁷ Ex. C-0031, p. 4. ↩
⁴⁶⁸ Ex. R-0605 p. 12. ↩
⁴⁶⁹ Ex. C-0043. ↩
⁴⁷⁰ Ex. C-0314, p. 3. ↩
⁴⁷¹ Ex. R-0027, p. 4 (Ex. C-315). ↩
⁴⁷² Ex. R-0027, p. 2. ↩

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"largest risk areas associated with the cost reduction efforts and was based on feedback from Reficar / ECOPETROL's work history is the most optimistic outcome in regards to productivity"⁴⁷³ [Emphasis added].

[Reficar argues that the February 2010 Estimate did not meet the AACE Class 2 +/-10% requirements and CB&I agrees, but avers that the Estimate was never represented as compliant with such requirements.]

6. CBI'S WORK SCHEDULE

414. Cost estimates and work schedule were the two main issues discussed before the signature of the EPC Contract. So far, this Award has focused on cost estimates but will now turn to the work schedule.

415. The detail and accuracy of a work schedule is measured against standards and definitions provided, again, by the AACE, which are categorised by levels.

Level 3

416. A Level 3 Schedule represents individual work tasks, which summarize project activities and deliverables with enough detail to manage work at the foreman level⁴⁷⁴. A Level 3 Schedule was intended to be resource-loaded, i.e., linked to the data underlying the Final Full Estimate for the Project⁴⁷⁵.

417. Reficar made it clear to CB&I from as early as the Project Definition Contract of 2007 that a Level 3 Resource Loaded Schedule would be key to Reficar's decision on proceeding with the final EPC agreement: the Project Execution Plan mentioned a "Level 3 Resource Loaded Schedule"⁴⁷⁶ and a Level 3 Schedule was also part of the Tender Deliverables⁴⁷⁷.

418. CB&I accepted this requirement and on April 22, 2008, when it issued an Execution Plan for Basic Engineering and Definition Phase, it stated that it would provide a Level 3 Schedule during the Basic Engineering Phase as part of the EPC Execution Plan⁴⁷⁸.

419. The importance of the Level 3 Resource Loaded Schedule was reiterated in the final version of the Execution Masterplan issued by CB&I, which mentioned that⁴⁷⁹:

"The CBI/ Technip and KBR schedulers will prepare a Level 3 CPM schedule for Reimbursable Phase Engineering of the Project, with the full participation and buy-in of all internal projects. CBI will be responsible to

⁴⁷³ Ex. R-0027, p. 5 (Ex. C-0315). ↩
⁴⁷⁴ Ex. C-0384 at p. 62 (source p. 61). ↩
⁴⁷⁵ See e.g. Dr. Warhoe's explanation at Tr. 4759:11-17: "And then, taking the resources, the manpower and the quantities, and inserting those in the schedule to resource load, what's referred to as resource loading the schedule, which would show all parties what the planning was in terms of manpower from week to week, month to month, and also quantities; see also Mr. Deidehban's agreement with such definition at Tr. 923:1-7. ↩
⁴⁷⁶ Ex. R-0010, Schedule 3, para. 4.0 C.1, p. 89. ↩
⁴⁷⁷ Ex. R-0010, Schedule 3, para. 5.0 B.1, p. 89. ↩
⁴⁷⁸ Ex. C-0391, p. 14. ↩
⁴⁷⁹ Ex. C-0024, p. 115. ↩