INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES
AMEC FOSTER WHEELER USA CORPORATION (USA),
PROCESS CONSULTANTS, INC. (USA), AND
JOINT VENTURE FOSTER WHEELER USA CORPORATION AND PROCESS CONSULTANTS, INC.
(USA)
Claimants
v.
THE REPUBLIC OF COLOMBIA
Respondent
ICSID Case No. ARB/19/34
September 2, 2021
[Page i]
[Page 1]
1. Claimants Amec Foster Wheeler USA Corporation (“AFWUSA”) and Process
Consultants, Inc. (“PCI”), separately and as members of a contractual joint venture named FPJVC
(collectively, “FPJVC” or “Claimants”), submit this urgent Application for Provisional Measures
and Emergency Temporary Relief (the “Application”) pursuant to Article 47 of the Convention on
Settlement of Investment Disputes (the “ICSID Convention”) and Rule 39(1) of the Rules of
Procedure for Arbitration Proceedings (the “ICSID Rules”).
2. This Application seeks an order enjoining Respondent Colombia from enforcing, either
locally or abroad, the decision of a Colombian administrative agency called the Contraloría
General de la República of Colombia (the “CGR”) imposing damages of US$811 million¹ against
FPJVC on April 26, 2021, in Auto 749 (the “CGR Decision”). As set forth below, the CGR
Decision was appealed by FPJVC and subsequently internally affirmed by the CGR’s appellate
division on July 6, 2021. The CGR Decision is the result of a proceeding that was improperly
initiated by the CGR against FPJVC – without a colorable claim of jurisdiction – in a transparent
attempt to shift blame for alleged acts of mismanagement from those who actually managed a
project involving the modernization and expansion of a State-owned oil refinery located in
Cartagena, Colombia (the “Project”). In fact, the Project was actually managed by the Colombian
State-owned enterprise that owned and operated the refinery, Refinería de Cartagena, S.A.S.
("Reficar"). This fiscal liability proceeding was, as described in FPJVC's Request for Arbitration
and in this Application, conducted in a flawed and highly partial manner, and in violation of the
most basic norms of due process, that stripped FPJVC of its rights under Chapter 10 the United
States-Colombia Trade Promotion Agreement (the “TPA” or “Treaty”), including the right to fair
and equitable treatment.²
¹ The CGR found that Claimants, along with others, were jointly and severally liable for $1,329 billion Colombian
Pesos as a result of Reficar’s approval of a change order known as Change Control 2, and $1,615 billion Colombian
Pesos as a result of the approval of Change Control 3.
² Agreement Between the Government of the United States and the Government of the Republic of Colombia Trade
Promotion Agreement, signed Nov. 22, 2006, Chapter 10. The TPA entered into force on May 15, 2012 (CL-001).
[Page 2]
3. The CGR Decision adopts some of the unwarranted and baseless theories asserted from
the outset of the proceeding, while also imposing liability based on newly advanced, but equally
faulty theories that FPJVC was never afforded a realistic, or in significant instances, any,
opportunity to address. The CGR has jurisdiction over matters of “fiscal liability" – that is, damage
to the “national patrimony”, but only from acts of gross negligence or international misconduct by
those with decision-making authority over the expenditure of State funds and assets. As discussed
below, the CGR Decision, on its face, plainly deprives FPJVC of its bargained-for contractual
protections and its rights under the Treaty in numerous ways, including:
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CGR proceeding, and (5) the budget increases were comprised of estimated cost
increases, not the actual costs incurred for the cost items; and
4. As described in detail below, FPJVC’s role, as expressly directed by Reficar, the actual
project manager, was limited to consultation, assistance, and providing a limited number of
personnel to work as secondees on Reficar’s team.
5. Once the CGR Decision was rendered, FPJVC appealed the ruling directly to the Sala
Fiscal Sancionatoria, the Fiscal Sanctionable Section of the CGR (the "FSS") that hears internal
appeals. Though FPJVC’s appeal to the FSS temporarily suspended commencement of
enforcement proceedings against FPJVC, the CGR granted FPJVC a mere five days to file its
appeal and rejected FPJVC’s request for additional time.³ The CGR Decision is over 6,200 pages
in length, and the record covers over four years of proceedings. Moreover, the CGR Decision, as
rendered, is based, in significant part, on legal theories and damage methodologies different from
those advanced by the CGR throughout the case, and previously undisclosed to FPJVC. The result
was that FPJVC was required to review and analyze over 6,000 pages of the CGR’s findings based
largely on its new theories, and file its appeal in less than two weeks. Then, less than two months
after receiving FPJVC’s appeal, the CGR issued its second instance decision, this time 2,161 pages
in length, formally rejecting FPJVC’s appeal and affirming the CGR Decision in its entirety by
issuance of Auto – ORD-801119-158-021, dated July 6, 2021. In denying the appeal, the CGR
simply adopted Auto 749’s unsubstantiated findings.
6. Following the rejection of FPJVC’s appeal, the CGR transferred the CGR Decision and
its file to the Colombian Council of State for review on July 16, 2021, pursuant to the "automatic
legality control" procedures established by Law 2080 of 2021, which was enacted only earlier this
³ FPJVC requested a 90-day extension of its filing deadline, noting that only having five days to respond was a gross
violation of FPJVC’s due process rights. The Deputy Controller denied FPJVC’s extension request in its entirety.
FPJVC eventually obtained a mere seven additional days to file its appeal because of an administrative error by the
CGR when it failed to serve complete copies of the CGR Decision on the parties.
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year. This newly minted review process was designed to have the Council of State evaluate
whether the CGR Decision complies with Colombian law, and while doing so, any collection
efforts are postponed until that proceeding has been concluded.
7. However, the Council of State recently refused to follow the automatic legality control
procedures involving another unrelated CGR proceeding, stating that Law 2080 of 2021 might be
unconstitutional. Nonetheless, Colombia took the position, in their Memorial on Preliminary
Objections, that it would continue to honor the automatic stay provided to FPJVC by Law 2080
unless and until the Council of State ruled, in FPJVC’s case, either that Law 2080 was
unconstitutional or ruled on the merits adversely to FPJVC.⁴ It is FPJVC’s understanding that as
a result of the Council of State’s rejection, the stay of Colombia’s enforcement efforts was
automatically lifted, and it may resume such efforts immediately.
8. On August 24, 2021, counsel for FPJVC wrote to counsel for Colombia, asking them
to agree to either: (1) a stay of enforcement pending the resolution of this arbitration; (2) a
temporary stay of enforcement while FPJVC’s Application for pendente lite relief was heard, in
order to allow this Application to be heard and decided in an orderly manner; or (3), at a minimum,
a stay of enforcement until FPJVC could present its Application for the interim stay described in
paragraph 8(b) above.
9. The following day, counsel for Colombia stated that they would consult with their
client and revert. Not having heard a response by August 31, 2021, counsel for FPJVC wrote and
requested a response by September 3, 2021. On September 1, 2021, counsel for Colombia sent a
brief response refusing to agree to any stay at all, stating that “Colombia can only represent and
provide assurances that it will continue to comply with its Constitution and laws, and that each of
its organs will continue to act within the bounds of their competence." While that does not explain
in any way why Colombia would not, or could not, agree to a stay, it appears clear that Colombia
intends to begin immediate steps to enforce the CGR Decision. On the same day, the Council of
State issued an order stating that it would refrain from carrying out its review proceedings under
Law 2080 of 2021, based on its conclusion that Law 2080 was unconstitutional. FPJVC
understands that the CGR Decision is now considered final and immediately enforceable under
⁴ See Colombia’s Memorial on Preliminary Objections at § D(4)(e), including footnote 226.
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Colombian law.⁵ If enforced before FPJVC can be heard in this arbitration, the CGR Decision
will bring FPJVC’s business to an abrupt end.⁶
10. Unless enforcement of the CGR Decision is enjoined, it will aggravate the status quo
and effectively end FPJVC’s entire business. The risk of irreparable harm is both imminent and
urgent. Accordingly, Claimants ask for: (1) an order for provisional measures preventing
Colombia from initiating any enforcement proceedings with respect to the disputed CGR Decision
until the Tribunal has issued its final award on the merits; and (2) an order of emergency temporary
relief restraining Colombia from initiating any enforcement proceedings with respect to the
disputed CGR Decision until the Tribunal renders a decision on this Application.
11. As discussed in detail below, the requirements for granting provisional measures in
ICSID arbitration are met here because: (1) the Tribunal has prima facie jurisdiction over this
dispute; (2) FPJVC has established a prima facie right to the relief sought; (3) the measures are
necessary because the harm cannot adequately be avoided by a later award of damages; (4) the
matter is urgent because the threatened harm will likely occur long before the arbitral proceeding
is concluded; and (5) the measures are proportional. For these reasons, as set forth in detail below,
FPJVC requests that the Tribunal grant this Application in its entirety and award FPJVC any and
all necessary relief to preserve the integrity of these proceedings until this matter has reached its
conclusion.
12. In 2009, Reficar, a Colombian State-owned enterprise, entered into a reimbursable cost
contract with FPJVC to provide certain project management services in connection with the
refurbishment of an oil refinery owned by the Republic (the "Contract").⁷
13. In 2010, in order to reduce costs and accommodate the demand of the engineering,
procurement and construction ("EPC") contractor, CB&I,⁸ on the Project, Reficar directed a major
⁵ CWS-1, Cesar Torrente, ¶ 11.
⁶ CWS-2, Steve Conway, ¶ 12; CWS-3, Thomas Grell, ¶ 12.
⁷ The Contract contained various critical safeguards for FPJVC, including [Redacted]
⁸ Unless otherwise noted, "CB&I" collectively refers to Chicago Bridge & Iron Americas LTD, Chicago Bridge &
Iron Company UK Limited, CBI Colombiana, S.A., all of whom were parties to the EPC contract with Reficar.
[Page 6]
and material change in the scope of FPJVC’s work, as the Contract permitted it to do. That change
– documented in correspondence, meeting minutes and a detailed Project evaluation commissioned
by Reficar’s own parent company, Ecopetrol, S.A. (“Ecopetrol") – resulted in all project
management responsibility being retained by Reficar itself, and instead, FPJVC’s scope of work
as directed by Reficar was limited to providing Reficar with support and recommendations.
FPJVC never had the authority to direct the EPC contractor’s work or control the EPC contractor’s
expenditures. Through the completion of the Project in 2016, FPJVC acted in accordance with
that narrowed scope of work without objection or other direction from Reficar.
14. On March 10, 2017, the CGR issued Auto 382 (the “Opening Resolution”),
commencing administrative proceedings and an investigation against various entities and
individuals, including FPJVC, CB&I, the Ecopetrol Board of Directors, and various officers and
directors of Reficar, for alleged acts of gross negligence or willful misconduct in the expenditure
of the Republic’s funds in connection with the Project. On June 5, 2018, the CGR issued Auto
773 asserting charges comprising over 4,700 pages (the “CGR Charge”) alleging, in effect, that:
(1) FPJVC was bound by the original text of the Contract with Reficar to manage the Project,
without regard to Reficar’s express direction that it would solely manage the Project; (2) FPJVC
breached the Contract by “inadequate management of and deficient support to the auditing,
supervision, and control activities related to the execution of the [P]roject”⁹ and somehow not
preventing increases in project costs and alleged execution delays; (3) FPJVC was, therefore,
grossly negligent (the minimum standard for imposing fiscal liability under Colombian law) in
managing State funds, even though FPJVC had no authority over such expenditures and the
conduct alleged amounted, even on the face of the CGR Charge, at most to a breach of contract;
and (4) FPJVC should be held jointly and severally liable for more than USD$2.433 billion of
alleged project cost overruns, even though the Republic, acting through Reficar, promised at the
time of the investment that [Redacted]
15. Although 4,751 pages in length, the CGR Charge failed to (1) adduce any proof that
FPJVC was a “fiscal manager” or had any “decision-making authority”, (2) describe or document
⁹ CGR Charge at 3579-80, 3715 (C-001).
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any wrongful actions or omissions by FPJVC, let alone acts constituting gross negligence, or (3)
causally link any of FPJVC’s conduct to any alleged losses, each of which is required under
Colombian law. In that regard, the CGR’s jurisdiction to bring fiscal liability proceedings against
public officials or private parties is limited to those who have decision-making power over State
funds and exercise such authority in a grossly negligent manner, but the CGR Charge did not
include any specific allegations that FPJVC exercised such authority. In the same charging
document, the CGR inexplicably elected not to proceed against the Board of Directors of Ecopetrol
by finding that they lacked exclusive decision-making authority over the expenditure of funds on
the Project, and that definitive decision-making authority was vested in Reficar. The CGR not
only refused to apply that same legal standard to FPJVC, a foreign investor, it never specified what
FPJVC had supposedly done that would result in any liability, let alone the specific conduct that
would subject FPJVC to the CGR’s jurisdiction.
16. Also absent from the CGR Charge was any rationale supporting the CGR’s alleged
"damages" against FPJVC. The CGR’s methodology, in essence, sought to hold FPJVC strictly
liable for various budget increases above the original project estimate or “Base Line” projections
provided by EPC Contractor CB&I, and not FPJVC, without regard to: (1) which party, if any, had
caused these budget increases, (2) the fact that the scope of the Project was consistently expanded
by Reficar, resulting in many of those increases, (3) whether FPJVC was responsible for any of
those increases, and (4) whether CB&I’s Base Line projections were even accurate in the first
place.¹⁰ The CGR also sought to impose this budgetary increase liability on FPJVC, even though
the Contract was for consulting services only, not for the actual engineering, procurement and
construction of the Project. In sum, the CGR sought to recoup allegedly excessive Project costs
from FPJVC, an entity that never had any decision-making authority or management over the
Project.
17. On April 26, 2021, the CGR issued the CGR Decision that blamed FPJVC for the
budget increases and found it liable, jointly and severally with all other defendants, for US$811
million in damages.
¹⁰ CWS-4, Colin Johnson, ¶¶ 34-42.
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18. Like the CGR Charge, the CGR Decision does not present any evidence of the various
elements of fiscal liability required to establish the CGR’s jurisdiction over FPJVC, let alone hold
FPJVC responsible for any of the State’s purported damages. The CGR also failed to consider (or
blatantly ignored) exculpatory evidence and arguments offered by FPJVC, including findings from
an internal investigation conducted by an independent agency of the Colombian government, the
Procuraduría General de la Nación (the “PGN”), that determined the Project’s alleged cost
overruns and schedule delays could not be attributed to FPJVC. In fact, to justify its charges
against FPJVC, the CGR relied on an alternate legal theory against FPJVC under a law passed in
2020, which removes the decision-making authority requirement; although the CGR Decision does
not cite that statute, it sets out its terms in haec verba. Deviating from the “supervision and control”
and “inefficient management” theories alleged in the CGR Charge, which at least tracked the law
in effect at the time of the Contract and the CGR Charge, the CGR held FPJVC liable based upon
its alleged actions as a “contributor” or consultant because FPJVC “prepared the scenarios and
deliverables that were taken into consideration . . . by the members of the Reficar’s board of
directors to make the decision to approve the increased investments in each change control.”¹¹
19. By categorizing FPJVC as a “contributor” the CGR’s new theory effectively concedes
that FPJVC never had actual decision-making power over the Project’s funds – meaning that the
CGR never had jurisdiction over FPJVC in the first place. Not only was this alternate legal theory
never asserted against FPJVC in the underlying CGR Charge, it is based on the retroactive
application of a Colombian statute passed only last year, apparently in response to the position
taken in the CGR proceeding by FPJVC in defending itself.
20. The CGR Decision also relies on a fatally flawed damage theory advanced at the outset
of the CGR proceedings that treats budget increases and claimed schedule delays (based on a set
of initial and flawed estimates – the "Base Line" projections) as damages. Relying on that
methodology, the CGR seeks to hold FPJVC and others strictly liable for these alleged damages
without undertaking any causal – or, for that matter, any analysis.¹² At the same time, the CGR
materially changed its calculation to compute FPJVC’s liability (i.e., US$811 million in damages).
As highlighted by FPJVC’s damages experts, the calculations applied by the CGR in its various
¹¹ The CGR Decision at 5190 (C-002). That conclusion is itself false.
¹² CWS-4, Colin Johnson, ¶¶ 47-53.
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allegations and technical reports followed no acceptable theory of damages and make no sense.¹³
By way of example only, the CGR held FPJVC liable for alleged damages associated with Change
Controls 2 and 3. These “damages” are alleged estimates of additional costs that resulted from
expansion of the scope of the Project, were approved by Reficar itself, and resulted in a larger and
more capable refinery. The CGR perversely used these additional costs as elements of the damages
imposed on FPJVC, based on the net present value of those authorized capital expenditures.
21. On May 7, 2021, FPJVC did the best that it could to file its appeal directly to the CGR
(the "Appeal”). The urgency was necessitated by the impossible five-day deadline imposed on
FPJVC to respond to the voluminous 6,243-page CGR Decision and the CGR’s refusal to grant
FPJVC’s extension request, once again depriving FPJVC of any right to defend itself. The Appeal
only temporarily suspended the enforcement of the CGR Decision. Now that the CGR Decision
is final, it has immediate effect under Colombian law and may be enforced at any time.¹⁴
22. The relief sought in this Application is necessary because FPJVC has no viable local
substantive options in Colombia now that the Appeal has concluded.¹⁵ In other words, Colombia
is free to attempt to enforce the CGR Decision, the subject of the very claims that Claimants bring
in this arbitration.
23. Absent provisional relief, Colombia’s enforcement of the CGR Decision will cause
immediate and irreparable harm to FPJVC. Colombia’s enforcement proceedings against FPJVC
in multiple jurisdictions will strain the integrity of the ICSID arbitration and aggravate the status
quo. [Redacted]
24. In ICSID arbitrations, preventing such enforcement through provisional relief requires
a showing that: (1) the tribunal has prima facie jurisdiction; (2) a prima facie establishment of the
right to the relief sought; (3) the measures are necessary because the harm cannot adequately be
¹³ Id. at ¶¶ 60-63.
¹⁴ CWS-1, Cesar Torrente at ¶¶ 11, 12. As discussed by Mr. Torrente, though FPJVC could request a provisional stay
of enforcement, these are seldomly granted, and the mere filing of the requested relief would not prevent
enforcement of the CGR Decision while the request is pending unless FPJVC posted a bond in an amount that was
sufficient to cover the payment of the integral value of the damage estimated in the CGR Decision, or 1.5 times the
amount of the CGR Decision, depending on which Colombian law is applied. Accordingly, as Mr. Torrente
concludes, this is not a legitimate option for Claimants. Id. at ¶¶ 21, 22.
¹⁵ Id. at ¶¶ 13, 14, 22.
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avoided by an award of damages; (4) the matter is urgent because the threatened harm will likely
occur before the arbitration concluded; and (5) the measures are proportional. Claimants satisfy
each element.
25. First, this Tribunal has prima facie jurisdiction. Under the TPA, Colombia agreed to
arbitrate investment disputes with U.S. companies, such as FPJVC, involving their investors and
investments in Colombia. The dispute before this Tribunal concerns claims for breaches of the
TPA with respect to FPJVC as an investor and its investment in Colombia. Colombia’s consent
and offer to arbitrate disputes in the TPA and FPJVC’s acceptance of that offer through its
submission to ICSID result in this arbitration and, as such, this Tribunal has prima facie
jurisdiction to hear this dispute.
26. Second, Claimants have established their prima facie right to relief sought. ICSID
tribunals have the authority to award provisional measures to protect the parties’ rights, to preserve
the status quo, and the non-aggravation of the dispute while also guaranteeing the right to an
exclusive award for the dispute to the exclusion of any other remedy whether domestic or
international, judicial, or administrative.
27. Third, provisional measures are necessary because, without them, Claimants will suffer
irreparable harm. If Colombia is permitted to pursue enforcement proceedings against Claimants,
Claimants’ businesses will end, and the Tribunal will be incapable of restoring the status quo and
preserving Claimants’ business through an award at the conclusion of the arbitration.¹⁶ An
offsetting award of damages by this Tribunal will be too little and too late.
28. Fourth, provisional measures are urgent because the threatened harm will occur long
before this arbitration concludes. Under Colombian law, the resolution of the Appeal means that
CGR Decision is immediately and fully enforceable. Colombia has refused to stay enforcement of
the CGR Decision against FPJVC, even, on September 1, 2021, refusing FPJVC’s request for a
stay of enforcement proceedings for sufficient time to allow this Application to be heard in an
orderly way,¹⁷ and has laid the groundwork for enforcement by formally requesting national and
¹⁶ CWS-2, Steve Conway at ¶ 12; CWS-3, Thomas Grell at ¶ 12.
¹⁷ See the August 24, 2021, Letter from Claimants’ Counsel to Respondent’s Counsel Requesting a Stay of
Enforcement Proceedings, the August 31, 2021, Letter from Claimants’ Counsel to Respondent’s Counsel
Requesting a Stay of Enforcement Proceedings, and the September 1, 2021, Letter to Claimants’ Counsel from
Respondent’s Counsel Regarding Stay of Enforcement (C-003).
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international cooperation from the relevant authorities in the U.S., the United Kingdom, and the
Netherlands through the issuance of a document known as Auto 1356.¹⁸ Because Colombia has
already taken steps to enforce the CGR Decision and is unwilling to agree not to seek enforcement
action against FPJVC, the harm will likely occur even before this Tribunal rules on this Application.
It is for this reason that Claimants also seek emergency temporary provisional measures as set
forth herein.
29. Finally, the provisional measures sought are proportional. Colombia will not be
prejudiced if the provisional measures are granted because, even if Colombia were ultimately to
prevail on the merits, the worst-case scenario for Colombia is that it would suffer some delay in
enforcing the CGR Decision. On the other hand, if the provisional measures are denied and
Colombia proceeds to enforce the CGR Decision, a subsequent successful award on the merits will
be meaningless for FPJVC because it will have been shut down and likely dissolved for long before
the award.
30. Accordingly, Claimants respectfully request that this Tribunal issue an interim award
that instructs Colombia to refrain from enforcing the CGR Decision until this arbitration has
concluded to preserve the status quo and prevent the aggravation of this dispute, to ensure the
parties’ right to an exclusive remedy and to otherwise preserve the integrity of these proceedings.
Claimants also respectfully request that this Tribunal award emergency temporary relief
restraining Colombia from initiating [and/or continuing] any enforcement proceedings until the
Tribunal has rendered a decision on this Application.
31. The CGR proceedings were conducted in a partial and discriminatory manner that
constitute a denial of justice and violated FPJVC’s right to fair and equitable treatment; charges
against various Colombian officials were dismissed on grounds that the CGR refused to apply to
FPJVC; exculpatory evidence that benefited FPJVC went ignored; and Colombian law was
disregarded or misapplied to reach what seems like a foregone conclusion that FPJVC was a “fiscal
¹⁸ See Auto 1356 at 2 (C-004); see also CWS-1, Cesar Torrente at ¶ 11, n.7.
¹⁹ FPJVC submitted a detailed description of the factual background of this arbitration in its Request for Arbitration.
Since that time, new events, discussed here, have transpired which are relevant to the Application and arbitration.
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manager", through gross negligence, of the misuse of public funds.²⁰ Indeed, the CGR never had
jurisdiction over FPJVC in the first place. Simply put, the proceedings and the resultant US$811
million decision against FPJVC violate FPJVC’s most basic rights, including its right to due
process and rights under the TPA as an investor.
32. The underlying dispute arose from the Contract between FPJVC and Reficar for the
provision of services in connection with the Project.²¹ Reficar is wholly owned by Ecopetrol,
which, in turn, is approximately 88% owned by Respondent. Respondent has, and at all relevant
times had total control over both Reficar and Ecopetrol.²²
33. [Redacted]
(a) [Redacted]²³
(b) [Redacted]²⁴ and
(c) [Redacted]²⁵
34. Relying on those contractual safeguards, and the expectation of even-handed, fair and
just treatment by Colombia, FPJVC decided to invest in Colombia and executed the Contract.
²⁰ [Redacted]
²¹ Contract, without Appendices 1-7 and 9-29 (C-005).
²² As explained in the Request for Arbitration, Respondent appoints the majority of Ecopetrol’s board of directors,
and, through the board, Ecopetrol’s chief executive officer, as well as the entire Board of Directors of Reficar.
²³ Contract, § 27 (C-005).
²⁴ Id. at § 10.
²⁵ Id.
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35. The initial terms of the Contract contemplated that FPJVC would have project
management responsibilities over the Project, if Reficar chose to delegate such responsibilities.
Shortly after the Contract was executed, however, Reficar radically modified the contemplated
scope of work by informing FPJVC that it would not have any authority over the Project’s
management. Reficar, instead, made itself as the lone decision-making authority over the entire
Project and gave itself sole responsibility for managing the Project and its contractors. From the
outset of the Project, FPJVC’s responsibilities were reduced to consulting with Reficar’s
management and to seconding personnel to work as part of the Reficar Project Management Team
(“PMT”). This role never afforded FPJVC the capacity to manage CB&I and make the decisions
upon which the CGR would later base its jurisdiction, allegations, and liability findings against
FPJVC in the CGR Charge and Decision.
36. The Contract expressly permitted Reficar to change the scope of FPJVC’s work in this
manner. Indeed, at the time that Reficar did so, FPJVC requested that the parties execute a formal
amendment to the Contract. Reficar declined in writing to do so, assuring FPJVC that such a
formal amendment was unnecessary, referencing Section 23 of the Contract that provides:
REFICAR shall have the right to request, and subsequently to order,
FPJVC during the execution of the Services to make any change,
modification, addition or elimination to, in or of the Services
(hereinafter so called the “Change”), provided that said Change is
within the general scope of the Services, does not constitute
unrelated services and are technically practicable, taking into
consideration the status of progress of the Services and the technical
compatibility of the Change envisaged with the nature of the
Services, according to that specified in this OFFER.²⁶
37. Unlike FPJVC, CB&I was heavily involved on the Project as the EPC contractor, as
well as Ecopetrol and its Board of Directors. Ecopetrol and its Board of Directors worked with
Reficar to make decisions about the Project and to approve the large increases in the Project’s
capital expenditures, reflected in various “Change Controls”, that later formed the basis for the
CGR’s calculation of damages.
²⁶ Id. at § 23 (emphasis added) (C-005).
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38. It has been claimed that the Project experienced substantial cost overruns and delays
compared to Reficar’s original project budget, which purportedly relied upon CB&I’s original
estimate and schedule for the engineering, procurement and construction phases of the Project. As
noted above, the EPC Contract was not for a fixed price, but was a fully reimbursable agreement
to be paid on a time and materials basis. In fact, the EPC Contract was originally intended to be a
lump-sum contract, but Reficar switched it to a reimbursable contract so that it could actively
manage the Project and its costs. In that regard, Reficar also originally contemplated that FPJVC
would be identified as its Project Management Consultant (“PMC”) in the EPC Contract with
CB&I, but this too was changed. Reficar decided to not name FPJVC as its PMC, but instead,
Reficar maintained all management and control over the Project, including control over CB&I, the
EPC Contractor. Additionally, Ecopetrol, the corporate parent of Reficar, retained a well-known
construction consultant, Jacobs Consultancy ("Jacobs"),²⁷ to independently investigate and issue
reports tracking the progress of the Project, including identifying any delays or cost overruns and
the reasons for them. Toward the end of the Project, at Ecopetrol’s request, Jacobs issued its
October 2015 Report (the “Jacobs Report") to Ecopetrol, which concluded unequivocally that
FPJVC was not to blame for the Project delays and cost increases, emphasizing that Reficar made
all major decisions regarding the Project and that FPJVC’s “staff was placed only in positions of
support, with inexperienced personnel of REFICAR in positions of direct control.”²⁸ The Jacobs
Report found that Reficar had elected to assume responsibility for management, budget, and
administrative costs and expenses from the Project. The Jacobs Report has never been challenged
by the CGR. To the contrary, its findings were later confirmed by the PGN, the Inspector General
of Colombia.²⁹
²⁷ Jacobs is a well-known technical professional services firm that provides technical, professional, and construction
services, as well as scientific and specialty consulting services. Jacobs is a direct competitor of AFWUSA. Notably,
the Jacobs report was relied on by the PGN, which investigated the project for possible violations of Colombian
law, and concluded that FPJVC had acted in accordance with its mandate.
²⁸ The Jacobs Report at 8 (C-006).
²⁹ See supra, Section II(E)
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39. On March 29, 2016, the CGR ordered an Indagación Preliminar (“Initial Investigation")
in connection with the Project. The Initial Investigation was meant to evaluate the Project and the
parties involved in the Project, including Reficar, CB&I, FPJVC, and others.³⁰
40. Despite the lack of evidence of any fault on the part of FPJVC (as the Jacobs Report
had previously found in 2015), let alone the requisite authority or gross negligence on the part of
FPJVC, on March 10, 2017, the CGR issued the Opening Resolution to initiate the investigation
of FPJVC, CB&I, the Ecopetrol Board of Directors, and Reficar’s directors and six of its officers,
as well as others, for alleged acts and/or omissions in the expenditure of Colombia’s funds in
connection with the Project.
41. On February 8, 2018, AFWUSA and PCI separately submitted an exposición libre y
espontánea pursuant to the applicable Colombian law that governed the CGR proceedings, i.e.,
Law 610 of 2000 (“Law 610”).³¹ In that submission, AFWUSA and PCI described the structure
of FPJVC and its members, the Contract and the performance of the same, the existence of the
project management team, and described Reficar’s change in scope of the Contract, and further
explained FPJVC’s lack of decision-making authority on the Project.
42. Nevertheless, on June 5, 2018, the CGR issued the charging document known as Auto
773 (i.e., the CGR Charge), which asserted that FPJVC, CB&I, and several officers and members
of the Board of Directors of Reficar and Ecopetrol were jointly liable for the alleged economic
damages suffered by Colombia in the form of lost profits for approximately US$1.93 billion dollars
and wasted costs for approximately US$2.43 billion.³² These proceedings were improperly
brought against FPJVC for a number of reasons.
³⁰ Notably, the CGR, in keeping with its statutory mandate, conducted annual audits of the Project. It never criticized
FPJVC’s work on the Project in the course of any of those audits, let alone claim that FPJVC had a duty to supervise
and control the work, although it must have reviewed the Contract in order to be able to perform them.
³¹ Specifically, Article 42 of Law 610 discusses these pleadings and says: "[any person] who has knowledge of the
existence of an Initial Investigation or of the fiscal liability proceeding [against such person] and before there is a
formal charge [against that person], he/she may request to the corresponding official to take a declaration, and in
which it can appoint an attorney-in-fact to represent him/her during the proceeding. . .” (CL-002).
³² The CGR ordered that the lost profits portion of the fiscal liability proceeding be conducted in a separate fiscal
liability proceeding with the file number PRF-2017-00309_UCC-PRF-005-2017.
[Page 16]
43. First, under Law 610, only “fiscal managers,” defined as “those who have decision-
making power over State resources or public funds under their control,”³³ may be subject to fiscal
liability proceedings, and only when, through fraudulent or grossly negligent conduct with respect
to public funds, such “fiscal managers” cause economic harm to the Colombian State.³⁴ FPJVC
does not fall within this definition of “fiscal manager” because it had no decision-making authority
with respect to the Project’s expenditures.
44. The Colombian Constitution also expressly limits the CGR’s jurisdiction to the
supervision of “fiscal management of the State":
Fiscal control is a public duty exercised by the Comptroller General
of the Republic, which supervises the fiscal management of the
administration and private individuals or entities that manage the
Nation's funds or assets.
Such control shall be exercised in a subsequent and selective manner
in accordance with the procedures, systems, and principles
established by law.
The supervision of the fiscal management of the State includes the
exercise of financial control, management and results, based on
efficiency, economy, equity and the valuation of environmental
costs. In exceptional cases, provided by law, the Comptroller may
exercise subsequent control over the accounts of any territorial
entity.
The Comptroller is a technical entity with administrative and
budgetary autonomy. It shall not have any other duties than the ones
related to its own organization . ...³⁵
45. Nevertheless, the CGR Charge alleged that FPJVC was a “fiscal manager.” The CGR
Charge, however, failed to plead the elements required to show that FPJVC was a “fiscal manager”
under Law 610, did not include any specific allegations related to fraudulent or grossly negligent
conduct, and failed to articulate how FPJVC’s conduct caused the alleged harm. Instead, the CGR
asserted purely conclusory allegations inferring wrongful conduct and causation based upon the
fact that the Project was more costly than anticipated and experienced delays, essentially seeking
³³ Constitutional Court, Judgment C-832 of 2002 (CL-003).
³⁴ Article 5 of Law 610 states that the first element of fiscal liability is fraudulent or negligent conduct. (CL-002).
Colombian courts, however, have conclusively interpreted the statute to mean fraudulent or grossly negligent
conduct. See, e.g., Constitutional Court, Judgment C-338 of 2014 (CL-003).
³⁵ Constitución Política de Colombia, Art. 267 (CL-004).
[Page 17]
to impose strict liability upon FPJVC for all cost increases.³⁶ The CGR also did not identify
specific economic damage to the State,³⁷ maintaining instead that Project budget increases that
Reficar and Ecopetrol approved constituted such damage.³⁸
46. The CGR Charge relies on the fact that the Contract was never formally amended to
change FPJVC’s scope of work. As noted above, the scope of work was changed in accordance
with the Contract itself, is fully documented, and neither Reficar, nor any other Colombian entity,
complained that FPJVC was in any way failing to carry out its duties and responsibilities.
47. In short, therefore, even assuming that the CGR’s theory that, despite the express
language of the Contract, Reficar somehow lacked authority to modify the scope of FPJVC’s work,
is true, its theory of liability makes no sense. In effect, the CGR contends that FPJVC had the
obligation to supervise the finances of the Project and those actually making those decision; that
FPJVC had the right to force Reficar to allow it to exercise such control, despite Reficar’s
expressly retaining such control for itself; that FPJVC should have, in some unspecified way,
forced Reficar to act in accordance with FPJVC’s unwelcome directions; and that FPJVC is,
therefore, responsible for the difference between the estimated costs provided by CB&I and the
actual costs of the Project, based upon the notion that Reficar had been promised that the Project
would be completed and delivered in accordance with those estimates. Even if there were the
slightest merit to the premises of that argument – and there is not – it would amount, at most, to a
simple breach of contract, and could not possibly amount to the gross negligence that is the
minimum standard for the CGR to exercise its jurisdiction and impose liability. The fact that the
CGR did precisely that constitutes a clear violation of Colombia’s obligations under the TPA to
provide fair and equitable treatment and due process, and to honor FPJVC’s reasonable
expectations, because no reasonable investor could have possibly foreseen the risk of such
treatment. The fact that the CGR applied a different, and correct, standard to the prominent
Colombian citizens on the Ecopetrol board only makes its violation of the treaty worse.
³⁶ CWS-4, Colin Johnson, at ¶¶ 25-33, 43-46.
³⁷ Under Article 5 of Law 610, the CGR is required to prove the following element of “fiscal responsibility”: (1)
Intentional or culpable conduct attributable to a person who carries out fiscal management; (2) Property damage to
the State; and (3) A causal link between the previous two elements (CL-002).
³⁸ CWS-4, Colin Johnson, at ¶¶ 34-42.
[Page 18]
48. As set out at paragraphs 86 through 88 of the Request for Arbitration, following the
issuance of the CGR Charges, the Colombian press has widely disseminated the CGR’s
sensationalized and inflammatory public statements regarding the Project and the CGR proceeding,
and added its own damaging commentary. By way of example only, the leading newspaper "El
Tiempo" has labeled this process as the "biggest fiscal trial in the history" of Colombia; the
business magazine "Dinero" has reiterated the statement made by the CGR in its press release that
"This decision represents the biggest loss that the Colombian State has suffered in the country's
history, 4 times bigger than the Saludcoop matter in 2013"; and the magazine "Semana" posed the
rhetorical question whether the Project - which provided Colombia with the [largest and] most
modern petroleum refinery in all of South America – has been the biggest scandal of the century.³⁹
FPJVC submits that the CGR’s need to meet the expectations created by its media campaign, and
the public pressure to do something dramatic about the non-existent but well-publicized "fraud" it
was investigating, led to the remarkably shoddy decision at issue.⁴⁰
49. The CGR’s exercise of jurisdiction over FPJVC is a grave misapplication of Colombian
law. Moreover, even if there were a colorable jurisdictional basis for the proceedings, although
there was not, the CGR ignored the substantive protections, including mandatory ICC arbitration,
a liability cap, and a waiver of consequential damages.⁴¹
50. In the June 5, 2018 CGR Charge, the CGR dismissed the Ecopetrol Board of Directors,
which is comprised of prominent Colombian nationals, on the ground that they did not qualify as
"fiscal managers" under Law 610, even though those directors - unlike FPJVC – had, and
exercised, decision-making authority for the Project. Specifically, in dismissing the Ecopetrol
³⁹ Request for Arbitration, ¶ 87.
⁴⁰ In Glencore International A.G. v Republic of Colombia, ICSID Case No. ARB/16/6, the Final Award granted the
same relief sought in this arbitration – an award offsetting the CGR’s improper assessment of damages - and after
summarizing a number of the Controller General’s inflammatory comments in the press, stated that her "public
statements were reprehensible and ill-advised." Although the award itself was not based on the bias shown in those
statements because she had left office before the decision was made. Award of 25 August 2019, at ¶ 1358. (CL-
005). It is unfortunate, to say the least, that the CGR has shown the same conduct here.
⁴¹ [Redacted] (C-007).
[Page 19]
Board of Directors, the CGR reasoned that the Ecopetrol Board of Directors’ conduct did not
constitute fiscal management pursuant to Law 610 because they lacked exclusive decision-making
authority over the expenditure of funds on the Project, and that definitive decision-making
authority was vested in Reficar (which necessarily implies, in and of itself, that FPJVC was also
not a fiscal manager).⁴² The CGR then refused to apply that same legal standard applied in favor
of the Ecopetrol directors, all prominent Colombian citizens, to FPJVC.
51. To be clear, there is no conceivable significant distinction between the Board’s position
and FPJVC’s position. In its dismissal, the CGR found that Ecopetrol’s Board only "provided
advice and consultation to Reficar," and also finding that these acts do not equate to "decision-
making authority."⁴³ On the other hand, the CGR faulted FPJVC for doing the same – providing
advice and consultation, which is what Reficar directed it to do.⁴⁴ Despite performing precisely
as directed, the CGR held FPJVC liable, applying inconsistent legal standards to Ecopetrol’s Board
and FPJVC. The only possible explanation for that distinction is discrimination against a foreign
investor.
52. On October 5, 2018, the CGR issued Auto 1356 relating to the proceedings.⁴⁵
Claimants, along with CB&I and Ecopetrol, were listed in Auto 1356 as "presuntos responsables
fiscales."⁴⁶ The CGR requested the following international assistance in identifying assets:
3. ASUNTO A TRAMITAR
⁴² On pages 4361 – 4696 of the CGR Charge, the CGR carried out a thorough analysis with respect to the acts of each
member of the Board of Directors of Ecopetrol in relation to the approval of each change control – 1 to 4 – based
on which it decided to dismiss the claims against such members. The CGR considered that the Board Members did
not perform acts that could be part of a fiscal investigation because they did not have responsibility for approving
the change controls; such responsibility rested with Reficar’s Board, not Ecopetrol’s Board. The CGR concluded
that Ecopetrol’s Board members, either received the change controls when they were already approved by Reficar’s
Board—even if that was an ultra vires act of Reficar’s Board or against the corporate structures in place for such
Board, or they complied with their role by (i) admonishing the Reficar Board to comply with its corporate
obligations and to increase the productivity of the project, or (ii) assisting Reficar in obtaining financing for the
project and providing Reficar with high level advice and consultation. (C-001).
⁴³ See, e.g., excerpts from CGR Charge at 4361-4696, 6087 (C-001).
⁴⁴ See, e.g., Excerpt from CGR Charge at 3579-80, 3715 (C-001).
⁴⁵ See Auto 1356 at 1 (C-004).
⁴⁶ "Alleged Fiscally Responsible Parties" [English translation].
[Page 20]
Tomando en cuenta que dentro del proceso de responsabilidad fiscal aparecen
vinculadas unas personas jurídicas de origen extranjero, y habida cuenta la
necesidad de realizar la búsqueda de bienes con el fin de implementar las medidas
cautelares adecuadas a la proceso, se solicitó mediante el oficio SIGEDOC
20181E0031141 del 24 de abril de 2018, a la Unidad de Cooperación Nacional e
Internacional para la Prevención, investigación e Incautación de Bienes, la
colaboración para adelantar la búsqueda de bienes a nivel internacional de unos
implicados en la presente actuación fiscal.
Por su parte, la de Cooperación Nacional e Internacional para la Prevención,
Investigación e Incautación de Bienes, remitió a esta dependencia mediante los
oficios 20181E0035800 y 20181E0037923, las solicitudes de asistencia judicial
reciproca, con el fin de que se realice la traducción de las mismas, para el envío de
estas a las respectivas autoridades centrales de los países requeridos.
De esta forma, tomando en cuenta lo anterior se ordenará la traducción del
castellano al inglés de los siguientes documentos:
- SOLICITUD DE ASISTENCIA JUDICIAL RECIPROCA, para “Office of
international affairs Criminal Division Depatment of justice of USA”, de EE.UU.,
la cual obra en 11 folios (fls. 664 al 669 del cuaderno cuatro de las medidas
cautelares).- SOLICITUD DE ASISTENCIA JUDICIAL RECIPROCA, para “Criminal Law
Advisory Team”, del Reino Unido, la cual obra en 9 folios (fis. 671 al 679 del
cuaderno cuatro de las medidas cautelares).- SOLICITUD DE ASISTENCIA JUDICIAL RECIPROCA, para “Office of
international Legal Assistance in Criminal matters, Ministry Of Security and
Justice Of Holanda”, de Holanda, la cual obra en 9 folios (fls. 680 al 688 del
cuaderno cuatro de las medidas cautelares).⁴⁷
53. Although the CGR listed many respondents as “presuntos responsables fiscales," it
clearly was directed at FPJVC because the CGR requested reciprocal judicial assistance to identify
assets in those countries where Claimants have an established presence. Auto 1356 demonstrates
that this Application is not based on a hypothetical fear, but that Colombia intends to seek
immediate enforcement of the CGR Decision. Colombia’s recent refusal to agree to suspend
enforcement or freezing efforts confirms the reality of the present situation.
⁴⁷ See Auto 1356 at 8 (C-004).
[Page 21]
54. On January 17, 2020, the PGN issued a decision (i.e., Auto DEHP 007 de 2020) (the
“PGN Decision”) which endorsed the Jacobs Report’s findings that FPJVC did not have decision-
making authority over the disposition of State assets; it follows that FPJVC could not have been a
fiscal manager. The PGN (In English, the “Inspector General’s Office”) is an independent
Colombian public agency that hears and decides disciplinary actions against public servants and
private parties, including private inspectors and or supervisors of public contracts.⁴⁸ The
relationship between the CGR and the PGN is discussed in further detail below at Section E.2.
55. The PGN Decision confirmed and relied heavily on the Jacobs Report, noting that its
author, Jacobs Consultancy “had full knowledge of what happened during the Project, which gives
it an authoritative voice in its description of the difficulties experienced by the Project."⁴⁹
56. In that regard, the PGN endorsed the conclusion of the Jacobs Report that FPJVC
neither controlled nor directed the Project:
⁴⁸ See CWS-1, Cesar Torrente, at ¶ 15, n. 18.
⁴⁹ Auto DEHP 007 de 2020 (the "PGN Decision”) at 154-55 (C-008).
⁵⁰ "In Jacobs' view, as reflected in its October 2015 report, the management of a reimbursable contract like the one
used to hire the EPC contractor, required an extensive and experienced project management team, thus, REFICAR
hired the consultant FPJVC . . . but REFICAR did not allow [FPJVC] to assume responsibility over the project,
rather, REFICAR placed it [FPJVC] in a support role but with unexperienced REFICAR personnel in positions of
direct control. . . . [A]ll in all, Jacobs observed that REFICAR’s directors, who had no experience in this kind of
project, made all the decisions in the Cartagena Refinery project, and were overwhelmed trying to manage the
changes and deviations . . . .” Id. at 158 [English translation].
[Page 22]
al PMC. Además, el hecho de no aceptar los nuevos pronósticos de CB&I, se
constituyó en una de las herramientas de presión con las que contó REFICAR.”⁵¹
57. The PGN’s conclusions and reliance on the Jacobs Report further establish that the
Project’s alleged delays and cost overruns (including the approvals of certain Change Controls by
Ecopetrol’s and Reficar’s Boards of Directors) could not be attributed to FPJVC because of
Reficar’s decision to: (1) radically reduce the scope of FPJVC’s work on the Project, and (2)
prevent FPJVC from acting as a traditional project manager and owner’s representative, but rather
as a consultant that could only make certain suggestions and recommendations concerning the
Project (some of which Reficar disregarded or bypassed). As a result, CB&I and Reficar – not
⁵¹ "In any case, as mentioned before, REFICAR’s and Ecopetrol’s officers lacked the necessary experience to manage
the project, and given its financial implications for the government, such officers could not make the decision to
hand over control to the PMC. In addition, not accepting new CB&I’s forecasts became one of REFICAR’s tools
to apply pressure . . . ." Id. at 170 [English translation].
⁵² "Additionally, the company's [Reficar's] policies did not allow it to delegate control of the project to the
management consultant (Foster Wheeler) and to take advantage of its experience, which would have
otherwise streamlined the decision-making process within the project." Id. at 172 [English translation]
(emphasis added).
⁵³ "Through email dated September 19, 2014, sent by Nicolás Issakson to Robert Matis from CB[&]I, the former
confirmed that REFICAR would instruct FPJVC to approve the payment of all the subcontractors' invoices issued
by CB[&]I up to 80% of the contract's value in excess of the initial budget for the subcontract." Id. at 203 [English
translation].
⁵⁴ "In this context, on February 24, 2014, two memorandums of understanding, known as MOUs or MOAs, were
executed, one with respect to CB&I Colombiana and the other with respect to CB&I UK, through which REFICAR
agreed with CB[&]I that it would make payments of invoices that had not been approved by FPJVC." Id. at 216
[English translation].
[Page 23]
FPJVC – were the decisionmakers during the course of the Project.⁵⁵ FPJVC was not a fiscal
manager because it: (1) did not supervise, execute, or make any decisions regarding the funds
expended on the Project, (2) did not manage, control, or direct CB&I’s activities or expenditures
on the Project, and (3) could not have prevented the approvals of Change Controls 2, 3, and 4.
And Reficar’s formation of the PMT itself – a fact that the CGR does not deny – proves that
FPJVC’s role was modified.
58. The PGN Decision further establishes that there is no casual connection between any
act by FPJVC and the alleged damage suffered by Colombia:
[R]especto a lo relacionado con los controles de cambio, se
encuentra debidamente probado que los mismos no se
generaron por la terquedad de los aquí investigados, sino por el
contrario fue la respuesta a una proyección de presupuesto
equivocada por parte de la empresa CB&I, que hacia (sic)
imposible continuar con la ejecución de la obra si no se
autorizaba el incremento del presupuesto inicial.⁵⁶
59. The PGN’s independent assessment of FPJVC’s involvement in the Project used the
same criteria as the CGR, namely whether FPJVC had control or direction over the Project. Unlike
the CGR, the PGN actually reviewed the evidence regarding fiscal liability and control of the
Project and concluded that FPJVC did not have control or direction over the Project, which are
essential elements under Law 610 to show “fiscal management."
60. It is crucial to understand the roles of the CGR and the PGN to appreciate the illegality
of the CGR’s refusal to recognize the PGN Report. Under Colombian law, the CGR and the PGN
are two separate and autonomous entities that do not depend on each other, have different scopes
as to their competence and are the highest administrative authorities in their respective jurisdictions.
Under the Constitution, public officers are bound to abide by the Constitution, and the decisions
of the Supreme Court, the Council of State and the Constitutional Court.
⁵⁵ See Jacobs Report at 8, 19, section 4, section 6 (C-006).
⁵⁶ "Regarding the change orders [change controls], it has been properly proven that [the change controls] were
not caused by the stubbornness of those investigated here [the respondents]; to the contrary, it was the result
of a wrong budget estimate made by CB&I, which made it impossible to continue with the performance of
the project, unless the increase of the initial budget was approved." PGN Decision at 237 (C-008) [English
translation] (emphasis added).
[Page 24]
61. As noted above, the CGR and the PGN are both organismos de control, i.e., State
authorities independent and autonomous from all other State branches. The CGR is in charge of
fiscal control, which includes the surveillance of the adequate administration and management of
public funds or goods and the power to initiate fiscal liability proceedings to recoup public
resources in cases where there is damage against the State. On the other hand, the PGN is both: (1)
the head of the “ministerio público” (whose function is to monitor compliance with law, to protect
human rights, and to safeguard the public interest at all levels) and (2) in charge of investigating
and prosecuting public officers’ infractions of law. Both the CGR and the PGN are the highest
administrative authorities in their respective jurisdictions. Their decisions can only be challenged
before the judiciary. Under Colombian law, the PGN, as head of the “ministerio público", is
viewed as a prima facie impartial and independent State entity. Under Article 113 of the
Colombian Constitution, “the different organs of the State have separate functions, but they shall
harmoniously collaborate for the realization of their goals" (the principle of “Harmonious
Collaboration").⁵⁷ By disregarding the PGN Decision and its carefully considered findings, the
CGR Decision violated the “Harmonious Collaboration” principle, including FPJVC’s reasonable
expectations that Colombia would, inter alia, treat its investment in a transparent, consistent, and
predictable manner, in accordance with Colombian law, and refrain from arbitrary or unreasonable
treatment in interpreting its own law.
62. From the time that it first received notice of the CGR Charge, FPJVC has challenged
the CGR’s jurisdiction as a matter of Colombian law through the available avenues provided by
the legal framework provided by the Colombian legal system. First, on October 8, 2018, FPJVC
filed its challenge to the CGR’s jurisdiction, arguing that FPJVC did not fall within the Law 610
definition of "fiscal manager."
63. On August 3, 2020, FPJVC filed a motion pursuant to Article 16 of Law 610⁵⁸ seeking
to dismiss the fiscal liability proceeding as to FPJVC (“Article 16 Motion”). The Article 16
⁵⁷ Constitución Política de Colombia, Article 113 (CL-004).
⁵⁸ Article 16 was a procedural avenue for respondents to dismiss cases where the CGR has no jurisdiction, but Decree
403 removed Article 16 from the text of the statute, depriving respondents of a right to seek dismissal on these
grounds. Article 16 of Law 610 stated: “Termination of the fiscal action. It shall be grounds for dismissal of the
[Page 25]
Motion explains that FPJVC does not meet the definition of “fiscal manager” because it lacked
decision-making authority for the Project. FPJVC also argued that the CGR should have used the
same standard for FPJVC it used to dismiss some members of the Ecopetrol Board of Directors
from the fiscal liability proceeding. Like those Colombian directors, FPJVC did not have decision-
making authority in the Project, let alone power to implement measures to control costs prior to
the approvals of any Change Control. The Article 16 Motion also relied on the PGN Decision.
Though the CGR never actually ruled on the Article 16 Motion, the CGR denied it by operation
of law when it issued the CGR Decision finding FPJVC fiscally liable for damages allegedly
caused due to the approval of Change Controls 2 and 3.
64. As detailed above, the CGR plainly had no jurisdiction over FPJVC because, among
other reasons, FPJVC was not a “fiscal manager” under Law 610. Two Colombian laws, which
were issued long after FPJVC entered into the Contract with Reficar, were enacted to expand the
definition of fiscal management under Law 610. In general terms, the changes in Colombian law
expanded the CGR’s jurisdiction. Among them, the CGR now has the power not only to initiate
ex post facto fiscal liability proceedings, but also to take “immediate action"⁵⁹ and undertake
“preventative and concomitant" control⁶⁰ to ensure appropriate expenditure of public resources.
Article 128 of Law 1474 of 2011 created 11 Deputy Investigators (“contralores”) throughout
Colombia responsible for taking “immediate action” due to “imminent risk of loss or undue impact
on public property or to establish the occurrence of facts constituting fiscal responsibility and to
collect and secure evidence for the advance of the corresponding processes."⁶¹ Accordingly, given
the public nature of the Project, the CGR audited it every year and was fully aware of the Change
Controls, yet did nothing at the time to take preventative measures to protect the public waste it
case, at any stage of the preliminary investigation or of the fiscal liability proceeding, if it is established that the
fiscal liability could not have been initiated or continued due to the expiration of the proceedings or the applicable
statute of limitation period has run; when it has been shown that the fact [giving rise to the claim] did not exist
or it did not cause economic harm to the State or does not constitute the exercise of fiscal management; or when
it has been shown that there is a ground that excludes fiscal liability or if it has been shown that the harm that is
under investigation has been completely compensated." (emphasis added) (CL-002).
⁵⁹ Article 128 of Law 1474 of 2011 (CL-006).
⁶⁰ Preamble to Decree 403 of 2020 (CL-007).
⁶¹ Article 128 of Law 1474 of 2011 (CL-006).
[Page 26]
complains of now, even though it had the power to prevent any cost overruns under Colombian
law.⁶² The changes in the law most relevant to Claimants are detailed further below.
65. Law 1474, which as noted above was enacted in 2011, sought to expand the definition
of who may be considered fiscal managers; however, it still required proof of decision-making
authority (it should be noted that the Deputy Controller has provided no evidence whatsoever of
FPJVC’s decision-making authority, and to the contrary, it was provided with overwhelming
evidence that at all times Reficar maintained such authority). Decreto Número 403 de 2020, issued
by the President of the Republic of Colombia on March 16, 2020 (“Decree 403”), purports to
expand the scope of fiscal management even further – in an apparent attempt to cover entities such
as FPJVC.
66. Most significantly, Article 4 of Law 610’s definition of “fiscal manager” was expanded
by Decree 403 as follows, with the former language on the left and the new language on the right:
| Artículo 4°. Objeto de la responsabilidad fiscal. La responsabilidad fiscal tiene por objeto el resarcimiento de los daños ocasionados al patrimonio público como consecuencia de la conducta dolosa o culposa de quienes realizan gestión fiscal mediante el pago de una indemnización pecuniaria que compense el perjuicio sufrido por la respectiva entidad estatal. Para el establecimiento de responsabilidad fiscal en cada caso, se tendrá en cuenta el cumplimiento de los principios rectores de la función administrativa y de la gestión fiscal. |
Artículo 4º. Objecto de la responsabilidad fiscal. La responsabilidad fiscal tiene por objeto el resarcimiento de los daños ocasionados al patrimonio público como consecuencia de la conducta dolosa o gravemente culposa de quienes realizan gestión fiscal 0 de servidores públicos o particulares que participen, concurran, incidan 0 contribuyan directa 0 indirectamente en la producción de los mismos, mediante el pago de una indemnización pecuniaria que compense el perjuicio sufrido por la respectiva entidad estatal. Para el establecimiento de responsabilidad fiscal en cada caso, se tendrá en cuenta el cumplimiento de los principios rectores de la función administrativa y de la gestión fiscal. Parágrafo. La responsabilidad fiscal es autónoma e independiente y se entiende sin perjuicio de cualquier otra clase de responsabilidad”. ⁶³ |
67. This amendment directly impacted FPJVC because, instead of generally applying to
only "those who perform fiscal management,” Law 610 now purports to broadly apply to “public
servants or private parties who participate, concur, influence or contribute directly or indirectly to
the generation of such damages.” This amendment broadens the scope of “fiscal manager” in an
⁶² Law 1474 effectively conferred overarching “fiscal manager" status upon the CGR officials, yet the CGR took no
steps to alter the course of events as they were unfolding. Either they are complicit in the alleged wrongdoing, or
their failure to act is an admission that the management was appropriate under the circumstances.
⁶³ Textual comparison of Law 610 and Law 610, as amended by Decree 403 of 2020 (CL-007).
[Page 27]
attempt to include entities like FPJVC and provides that consultants may be liable as fiscal
managers, even if they lack decision-making authority with respect to the handling or management
of public assets or resources.
68. Decree 403 also amended Article 5, which again broadens the applicability of the
definition of “fiscal manager” to include in the elements of fiscal liability one who “participates,
concurs, influences, or contributes directly or indirectly in the generation of the patrimonial
damage to the State,” whereas before it only applied to a “person that performs fiscal management":
| Artículo 5º. Elementos de la responsabilidad fiscal. La responsabilidad fiscal estará integrada por los siguientes elementos: - Una conducta dolosa o culposa atribuible a una persona que realiza gestión fiscal. - Un daño patrimonial al Estado. - Un nexo causal entre los dos elementos anteriores. |
Artículo 5°. Elementos de la responsabilidad fiscal. La responsabilidad fiscal estará integrada por los siguientes elementos: - Una conducta dolosa 0 gravemente culposa atribuible a una persona que realiza gestión fiscal o de quien participe, concurra, incida o contribuya directa o indirectamente en la producción del daño patrimonial al Estado. - Un daño patrimonial al Estado. - Un nexo causal entre los dos elementos anteriores.⁶⁴ |
69. The Decree also amended Article 6, which defines “patrimonial damage":
| Artículo 6º. Daño patrimonial al Estado. Para efectos de esta ley se entiende por daño patrimonial al Estado la lesión del patrimonio público, representada en el menoscabo, disminución, perjuicio, detrimento, pérdida, uso indebido o deterioro de los bienes o recursos públicos, o a los intereses patrimoniales del Estado, producida por una gestión fiscal antieconómica, ineficaz, ineficiente, inequitativa e inoportuna, que en términos generales, no se aplique al cumplimiento de los cometidos y de los fines esenciales del Estado, particularizados por el objetivo funcional y organizacional, programa o proyecto de los sujetos de vigilancia y control de las contralorías. Dicho daño podrá ocasionarse por acción u omisión de los servidores públicos o por la persona natural o jurídica de derecho privado, que en forma dolosa o culposa produzcan directamente o contribuyan al detrimento al patrimonio público. El texto subrayado fue declarado INEXEQUIBLE por la Corte Constitucional mediante Sentencia C-340 de 2000. |
Artículo 6º. Daño patrimonial al Estado. Para efectos de esta ley se entiende por daño patrimonial al Estado la lesión del patrimonio público, representada en el menoscabo, disminución, perjuicio, detrimento, pérdida, o deterioro de los bienes o recursos públicos, o a los intereses patrimoniales del Estado, producida por una gestión fiscal antieconómica, ineficaz, ineficiente, e inoportuna, que en términos generales, no se aplique al cumplimiento de los cometidos y de los fines esenciales del Estado, particularizados por el objetivo funcional y organizacional, programa o proyecto de los sujetos de vigilancia y control de los órganos de control fiscal. Dicho daño podrá ocasionarse como consecuencia de la conducta dolosa o gravemente culposa de quienes realizan gestión fiscal o de servidores públicos o particulares que participen, concurran, incidan 0 contribuyan directa o indirectamente en la producción del mismo.⁶⁵ |
70. Again, this change vastly broadens the powers of the Colombian Government to bring
a fiscal liability action against “private parties that participate, concur, influence, or contribute
⁶⁴ Id.
⁶⁵ Id.
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directly or indirectly” to the “generation” of damages, and importantly, Decree 403 provides that
consultants or “contributors” may be liable as fiscal managers even if they lack decision-making
authority with respect to the handling or management of public assets or resources. In fact, these
amendments to Colombian law makes it even clearer that the law applicable to FPJVC was limited
to those exercising control over the expenditure of public funds; were that not the case, there would
have been no reason to amend the law to attempt to cover FPJVC.
71. While Decree 403 and Law 1474 may contain expanded definitions of what constitutes
fiscal management and who may be considered fiscal managers under Law 610, it is clear that
neither was in effect at the time FPJVC entered into the Contract with Reficar. As such, it is
completely improper and is a gross violation of Colombia’s obligations under the TPA and
international law to have held FPJVC liable as fiscal managers without evidence of decision-
making authority – the retroactive application of a statute is one of the clearest violations of a host
country’s obligations towards its foreign investors.
72. On April 26, 2021, the Deputy Controller rendered the 6,243-page CGR Decision in a
document known as Auto 749. FPJVC’s deadline to appeal the CGR Decision under Colombian
law was a mere five days, which was an absurdity given the length and complexity of the CGR
Decision. FPJVC immediately requested a 90-day extension of its filing deadline, noting that only
five days to respond was a gross violation of FPJVC’s due process rights. The CGR denied
FPJVC’s reasonable and necessary extension request, and granted no extension at all.⁶⁶ However,
as a result of an administrative error by the CGR when it failed to serve complete copies of Auto
749 on the parties, FPJVC ultimately had another seven days to file its appeal – for a task of such
magnitude, there is no meaningful difference between five and twelve days.
73. Like the CGR Charge and the underlying CGR proceedings before it, the CGR
Decision is riddled with material deficiencies that effected grave violations to FPJVC’s due
process rights. Substantively, the findings made against FPJVC by the Deputy Controller are
⁶⁶ FPJVC also filed a tutela with the Council of State requesting this extension, but the Council of State denied the
request for relief.
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based on an alleged breach of contractual obligations vis-à-vis Reficar under the Contract. The
contractual guarantees limiting FPJVC’s exposure were ignored by the CGR.⁶⁷ FPJVC invested
in Colombia and executed the Contract based on these promises and in reliance on these
contractual safeguards and on Colombian law to enforce them. The CGR Decision – and the CGR
proceedings as a whole – render FPJVC’s contractual rights meaningless and violate FPJVC’s
right to fair and equitable treatment and due process, deny it national treatment, and violate its
reasonable expectations.
74. Significantly, after three years of consistently asserting that FPJVC’s liability was
related to its alleged grossly negligent acts as a “fiscal manager” under Law 610, the CGR switched
gears. Because there was no evidence that FPJVC was ever a “fiscal manager”, the CGR asserted
that FPJVC was liable as a "contributor”, in accordance with the broadened definitions of “fiscal
manager” and “fiscal management” under Decree 403 of 2020. This new “contributor” theory
advanced by the CGR is in effect a concession that FPJVC never had decision-making authority
over the expenditure of public funds in connection with the Project, as required by Law 610.
Decree 403 came into effect in March 2020, three years after the CGR commenced its investigation
in March 2017, and almost two years after it issued formal charges against FPJVC and others in
June 2018, but after FPJVC had challenged the CGR’s jurisdiction on this ground. Though the
CGR did not expressly state that it was applying the new definitions under Decree 403 to FPJVC
in the fiscal liability proceedings, the CGR copied its amended language in haec verba in the CGR
Decision and the retroactive application of Decree 403 was clearly the rationale for its decision.
75. The CGR’s retroactive application of Articles 4, 5, and 6 of Law 610 (as amended by
Decree 403) is a gross departure from applicable law and breaches the fundamental due process
rights guaranteed by Colombia’s constitution⁶⁸ because FPJVC relied on the prior version of Law
610 for its defense in the CGR proceedings. This retroactive application not only violates both
long-established principles of international investment law, FPJVC’s reasonable expectations
regarding the law that would apply to its investment, and it also breaches Colombian Constitutional
and statutory law, which prohibit giving substantive provisions retroactive effect.
⁶⁷ See supra part II(A)(1) of the Application.
⁶⁸ Constitución Política de Colombia, Articles 29 and 58 (CL-004).
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76. As noted above, the CGR Decision found that FPJVC was jointly and severally liable
for alleged damages in the amount of COP 2,945,409,783,732.43 (approximately US$811 million
at the current rate of exchange), based on a newly devised and fundamentally flawed damages
methodology. The CGR’s damages methodology does not meet the minimum requirements for a
damages methodology in an investment treaty case, and suffers from multiple fundamental
problems.⁶⁹
77. The CGR held that FPJVC, among other participants, was jointly and severally liable
for gross negligence for the following amounts: (1) approximately US$366,255,522 as a result of
the approval of Change Control 2, and (2) approximately US$445,122,990 as a result of the
approval of Change Control 3. The errors in the CGR’s damages methodology, and the impact it
had on FPJVC’s ability to defend itself, are briefly explained here.
78. First, the CGR did not even attempt a fundamental analysis to support its purported
damages in the CGR Charge or the CGR Decision. Common practice requires, at a minimum: (1)
a causal analysis to establish a link between the actions or inactions of those parties it identifies as
responsible and the alleged damages resulting from those actions or inactions; and (2) a
quantification of the damages that results from each of those specific actions or inactions.⁷⁰ The
CGR did not meet either of those minimum requirements, and the CGR itself admits in its Decision
that its damages model is non-standard and that it did not even attempt to describe a causal link
between the alleged acts or omissions of the parties and the claimed resulting damages.⁷¹
79. Instead, the CGR’s methodology treats any reduction in the financial value of the
Project below what was originally expected (based on a set of initial and flawed Base Line
⁶⁹ CWS-4, Colin Johnson, ¶¶ 18-20.
⁷⁰ Id. at ¶ 20. Law 610 also requires this. Article 5 (prior to the Decree 403 amendment) states: “Fiscal responsibility
shall consist of the following elements: (i) Intentional or culpable conduct attributable to a person who carries out
fiscal management, (ii) Property damage to the State, (iii) A causal link between the previous two elements." (CL-
002).
⁷¹ Id. at ¶ 21.
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projections) to represent damages to the State, irrespective of the cause of such reduction, and
jointly and severally attributes these damages to FPJVC and others.⁷²
80. In addition to lacking the requisite causal analysis and a breakdown of the
quantification of damages to support such analysis, the CGR’s methodology is defective because
of: (1) the application of a meaningless concept of a “promise of value and profitability;” (2) the
inappropriate use of a financial model based on Base Line projections – the foundation of the
supposed promise – as a basis for the quantification of damages; (3) the inappropriate reliance on
projections as a basis for the quantification of damages; (4) the admitted failure to undertake any
causal analysis; (5) the failure to consider the scenarios available to the Board of Directors of
Reficar at each Change Control; and (6) the exclusion of operating cashflows on the basis of
“uncertainty."
81. First, regarding the “promise of value and profitability" raised by the CGR in its
damages methodology, this is a concept that suggests that by approving additional capital
expenditure (“CAPEX”) investments, the approver (which, as noted above, does not include
FPJVC) directly jeopardized both value and profitability. But this concept fails, inter alia, because
it is based on the incorrect assumption that expected returns were not only expected, but
guaranteed.⁷³
82. Second, the CGR referred to the Base Line projections (which were themselves only
initial estimates) from the beginning of the Project as the basis for its “promise of value and
profitability," by which it assesses the variations to the projections in order to determine the
existence of damages.
83. Third, the CGR’s quantification of damages relies on Base Line projections that look
at events that occurred after the Base Line, as opposed to actual data available to it. In order to
⁷² Id. Each Change Control budget increase request is comprised of separate and distinct cost items, each with its own
etiology. Change Control 2, for instance, includes such things as: (i) overcharges due to underestimated items and
omissions in the initial estimates; (ii) scope increases to improve plant reliability, operability and ease of
maintenance; (iii) changes in execution strategy; (iv) strikes and poor labor productivity; (v) extension of the
project’s completion date; (vi) negative currency exchange rate impacts, etc. However, the CGR has not even
identified these specific cost items let alone attempt to explain how FPJVC’s conduct caused them or how they
constitute damage to the State. Moreover, the amounts for these cost items were estimated costs to be incurred.
The CGR has not gone back and determined the actual amounts incurred for these items.
⁷³ Id. at ¶¶ 25-33.
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demonstrate the existence of damages by reference to alleged delays and additional costs, the CGR
should have identified those costs or losses that were actually incurred, which it failed to do.⁷⁴
84. Fourth, the CGR failed to conduct any causal analysis to establish a link between the
actions or inactions of those parties it identified as responsible in the Initial Investigation, the CGR
Charge, and the CGR Decision, and the alleged damages that resulted from those actions or
inactions. Indeed, the CGR Decision states that because there were several joint causes of damage
produced by several contracting parties to the Project (including FPJVC), it was “evident” that
there was a causal link with respect to those contracting parties.⁷⁵ For obvious reasons, doing so
is imperative to a quantification of damages for wasted costs or loss of profits. Without this, as an
example, a delay or loss clearly caused by another party would still be applied to a faultless party,
as the CGR has done in this case.⁷⁶ In that regard, Law 610 expressly requires that damages be
assessed on an individual basis.⁷⁷
85. Fifth, as part of the CGR’s consideration whether a particular action (e.g., continuing
with the Project, approving additional investments and/or agreeing to a change of scope) was
actually a cause of damage, the CGR assumes damage on the premise that, but for the decisions
taken at each Change Control (which it variously attributes to the Reficar Board of Directors and
FPJVC), the Project could have continued (and been completed) in accordance with the Base Line
projections, thereby achieving its supposed “promise of value and profitability."⁷⁸
86. Finally, though the CGR recognized that the operational phase of the Project would
offer an opportunity for efficiencies which can be evaluated by means of profitability indicators,
which would support the relevance of operating cashflows (which are directly linked to the
investments made in the Project) to any financial or economic assessment, the CGR limits its
assessment to the CAPEX investment period only in its quantification of damages for wasted costs
due to "uncertainty” as to future cashflows.⁷⁹ That exclusion of evidence that would be considered
⁷⁴ Id. at ¶¶ 43-46.
⁷⁵ Excerpt from CGR Decision at 1203 (C-002).
⁷⁶ CWS-4, Colin Johnson. ¶¶ 47-53.
⁷⁷ Law 610, Article _ (CL-002).
⁷⁸ CWS-4, Colin Johnson, ¶¶ 54-59.
⁷⁹ Id. at ¶¶ 60-63.
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by any valuation expert stands in sharp contrast to the edifice of speculation and guesswork that
Colombia built to claim almost a billion dollars in damages from the foreign entities involved with
the Project.⁸⁰
87. In Glencore International A.G. v. Republic of Colombia, the Final Award granted the
Claimant an offsetting award equal to the amount assessed in a CGR proceeding, with interest,
specifically because:
The determination of the existence and quantum of damages made
by the Contraloría in its Decision is biased, contrary to basic
principles of legal reasoning and financial logic, and incompatible
with the standard of conduct which Colombia undertook to provide
to protected Swiss investors under Art. 4(1) of the Treaty.⁸¹
88. The damage model followed by the CGR in Glencore was a model of clarity and
consistency compared to the one at issue here. Just as in Glencore, the fatally flawed damage
model followed by the CGR, by itself, calls for full relief to FPJVC under the TPA.
89. On May 7, 2021, FPJVC filed the Appeal with the Sala Fiscal Sancionatoria, the FSS,
which handles appeals from CGR decisions. FPJVC was afforded only five days to file its appeal,
despite its request for an extension. The FSS is the last stop in the CGR’s internal appeal process.
The FSS is made up of four Deputy Controllers and the officials of the office of the Contralor
General.⁸² These officials are subordinate to the head of CGR.⁸³ Considering the composition of
the FSS, the time constraints placed on FPJVC to defend itself, and the FSS’s subordination to the
CGR, the FSS’s approval of the CGR Decision was a forgone conclusion.⁸⁴
90. Not surprisingly, on July 6, 2021, the FSS formally rejected FPJVC’s arguments on
appeal and affirmed the CGR Decision in its entirety by issuing a decision known as of Auto –
ORD-801119-158-021. In denying the Appeal, the FSS adopted the CGR’s findings in their
entirety and determined that FPJVC’s due process rights under Colombian law were not violated
⁸⁰ Id. at ¶ 63.
⁸¹ Award of 25 August 2019, at ¶ 1475. (CL-005).
⁸² CWS-1, Cesar Torrente at ¶ 13.
⁸³ Id.
⁸⁴ Id.
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by an appeal deadline of less than two weeks. Instead of explaining the legal theories or rationale
in the CGR Decision, the FSS simply doubled down on the CGR’s “contributor” theory. Indeed,
the FSS found that, even assuming that FPJVC did not have the authority to make final decisions
or approve major expenditures of public funds, there was no evidence that the Contract was
amended and, as such, FPJVC was ultimately responsible to direct the investments in the Project
to “feliz término,”⁸⁵ holding FPJVC strictly liable for the Project’s budget increases. On its own
terms, the CGR’s conclusion makes no sense – the scope of FPJVC’s work was changed and
reduced, but even if it had not been, a finding that amounts, at most, to a breach of contract, cannot
possibly be transformed into a finding of gross negligence, the minimal standard for imposing
liability under Law 610.
91. On August 24, 2021, Claimants wrote to Colombia to formally request that Respondent
agree to cease any enforcement or freezing efforts against FPJVC’s assets until conclusion of this
arbitration. On September 1, 2021, Respondent refused, signaling its intention to proceed with
such enforcement.
92. FPJVC seeks to protect the following rights through this Application: (1) its right to
the preservation of the status quo and the non-aggravation of the dispute; and (2) its right to
exclusive recourse to ICSID under Article 26 of the ICSID Convention, both well-established by
ICSID tribunals, and in the jurisprudential literature.⁸⁶
⁸⁵ Excerpt from Auto – ORD-801119-158-021 (i.e., the Appeal Decision) at 1206 (C-009).
⁸⁶ See, e.g., Gavrilovic and Gavrilovic d.o.o. v. Republic of Croatia, ICSID Case No. ARB/12/39, Decision on
Provisional Measures, ¶ 92 (Apr. 30, 2015) (CL-008) (the rights capable of protection by provisional measures
include: "(i) the procedural integrity of the arbitration; (ii) the preservation of the status quo and the non-aggravation
of the dispute; (iii) equality of arms; and (iv) the exclusivity of the ICSID proceedings under Article 26 of the
ICSID Convention."); Hydro S.r.l. and others v. Republic of Albania, ICSID Case No. ARB/15/28, Order on
Provisional Measures, ¶¶ 3.17-3.18 (Mar. 3, 2016) (CL-009) (same); see also Teinver S.A., Transportes de
Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID Case No. ARB/09/1, Decision
on Provisional Measures, ¶ 177 (Apr. 8, 2016) (CL-010) (“As a number of tribunals have found, the rights which
may be protected include procedural rights, such as the preservation of the integrity of the proceedings and the
preservation of the status quo and non-aggravation of the dispute."); see, e.g., Nova Group Investments, B.V. v.
Romania, ICSID Case No. ARB/16/19, Procedural Order No. 7 Concerning the Claimant Request for Provisional
Measures, ¶¶ 234-237 (Mar. 29, 2017) (CL-011) (“the right to procedural integrity of this case, and the right to
[Page 35]
93. This Tribunal has the authority to issue provisional measures of protection to maintain
the status quo and to preserve this Tribunal’s ability to award effective relief upholding FPJVC’s
rights under the TPA.⁸⁷ The right to preservation of the status quo is based on the principle that
“once a dispute is submitted to arbitration the parties should not take steps that might aggravate or
extend their dispute or prejudice the execution of the award."⁸⁸
94. ICSID tribunals routinely grant provisional measures to protect this right by enjoining
a party from initiating parallel proceedings that concern the same subject matter of the arbitration,
because parallel proceedings undermine a tribunal’s authority to fully adjudicate the dispute.⁸⁹ As
explained by the ICSID tribunal in Occidental:
provisional measures . . . have always been directed at the behavior
of the parties to the dispute, whether they consisted of measures
required to maintain – or restore – peace between them, or to prevent
one party from initiating or pursuing parallel litigation, for example
in the national courts, thereby directly undermining the international
proceedings.⁹⁰
preservation of the status quo and non-aggravation of the dispute" are among the rights that "[n]umerous prior
tribunals have found ... are self-standing rights capable of protection by provisional measures.”).
⁸⁷ See, e.g., Quiborax S.A., Non Metallic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, ICSID
Case No. ARB/06/2, Decision on Provisional Measures, ¶¶ 134-137 (Feb. 26, 2010) (CL-012) (“The existence of
the right to the preservation of the status quo and the non-aggravation of the dispute is well-established...."); see
also Caratube International Oil Company LLP v. Republic of Kazakhstan, ICSID Case No. ARB/08/12, Decision
Regarding Claimant’s Application for Provisional Measures, ¶ 127 (July 31, 2009) (CL-013) (the right to the
preservation of the status quo and the non-aggravation of the dispute are “well established since the case of the
Electricity Company of Sofia and Bulgaria"); see, e.g., Churchill Mining and Planet Mining Pty Ltd v. Republic of
Indonesia, ICSID Case No. ARB/12/14 and 12/40, Procedural Order No. 9, ¶ 90 (July 8, 2014) (CL-014) (the
ICSID tribunal considers that it is undisputed that the right to the preservation of the status quo and the non-
aggravation of the dispute may find protection by way of provisional measures; within the ICSID framework, the
right to the preservation of the status quo and the non-aggravation of the dispute is a self-standing right vested in
any party to ICSID proceedings.).
⁸⁸ Burlington Resources Inc. v. Republic of Ecuador, et al., ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 62
(June 29, 2009) (CL-015).
⁸⁹ See, e.g., Victor Pey Casado and President Allende Foundation v. Republic of Chile I, ICSID Case No. ARB/98/2,
Decision on Provisional Measures [Spanish], ¶¶ 67-76 (Sept. 25, 2001) (CL-016) (the tribunal notes that all parties
involved in the dispute have an obligation to abstain from undertaking any or all acts which would have the effect
of aggravating the situation or which would render the execution of the award more onerous.); see also Plama
Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Order [on Provisional Measures], ¶ 45
(Sept. 6, 2005) (CL-017) (the right to non-aggravation of the dispute refers to actions which would make resolution
of the dispute by the tribunal more difficult); Tokios Tokelés v. Ukraine, ICSID Case No. ARB/02/18, Procedural
Order No. 3, ¶¶ 7, 15 (Jan. 18, 2005) (CL-018) (same).
⁹⁰ Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of Ecuador,
ICSID Case No. ARB/06/11, Decision on Provisional Measures, ¶ 97 (Aug. 17, 2007) (CL-019).
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95. As such, Claimants seek an order preventing Colombia from taking steps to enforce the
disputed CGR Decision until this arbitration has concluded, as enforcement would certainly
aggravate the dispute and impair Claimants’ rights to effectively participate in this arbitration.⁹¹
It is for this reason as well that Claimants seek an emergency temporary order to similarly preserve
the status quo until the Tribunal can hear and decide this Application.
96. Claimants also seek to protect their rights to an exclusive remedy with respect to the
subject matter of this arbitration a right that is similarly well recognized.⁹² Article 26 of the ICSID
Convention provides, in part:
Consent of the parties to arbitration under this Convention shall,
unless otherwise stated, be deemed consent to such arbitration to the
exclusion of any other remedy. A Contracting State may require the
exhaustion of local administrative or judicial remedies as a
condition of its consent to arbitration under this Convention.
97. As stated by the ICSID tribunal in Tokios Tokelés v. Ukraine, the right to exclusive
remedy means a party may not seek any other recourse with respect to the subject matter of the
arbitration, whether by way of domestic or international relief:
Among the rights that may be protected by provisional measures is
the right guaranteed by Article 26 to have the ICSID arbitration be
the exclusive remedy for the dispute to the exclusion of any other
remedy, whether domestic or international, judicial or
administrative.⁹³
98. Accordingly, Claimants request that the Tribunal enjoin Colombia from commencing
any enforcement proceedings with respect to the CGR Decision or pursue any other recourse
against Claimants that involves the subject matter of this dispute to preserve FPJVC’s right to an
exclusive remedy under the TPΑ.⁹⁴
⁹¹ Id. at ¶ 65 ("There is no doubt in the Tribunal's mind that the seizures [of Claimant's assets] are bound to aggravate
the present dispute.")
⁹² See, e.g., Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 57 (CL-015) (“The Tribunal has no
doubt about the existence of a right to exclusivity susceptible of protection by way of provisional measures"); CSOB
v. Slovakia, ICSID Case No. ARB/97/4, Procedural Order No. 4 (Jan. 11, 1999) (CL-020); Tokios, ICSID Case No.
ARB/02/18, Procedural Order No. 3, ¶ 7 (CL-018); Plama, ICSID Case No. ARB/03/24, Order, ¶ 38 (CL-017).
⁹³ Tokios, ICSID Case No. ARB/02/18, Order No. 3, ¶ 7 (CL-018).
⁹⁴ See Perenco Ecuador Limited v. Republic of Ecuador and Empresa Estatal Petróleos del Ecuador, ICSID Case
No. ARB/08/6, Decision on Provisional Measures, ¶ 61 (May 8, 2009) (CL-021) (finding that the parties may not
[Page 37]
99. The general principle providing for the granting of Provisional Measures was explained in Tokios Tokelés v. Ukraine as follows:
[P]arties to a dispute over which ICSID has jurisdiction must refrain from any measure capable of having a prejudicial effect on the rendering or implementation of an eventual ICSID award or decision, and in general refrain from any action of any kind which might aggravate or extend the dispute or render its resolution more difficult.95
100. ICSID Article 47 sets forth this Tribunal's authority to issue provisional measures:
Except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party.
101. Article 47 is supplemented by ICSID Arbitration Rule 39(1) which provides:
At any time after the institution of the proceeding, a party may request that provisional measures for the preservation of its rights be recommended by the Tribunal. The request shall specify the rights to be preserved, the measures the recommendation of which is requested, and the circumstances that require such measures.
102. Although Article 47 uses the term “recommend”, it is widely accepted that this term has the same force and effect as an “order.” In Perenco v. Ecuador, for example, the tribunal reiterated this principle, stating that “[i]t is now generally accepted that provisional measures are tantamount to orders, and are binding in the party to which they are directed.”96
resort to domestic courts to enforce or resist any claim or right which forms part of the subject matter of the ICSID arbitration.).
95 Tokios Tokelés v. Ukraine, ICSID Case No. ARB/02/18, Order No. 1, ¶ 2 (July 1, 2003) (CL-022). ↩
96 Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ 74 (CL-021). See, e.g., Occidental, ICSID Case No. ARB/06/11, Decision on Provisional Measures, ¶ 58 (CL-019) (“The Tribunal wishes to make clear for the avoidance of doubt that, although Article 47 of the ICSID Convention uses the word ‘recommend’, the Tribunal is, in fact, empowered to order provisional measures.”) (emphasis in original); see also City Oriente Limited v. The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No. ARB/06/21, Decision on Provisional Measures, ¶ 52 (Nov. 19, 2007) (CL-023) (“[I]t is the Tribunal’s conclusion that the word ‘recommend’ is equal in value to the word ‘order.”); see also Tokios, ICSID Case No. ARB/02/18, Order No. 1, ¶ 4 (CL-022) (“It is to be recalled that, according to a well-established principle laid down by the jurisprudence of the ICSID tribunals, provisional measures ‘recommended’ by an ICSID tribunal are legally compulsory; they are in effect ‘ordered’ by the tribunal, and the parties are under a legal obligation to comply with them.”). ↩
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103. This Tribunal also has the authority to issue emergency temporary provisional measures pending resolution of Claimants’ Application. For example, in Perenco v. Ecuador, the claimant asked, inter alia, that the ICSID tribunal “issue immediately an order in the nature of a temporary restraint prohibiting Ecuador from undertaking any measures pending determination of the application for provisional measures.”97 The ICSID tribunal granted Perenco’s emergency relief and “request[ed] the parties to refrain from initiating or continuing any action or adopting any measure which may, directly or indirectly, modify the status quo between the parties vis-à-vis the participation contracts, including any attempt to seize any asset of [Perenco], until it has had an opportunity to further hear from the parties on the question of provisional measures.”98
104. In City Oriente v. Ecuador, the ICSID tribunal ordered that “pending a decision by the Tribunal on the provisional measures requested by Claimant ... both parties refrain from engaging in any conduct – including, without limitation, any act, resolution or decision – that may directly or indirectly affect or modify the legal situation existing as of such date,” and that “[i]f either party intends to take any measure that may violate the provisions set forth herein, prior notice must be served to the Tribunal, granting enough time so that the Tribunal may proceed as appropriate.’”99
105. The elements required to obtain an order for provisional measures are: (1) prima facie jurisdiction; (2) prima facie establishment of the right to the relief sought; (3) urgency; (4) imminent danger of serious prejudice (necessity); and (5) proportionality.100 Claimants unequivocally satisfy each of these elements.
97 Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶¶ 23, 28 (CL-021). ↩
99 City Oriente, ICSID Case No. ARB/06/21, Decision on Provisional Measures, ¶ 13 (CL-023). ↩
100 See, e.g., Lao Holdings N.V. v. The Government of the Lao People’s Democratic Republic, ICSID Case No. ARB(AF)/12/6, Decision of Claimant’s Amended Application for Provisional Measures, ¶ 12 (Sept. 17, 2013) (CL-024); see also Sergie Paushok, et al. v. The Government of Mongolia, UNCITRAL, Order on Interim Measures, ¶ 45 (Sept. 2, 2008) (CL-025). ↩
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106. It is well-established that a tribunal may grant provisional measures when there is a prima facie basis for its jurisdiction.101 As explained by the tribunal in Millicom v. Senegal:
[I]t is accepted practice for the Arbitral Tribunal to find that it holds at least prima facie jurisdiction to rule on the merits. This implies that the Arbitral Tribunal cannot and must not examine in depth the claims and arguments submitted on the merits of the case; it must confine itself to an initial analysis, i.e. “at first sight”. For this, it is necessary and sufficient that the facts alleged by the applicant establish this jurisdiction without it being necessary or possible at this stage to verify them and analyse them in depth.102
107. It is of no consequence to this Application if Respondent challenges the Tribunal’s jurisdiction to decide this dispute, so long as Claimants have made a prima facie showing of jurisdiction.103 Indeed, ICSID tribunals have granted requests for provisional measures even if they have yet to decide jurisdictional objections.104
108. Here, Claimants make far more than a prima facie showing that the Tribunal has jurisdiction to consider and resolve this dispute. As set forth in the Request for Arbitration, Colombia consented to this arbitration pursuant to Article 10.17.1 of the TPA, which provides that “[e]ach Party consents to the submission of a claim to arbitration under this Section in accordance with this Agreement.” Article 10.17.2 further provides that “[t]he consent under paragraph 1 and the submission of a claim to arbitration under this Section shall satisfy the requirement of: (a) Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules for written consent of the parties to this dispute . . . .”
101 See, e.g., Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 49 (CL-015); see also Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ 39 (CL-021). ↩
102 Millicom International Operations B.V. and Sentel GSM S.A. v. Republic of Senegal, ICSID Case No. ARB/08/20, Decision on the Application of Provisional Measures, ¶ 42 (Dec. 9, 2009) (CL-026). ↩
103 See C. Schreuer, The ICSID Convention: A Commentary 771-74 (2d 2009) (CL-027). ↩
104 See, e.g., Hydro, ICSID Case No. ARB/15/28, Order on Provisional Measures, ¶ 3.7 (CL-009) (“It is not in issue that an ICSID tribunal may recommend provisional measures even where it is yet to decide the question of its jurisdiction”); Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ 53 (CL-021) (“It is clearly a contested matter about which both written and oral evidence will be required and it would be premature to embark on such an expedition at the stage of a request for interim measures, where the Tribunal only needs to decide whether there is prima facie jurisdiction.”); Quiborax, ICSID Case No. ARB/06/2, Decision on Provisional Measures, ¶ 105 (CL-012). ↩
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109. Under Article 10.16.1(a) of the TPA, Claimants are qualified to commence this arbitration against Colombia if Colombia has: (1) breached any (or all) of the obligations identified under Section A of the TPA, and/or (2) breached an “investment agreement.” Specifically, Article 10.16.1(a) of the TPA provides, inter alia, that:
[i]n the event that a disputing party considers that an investment dispute cannot be settled by consultation and negotiation: (a) the claimant105, on its own behalf, may submit to arbitration under this Section a claim (i) that the respondent has breached (A) an obligation under Section A106 . . . or (C) an investment agreement; and (ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach . . . .
110. Article 10.28 defines “investment” as:
every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital and other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include: (a) an enterprise; (b) shares, stocks, and other forms of equity participation in an enterprise; (c) bonds, debentures, other debt instructions, and loans; (d) futures, options, and other derivatives; (e) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts; (f) intellectual property rights; (g) licenses, authorizations, permits, and similar rights conferred pursuant to domestic law; and (h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens, and pledges.
111. This matter arises directly out of an “investment dispute,” specifically, FPJVC’s rights established under the TPA with respect to its investment in Colombia. Claimant FPJVC is a contractual joint venture and each of its members – Claimant Amec Foster Wheeler USA Corporation and Claimant Process Consultants, Inc. – are corporations organized under the laws of the State of Delaware, United States of America, so that Claimants are an “enterprise of a Party” within the meaning of the TPA.
105 Article 10.28 of the TPA defines “claimant” as “an investor of a Party that is a party to an investment dispute with another Party”; “an investor of a Party” is defined as, inter alia, “a national or an enterprise of a Party, that attempts through concrete action to make, is making, or has made an investment in the territory of another Party;” and “enterprise of a Party” is defined as “an enterprise constituted and organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there.” (CL-001) ↩
106 Section A of the TPA affords various rights and protections to Claimants, which include, for purposes of this Arbitration, National Treatment (Article 10.3), Most-Favored-Nation Treatment (Article 10.4), Minimum Standard of Treatment (Article 10.5), and Expropriation and Compensation (Article 10.7). (Id.). ↩
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112. Claimants contracted with Reficar, a Colombian State-owned enterprise, to provide project management services in connection with the construction and expansion of an oil refinery owned by Colombia to supply environmentally clean motor fuels to meet Colombian demand. In doing so, Claimants invested significant amounts of time, capital, personnel, and labor in Colombian territory. These acts were done with the expectation that Claimants would return a profit. The Contract also created rights, both tangible and intangible, to a contractual benefit having economic value to Claimants. As such, Claimants are “investor[s] of a Party” and have made an “investment” under the TPA.107
113. The TPA requires Colombia to, among other things: (1) afford Claimants and their investment, in like circumstances, treatment no less favorable than that it accords its own investors or its investments; (2) treat Claimants in accordance with customary international law, including fair and equitable treatment, which expressly encompasses the obligation not to deny justice; (3) to not expropriate Claimants’ covered investment either directly or indirectly; and (4) afford Claimants and their investments treatment no less favorable than it affords to third parties and their investments. This dispute concerns Colombia’s violations of these obligations to Claimants under the TPA. While FPJVC need not show a likelihood of success on those claims at this point, the discussion above makes it clear that FPJVC has a strong case that its rights were violated and that it is likely to succeed on the merits of its claims. Indeed, the tribunal in Glencore granted claimant an award equal to the biased fiscal liability award previously paid by the claimant to the CGR.108 Here, Claimants seek an offsetting award in the amount of the CGR Decision.
114. Additionally, the Contract is an “investment agreement," as defined by the TPA, because Reficar is “a national authority of a Party.” It is wholly owned by Ecopetrol, a Colombian entity controlled by the Ministry of Mines and Energy. Indeed, the claim that FPJVC has harmed the national patrimony by breach of the Contract is an implicit admission that it is an investment
107 The TPA provides, in the definitions that form a part of Article 10, that “investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include . . . (e) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts. . . .” Of course, the CGR contends that the Contract falls precisely within that definition. ↩
108 Glencore, ICSID Case No. ARB 16/6, Award, ¶ 1587 (Aug. 27, 2019) (CL-005). ↩
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agreement.109 Therefore, Respondent’s breach of the Contract, in addition to, and notwithstanding the above, entitles Claimants to submit a claim to arbitration under Article 10.16.1(a)(i)(C) of the TPA.110
115. Claimants consented to arbitration in accordance with the procedures set forth in Chapter 10 of the TPA when they submitted their Request for Arbitration. FPJVC has taken all necessary internal actions to authorize the commencement of this arbitration.111 Claimants satisfy all jurisdictional requirements to bring this arbitration under the ICSID Convention and the ICSID Arbitration Rules as both the United States and Colombia are Contracting States to the ICSID Convention.112 In this regard, Article 25(1) of the ICSID Convention provides:
The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.
116. Claimants have satisfied all notice and time requirements to submit a claim to arbitration under the TPA. Six months have elapsed since the events giving rise to this claim. Less than three years have elapsed from the date on which the Claimants first acquired knowledge of the breaches, and the resulting damages from same, under Article 10.16.1 of the TPA. The Claimants and Respondent attempted, unsuccessfully, to resolve the dispute through consultation and negotiation and the required waiting period after submitting Claimants’ notice of its intention to submit the claim to arbitration concluded prior to Claimants filing the Request for Arbitration.
110 The Contract also comes with the Umbrella Clause of the Bilateral Investment Treaty between Switzerland and Colombia, which is incorporated into the TPA through its Most Favored Nation clause. ↩
111 Claimants’ Power of Attorney, Waiver, and Authorization to Commence Arbitration (C-010). ↩
112 See ICSID, Database of ICSID Member States, available at https://icsid.worldbank.org/en/Pages/about/Database-of-Member-States.aspx (indicating that Colombia signed the ICSID Convention on May 18, 1993, with the Convention entering into force for Colombia on Aug. 14, 1997; and that the United States signed the ICSID Convention on Aug. 27, 1965, with the Convention entering into force for the United States on Oct. 14, 1966). ↩
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117. As stated previously, Claimants seek provisional measures to protect their rights to: (1) an exclusive remedy, and (2) the preservation of the status quo and the non-aggravation of the dispute. The standard for Claimants to obtain provisional measures is the showing of a “theoretical right.” As the ICSID tribunal discussed in the Victor Pey Casado Decision on Provisional Measures, requiring a claimant to demonstrate that the right to be preserved exists at this juncture could force a tribunal to prejudge the merits, at a time when it is not in the position to judge, and under hypotheses in which the evidence or proof of the existence of the right invoked could not be provided until later by means of the arbitration award on the merits.113
118. Notwithstanding, as set out above in Section III.A., ICSID tribunals have consistently ruled that they are empowered to issue provisional measures to preserve procedural rights relating to the fair and effective conduct of the arbitration, as well as to the parties’ rights to maintain the status quo and the non-aggravation of the dispute pending its resolution through a final award.114 It is likewise recognized, as detailed above, that the parties to an ICSID arbitration have a right to a single, exclusive remedy relating to the dispute pursuant to Article 26. This right that would be prejudiced by the enforcement of a domestic penalty in a parallel proceeding like the CGR proceedings in Colombia.
119. ICSID tribunals typically do not consider the merits of the case when determining whether to grant provisional measures. The few tribunals that have considered the validity of the underlying allegations have required only that the claimant plead a facially plausible case.
120. In Paushok, for example, the UNCITRAL tribunal explained that it “need not go beyond whether a reasonable case has been made which, if the facts alleged are proven, might lead
113 Victor, ICSID Case No. ARB/98/2, Decision on Provisional Measures, ¶ 48 (CL-016). ↩
114 See, e.g. Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case No. ARB/12/14 and 12/40, Procedural Order No. 14 (Procedural Measures), ¶ 71 (Dec. 22, 2014) (CL-028) (“[i]t is well settled that provisional measures may be recommended to protect the rights to the status quo and to the non-aggravation of the dispute, which are self-standing rights vested in any party to the ICSID proceedings.”); see also Quiborax, ICSID Case No. ARB/06/2, Decision on Provisional Measures, ¶¶ 134-136 (CL-012); Occidental, ICSID Case No. ARB/06/11, Decision on Provisional Measures, ¶ 96 (CL-019). ↩
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the Tribunal to the conclusion that an award could be made in favor of the Claimants.”115 That is, “the Tribunal needs to decide only that the claims made are not, on their face, frivolous or obviously outside the competence of the Tribunal.”116 This is because “[t]o do otherwise would require the Tribunal to proceed to a determination of the facts and, in practice, to a hearing on the merits of the case, a lengthy and complicated process which would defeat the very purpose of interim measures.”117 Similarly, in PNG SDP v. Papua New Guinea, the ICSID tribunal considered the prima facie strength of the parties’ respective claims but cautioned “that analysis should not pre-judge the merits of the case.”118 The tribunal further concluded that “[i]n practice, the requirement to demonstrate the prima facie success on the merits will ordinarily lead to a rejection of a request for provisional measures only in rare circumstances, where the requesting party has failed to advance any credible basis for its claims.”119
121. Here, the factual and legal bases for the Application far exceed the establishment of Claimants’ prima facie case on the merits. The disputed CGR Charge and Decision against Claimants was the result of a deeply flawed process that violated Claimants’ right to due process every step of the way.
122. To begin with, the CGR’s exercise of jurisdiction and assertion of charges – and subsequent findings in the CGR Decision – against Claimants denied Claimants fair and equitable treatment and violates Article 10.5 of the TPA, which expressly encompasses protection from denial of justice.120 Respondent, through the CGR, denied Claimants justice by, inter alia: (1) concluding that FPJVC was a “fiscal manager” under Article 3 of Law 610 and thereby asserting jurisdiction over FPJVC in a fiscal liability proceeding without any basis in fact or in law; (2) failing in the first instance to articulate (or attempt to articulate) viable or comprehensible –
115 Paushok, UNCITRAL, Order on Interim Measures, ¶ 55 (CL-025). ↩
116 Id.; see also City Oriente Limited v. The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No. ARB/06/21, Decision on Revocation ¶ 20 (May 13, 2008) (CL-0029) (“the party requesting the measure need only prove that its claim has the appearance of good right, fumus boni iuris, or, in other words, the petitioner must prove that the rights invoked are plausible”). ↩
117 Paushok, UNCITRAL, Order on Interim Measures, P 55 (CL-025). ↩
118 PNG Sustainable Development Program Ltd. v. Independent State of Papua New Guinea, ICSID Case No. ARB/13/33, Decision on Claimant Request for Provisional Measures, ¶ 120 (Jan. 21, 2015) (CL-030). ↩
120 See Request for Arbitration at Section V.A. ↩
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theories of liability, causation, and damages against FPJVC, as required by Article 5 of Law 610; (3) claiming damages against FPJVC that are arbitrary and grossly disproportionate to the alleged harm caused by FPJVC; and (4) subjecting FPJVC to conflicting directives of its instrumentalities, Reficar, the PGN, and the CGR, in violation of the harmonious collaboration principle in Article 113 of the Colombian Constitution.121
123. Colombia frustrated FPJVC’s ability to defend itself by refusing to allow FPJVC more than five days to file its formal Appeal of the lengthy CGR Decision – which is over 6,200 pages, encompasses over four years of proceedings, and includes legal arguments and damage methodologies previously undisclosed to FPJVC – and now prepares to enforce it. As mentioned earlier, in the CGR Decision, the CGR, among other things: (1) still does not identify the elements of fiscal liability required to establish jurisdiction over FPJVC, nor does the CGR articulate viable or comprehensible theories of liability to hold FPJVC responsible for any of the State’s purported damages; (2) has retroactively applied Decree 403 to FPJVC’s fiscal liability proceeding, when FPJVC based its fiscal liability proceeding defenses on Law 610; and (3) materially revised its damages methodology and applied a fundamentally flawed damages quantification, leaving FPJVC unable to fully understand the CGR Decision and respond and defend itself accordingly.
124. Colombia has also breached the National Treatment standard under Article 10.3 of the TPA. For example, the CGR dismissed the Charges against members of the Ecopetrol Board of Directors, all of whom are Colombian nationals, on the grounds that those members did not qualify as “fiscal managers” under Law 610, despite their involvement in the Change Control approval process, participation on the team that supported Reficar, and significant authority and control over Project expenditures – all unlike FPJVC.122 Nonetheless, the CGR provided a detailed explanation as to why the directors were not fiscal managers, concluding that, because definitive decision-making authority was vested in Reficar, the directors were not within the CGR’s competence. The CGR refused to dismiss FPJVC on that same legal theory, offering only a conclusory statement
121 See id. at Section V.A.1; Claimants have further pleaded that Respondent failed to provide fair and equitable treatment to Claimants by failing to: (1) provide FPJVC with a fair and equal opportunity to present its case, to marshal appropriate evidence, and to be heard; (2) provide FPJVC with proper notice regarding the reasons for the Charges; and (3) act in a reasoned, even-handed, and unbiased manner in the course of the fiscal liability proceeding, including demonstrating bias at the outset of the investigation phase through negative media coverage of FPJVC. Claimants also pleaded that Respondent’s actions frustrated Claimant’s legitimate expectations and that their alleged damages improperly seek a double recovery. See id. at Section V.A.1-3. ↩
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that the cases were different. The result was that FPJVC, a foreign investor, was granted less favorable treatment than that accorded to Colombian nationals, and the company for which they worked, Ecopetrol, an investor in Reficar.123
125. Colombia also deprived FPJVC of the fundamental protections in the Contract and indirectly expropriated its benefits in violation of Article 10.7 of the TPA.124 As detailed above, the Contract specifically provided FPJVC two critical protections that Colombia ignored: [Redacted]
[Redacted]
[Redacted]
[Redacted] Claimants have also pleaded, inter alia, that Colombia’s violation of the Contract amounts to a violation of both the most favored nation guarantee in Article 10.4 and Article 10.16 of the TPA, which permits an investor to bring a claim for breach of an Investment Agreement, as defined by the TPA.125
126. Provisional measures are “necessary” when, in the absence of such measures, the requesting party would suffer “irreparable loss.”126 Irreparable loss has been defined to mean, as described in Perenco v. Ecuador, “where action by one party may cause loss to the other which may not be capable of being made good by an eventual award of damages.”127 This standard of necessity has been widely adopted by ICSID tribunals and, as explained in Hyrdo v. Albania, is embodied in Article 17A of the UNICTRAL Model Law, which requires the tribunal to be satisfied that:
Harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially
126 Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ 43 (CL-021); see also Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 79 (CL-015) (“The Respondents are right in pointing out that a number of investment tribunals have required irreparable harm in the sense of harm not compensable by monetary damages.”). ↩
127 Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ 43 (CL-021). ↩
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outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted.128
127. Similarly, the ICSID tribunal in Occidental v. Ecuador recognized the appropriateness of provisional measures to “avoid irreparable harm.”129
128. Some ICSID tribunals, as in City Oriente, while also referring to Article 17A of the UNCITRAL Model Law, have explained that standard by placing emphasis on evaluating whether the harm avoided by the measures sought significantly will outweigh any harm suffered by the party enjoined, stating:
It is not so essential that provisional measures be necessary to prevent irreparable harm, but that the harm spared the petitioner by such measures must be significant and that it exceeds greatly the damage caused to the party affected thereby.130
129. Similarly, in Burlington, the tribunal found it appropriate to adopt the standard of “harm not adequately reparable by an award of damages” while “also weigh[ing] the interests of both sides.”131
130. Furthermore, FPJVC also need not show that the irreparable harm is certain to occur. Instead, it is sufficient show only that there is a “material risk” that the harm will occur. As stated by the ICSID tribunal in PNG SDP v. Papua New Guinea:
The requirement of showing material risk does not, however, imply a showing of any particular percentage of likelihood, or probability, that the risk will materialize. The proper requirement is that the requesting party must establish the existence of a sufficient risk or threat that grave or serious harm will occur if provisional measures are not granted.132
131. [Redacted]
128 Hydro, ICSID Case No. ARB/15/28, Order on Provisional Measures, ¶ 3.31 (CL-009); see also Article 17A(1)(a) of the UNCITRAL Model Law (CL-031). ↩
129 Occidental, ICSID Case No. ARB/06/11 Decision on Provisional Measures, ¶ 61 (CL-019). ↩
130 City Oriente, ICSID Case No. ARB/06/21, Decision on Revocation, ¶ 72 (CL-029). ↩
131 Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 82 (CL-015). ↩
132 PNG, ICSID Case No. ARB/13/33, Decision on Claimant Request for Provisional Measures, ¶ 111 (CL-030). ↩
133 CWS-2, Steve Conway at ¶ 12; CWS-3, Thomas Grell at ¶ 12. ↩
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[Redacted] There can be no question that, no matter the standard employed, FPJVC will undoubtedly suffer grave and irreparable harm absent interim measures, and any harm or inconvenience to Colombia would be minimal at most.
132. Tribunals hearing investor-state claims frequently grant provisional measures to restrain sovereign States from enforcing disputed court judgments, fines, taxes and penalties finding that, in the absence of the interim measures, the investor would suffer irreparable harm – and that the prevention of such harm was necessary to preserve the status quo of the arbitration pending a final ruling on the merits. For example, in Chevron v. Ecuador, the tribunal issued interim measures to restrain Ecuador from enforcing a third-party judgment issued by Ecuadorian courts. Similar to FPJVC, Chevron alleged the judgment was “tainted by . . . serious due process violations” and breached Ecuador’s obligations to Chevron to provide fair and equitable treatment under the Treaty between the United States of America and the Republic of Ecuador concerning the Encouragement and Reciprocal Protection of Investment.134
133. In Chevron, which proceeded under the UNCITRAL Rules, the tribunal originally granted Chevron’s request for interim measures prior to the issuance of the Ecuadorian judgment ordering the parties to “maintain . . . the status quo and not to exacerbate the procedural and substantive disputes” and “to refrain from any conduct likely to impair or otherwise adversely affect, directly or indirectly, the ability of the Tribunal to address fairly any issue raised by the Parties before [the] Tribunal.”135 The tribunal further stated that “[i]f it were established that any judgment . . . was a breach of an obligation [Ecuador] owed to the Claimants as a matter of international law[,] . . . any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which [Ecuador] would be responsible to the Claimants under international law.”136 But once the domestic court in Ecuador issued a multi-billion dollar
134 Chevron Corp. v. Republic of Ecuador, PCA Case No. 2009-23, First Interim Award on Interim Measures, ¶ 9.1 (Jan. 25, 2012) (CL-032). ↩
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judgment137 against Chevron, the tribunal was prompted to “confirm and reissue” its previous order, and instructed Ecuador “to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment against [Chevron].”138 The tribunal also required Ecuador “to inform [the] Tribunal . . . of all measures which the Respondent has taken for the implementation of [the] Interim Award.”139
134. The ICSID tribunal in Bayindir v. Pakistan enjoined the Pakistan National Highway Authority (“NHA”), who sought a judgment from the Turkish courts, seeking to cash a US$196 million bank guarantee that had been provided by the investor. Upon application for interim measures by the investor, the tribunal issued an order “recommend[ing] that Pakistan take whatever steps may be necessary to ensure that NHA does not enforce any final judgment it may obtain from Turkish courts with regard to the Mobilisation Advance.”140
135. In Merck v. Ecuador, the claimant sought interim measures to prevent enforcement of a US$150 million dollar judgment it claimed was the result of a denial of justice and various other breaches of the Bilateral Investment Treaty between the United States of America and Ecuador, including, inter alia, “fair and equitable treatment . . . full protection and security . . . and the prohibition of arbitrary or discriminatory measures.”141 The claimant, like FPJVC, argued that, without the interim measures, the judgment exposed it to “the immediate threat of losing its business in Ecuador.”142 The tribunal granted the provisional measures, instructing Ecuador to “ensure ... that all ... actions directed towards the enforcement of the judgements ... are suspended pending delivery by the Tribunal.”143 In support of this ruling, the tribunal found that the threat
137 The Chevron tribunal originally issued interim measures prior to the issuance of the Ecuadorian judgment, reasoning that “[i]f it were established that any judgment ... was a breach of an obligation [Ecuador] owed to the Claimants as a matter of international law ... any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which [Ecuador] would be responsible to the Claimants under international law.” (CL-032). ↩
140 Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction, ¶ 46 (Nov. 14, 2005) (CL-033). ↩
141 Merck Sharp & Dohme (I.A.) LLC v. The Republic of Ecuador, PCA Case No. 2012-10, Decision on Interim Measures, ¶ 57 (Mar. 5, 2016) (CL-034). ↩
143 Id. at page 26 [The Order]. ↩
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to claimant’s operation in Ecuador was enough to warrant protection, stating that “the consequences, if this worst-case scenario were to eventuate, would be severe enough that protection by way in interim measures is justified.”144 Not only does FPJVC seek protection of its operations in Colombia from asset seizure, but it has a legitimate basis for protecting its business and assets abroad against the threat of enforcement by Colombia.
136. A similar result also occurred in The Electricity Company of Sofia — Belgium v. Bulgaria, a case heard by the Permanent Court of Justice (“PCJ”).145 There, the PCJ ordered Bulgaria to ensure that, during the arbitration proceedings, no further steps would be taken in a local collection action brought by the Municipality of Sofia and that interim measures were necessary “to prevent . . . the performance of acts likely to prejudice . . . the respective rights which may result from the impending judgment.”146
137. In sum, the actions of State judicial and quasi-judicial bodies in violation of the obligation not to breach treaty-imposed requirements to act in a fair and equitable manner and not to deny justice have often been the subject of awards against the state. As the tribunal summarized the law on this point in Dan Cake (Portugual) S.A. v. Republic of Hungary:
The violation of the obligation to treat the investor in a fair and equitable manner took the form of a denial of justice. Arbitral Tribunals have used, in order to characterize judicial decisions as denials of justice, various expressions which all perfectly fit the Metropolitan Court of Budapest’s 22 April 2008 decision: ‘administer[ing] justice in a seriously inadequate way,’ ‘clearly improper and discreditable,’ ‘[m]anifest injustice in the sense of a lack of due process leading to an outcome which offends a sense of judicial propriety . . . .’ The International Court of Justice defined denial of justice as ‘a wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of juridical propriety.’ The decision of the Metropolitan Court of Budapest does shock a sense of juridical propriety.147
145 See The Electricity Company of Sofia and Bulgaria v. Bulgaria, Order on the Request for the Indication of Interim Measures of Protection, 1939 P.C.I.J. (ser. A/B) No. 79 (Dec. 5, 1939). Available at http://www.worldcourts.com/pcij/eng/decisions/1939.12.05_electricity.htm. ↩
147 ICSID Case No. ARB/12/9, Award on Jurisdiction ¶ 146 (Aug. 24, 2015). (CL-035). ↩
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138. Here, too, the actions of the CGR are similarly “shocking”, and FPJVC has established far more than a prima facie right to relief.
139. ICSID tribunals do not require that a claimant show it is in danger of losing its entire operation for provisional measures to be necessary, although that is the case here. Indeed, ICSID tribunals have held that provisional measures are also “necessary” to preserve the contractual rights agreed upon by the parties – like the Contract between Reficar and FPJVC.
140. For example, the tribunal in City Oriente determined provisional measures were “necessary to preserve Claimant’s rights . . . to have the Contract performed pursuant to its original terms and conditions.”148 There, the claimant, who had entered into a concession agreement with Ecuador for the production of hydrocarbons, alleged that a recently enacted Ecuadorian law (Law No. 2006-42 or “Law 42”) unilaterally modified the contract, requiring it to pay amounts not contemplated by the contract’s original terms. Specifically, Ecuador had enacted Law 42 mandating that all oil companies operating in Ecuador under oil production-sharing contracts pay at least 50% of the revenues obtained over a certain base price of oil. In October 2007, an Executive Decree set that percentage at 99% of revenues. Given the drastic ramifications of Law 42, the claimant commenced ICSID arbitration against Ecuador to protect its rights under the production sharing contracts.
141. After noting that the parties disagreed whether the law at issue actually modified the parties’ agreement, the tribunal determined that “pending a decision on this dispute, the principle that neither party may aggravate or extend the dispute or take justice into their own hands prevails.”149 The tribunal ordered respondents “to continue to comply with . . . the Contract, as it was executed, and . . . to refrain from declaring its termination or otherwise modifying its content.”150
148 City Oriente, ICSID Case No. ARB/06/21, Decision on Provisional Measures, ¶ 57 (CL-023). ↩
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142. Tribunals have ordered the discontinuance of underlying, parallel proceedings when such proceedings risk aggravating the arbitration. For example, in both Burlington Resources v. Ecuador and Perenco v. Ecuador, investors, similar to the investors in City Oriente, sought relief in ICSID from Ecuadorian Law 42 and Ecuador’s attempts to seize investor assets to satisfy amounts due under the disputed law.
143. In Burlington Resources, for example, after the investor commenced the ICSID arbitration, Ecuador initiated proceedings to seize the claimant’s oil production. The tribunal in Burlington found that these oil seizures were “bound to aggravate the present dispute”151 and ultimately decided that interim measures were necessary to prevent “the destruction of an ongoing investment”152 and the “obvious economic risk that [the business] will cease operating altogether.”153 Ecuador was then ordered to “discontinue the proceedings” against the investor and to the “refrain from any conduct that may lead to an aggravation of this dispute until the Award. . . .”154
144. In Perenco v. Ecuador, Ecuador demanded that Perenco satisfy payments, worth US$327 million, in compliance with Ecuadorian law 42 law or risk imminent seizure of its assets. In granting Perenco’s request for provisional measures, the tribunal concluded that “the seizure of Perenco’s assets ... would seriously aggravate the dispute between the parties and jeopardise the ability of Perenco [to perform under its contract].”155 And given the particularly urgent nature of the dispute in Perenco, the tribunal also issued an emergency temporary provisional measures pending the resolution of the provisional measures application, specifically instructing “the parties to refrain from initiating or continuing any action or adopting any measure which may, directly or
151 Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 65 (CL-015). ↩
155 Notably, Ecuador argued that provisional measures were not “necessary” because Perenco could “simply mak[e] the enhanced payments required by Law 42” along with challenging “the [enforcement notices] in the Ecuadorian courts.” The tribunal, however, rejected this argument, stating Ecuador’s “resort to that process violates Article 26” and that “Perenco would violate the Article if it were, in the domestic courts of Ecuador, to advance the arguments which it will rely on in this arbitration to challenge the recoverability of payments demanded....” (Id.) ↩
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indirectly, modify the status quo between the parties ... including any attempt to seize any asset of [Perenco] ... until it has had an opportunity to further hear from the parties on the question of provisional measures.”
145. As a final example, in Ceskoslovenska Obchodni Banka, A.S. v. Slovak Republic, the ICSID tribunal ordered the Slovak Republic to suspend bankruptcy proceedings then pending in its courts because those proceedings might include determinations relating to claims under a contract between the claimant, CSOB and the respondent, the Slovak Republic, and thus might “deal with matters under consideration by the Tribunal in the instant arbitration.”156
146. Absent provisional measures, the Claimants will undoubtedly suffer “irreparable loss.” [Redacted]157 [Redacted] zed.158 [Redacted]159
147. Without provisional measures, [Redacted] and no award by the Tribunal will adequately compensate Claimants’ damages – which is the very definition of irreparable harm.160 [Redacted]
[Redacted]
[Redacted]
[Redacted]
156 Ceskoslovenska Obchodni Banka, A.S. v. Slovak Republic, ICSID Case No. ARB/97/4, Procedural Order No. 4, (Jan. 11, 1999) (granting provisional measures to suspend judicial bankruptcy proceedings brought before Slovakian courts, insofar as the proceedings interfered in the dispute submitted to arbitration.) (CL-036). ↩
157 See CWS-2, Steve Conway at ¶ 10; CWS-3, Thomas Grell at ¶ 10. ↩
158 See CWS-2, Steve Conway at ¶ 11; CWS-3, Thomas Grell at ¶ 11. ↩
159 See CWS-2, Steve Conway at ¶ 12; CWS-3, Thomas Grell at ¶ 12. ↩
160 Perenco, ICSID Case No. ARB/08/6, Decision on Provisional Measures, ¶ _ (CL-021). ↩
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[Redacted]
[Redacted]
[Redacted]163
148. ICSID tribunals have also held that irreparable harm existed when the claimants were forced to pay any amounts they should not have otherwise been required to pay. For example, in Alghanim v. Jordan, the tribunal ordered the stay of ongoing Jordanian tax proceedings based on the mere threat that a fine or penalty could result in requiring claimants to pay amounts that the tribunal may later determine were improperly levied.164 Here, of course, the CGR has rendered its decision, meaning that the irreparable harm to FPJVC is far more imminent than what occurred in Alghanim v. Jordan.
149. Without interim measures, FPJVC would also be stripped of their rights under the Contract. The Contract provided FPJVC two critical protections in which they relied upon when investing in Colombia: (1) [Redacted]; and (2) [Redacted]
[Redacted]
[Redacted]165 These protections agreed to by Reficar, an entity owned by Colombia, were flouted by Colombia through the CGR proceeding, and are now in danger of being rendered completely worthless should Colombia collect on the US$811 million dollar decision. [Redacted]
[Redacted] To preserve the status quo and to prevent irreparable harm, interim measures are needed.
164 Alghanim v. Hashemite Kingdom of Jordan, ICSID Case No. ARB/13/38, Provisional Measures Order, ¶ 86 (Nov. 24, 2014) (CL-037). ↩
165 Contract, § 10.1 (C-005). ↩
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150. This matter is urgent because the question, as Professor Schreuer puts it, “cannot await the outcome of the award on the merits.”166 A similar standard was provided by the Biwater Gauff v. Tanzania tribunal in its order on provisional measures:
In the Arbitral Tribunal’s view, the degree of ‘urgency’ which is required depends on the circumstances, including the requested provisional measures, and may be satisfied where a party can prove that there is a need to obtain the requested measures at a certain point in the procedure before the issuance of an award.167
151. As described throughout this Application, measures are urgent to preserve the status quo and to protect the Parties’ right to an exclusive remedy. These rights will be immediately lost if Colombia proceeds to enforce the CGR Decision before this Tribunal reaches its determination on the merits of Claimants’ underlying claims. As the tribunal stated in Burlington Resources v. Ecuador, “[i]ndeed, when the measures are intended to protect against the aggravation of the dispute during the proceedings, the urgency requirement is fulfilled by definition.”168
152. The threat of harm to FPJVC is imminent. Under Colombian procedures, the CGR Decision is final and enforceable with immediate effect.169 FPJVC has exhausted all viable options to prevent the enforcement of the CGR Decision, and these efforts have been unsuccessful. To the extent any local remedies to prevent enforcement of the CGR Decision remain pending or unresolved, these matters will only, at most, temporarily suspend the enforcement of the CGR Decision.170 Once the Appeal was summarily denied,171 the CGR Decision became fully enforceable and nothing, under Colombian law, will prevent Colombia from immediately taking steps to commence enforcement proceedings in Colombia or in any foreign jurisdiction.172
166 Christoph Schreuer, “The ICSID Convention: A Commentary” 775 (2d. 2009) (CL-027). ↩
167 Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Procedural Order No. 1, ¶ 76 (Mar. 31, 2006) (CL-038). ↩
168 Burlington, ICSID Case No. ARB/08/5, Procedural Order No. 1, ¶ 74 (CL-015). ↩
169 CWS-1, Cesar Torrente at P 11. ↩
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153. Indeed, FPJVC has requested that Colombia agree to either a stay of enforcement of the CGR Decision pending the resolution of this arbitration or, at a minimum, a temporary stay of enforcement until this Application could be decided. However, as previously discussed, Colombia has refused to a stay, and is certain to immediately commence enforcement proceedings in Colombia, and in any foreign jurisdiction in which FPJVC has assets, now that the CGR Decision is final.173 In fact, under Colombian law, the CGR is required to immediately take any and all actions necessary to completely satisfy the US$811 million CGR Decision and it may commence the Colombian proceedings simultaneously with any similar proceedings initiated abroad. Thus, because the CGR Decision has become final, the Tribunal can reasonably expect Colombia to commence enforcement actions immediately.174
154. In Colombia, the enforcement proceedings will be initiated by the Deputy Comptroller of the CGR and the subject of these proceedings will be limited to ascertaining the extent of Claimants’ ability to satisfy the Decision without consideration of any defenses FPJVC may have to the CGR Decision’s enforcement.175 Thus, the Tribunal can similarly expect Colombia to begin its collection efforts imminently now that the CGR Decision has been affirmed – and certainly long before Tribunal renders its final award on the merits.176
155. The mere threat of recognition or enforcement proceedings, by itself, warrants urgent relief. Under similar circumstances, the tribunal in City Oriente determined that urgent relief was warranted, stating:
[T]he passing of the provisional measures is indeed urgent, precisely to keep the enforced collection or termination proceedings from being started, as this operates as a pressuring mechanism, aggravates and extends the dispute and, by itself, impairs the rights which Claimant seeks to protect through this arbitration. Furthermore, where, as is the case here, the issue is to protect the jurisdictional powers of the tribunal and the integrity of the arbitration and the
175 Id. at ¶¶ 8 n.3-n.4, 33. ↩
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final award, then the urgency requirement is met by the very own nature of the issue.177
156. Given the urgency of that matter, the City Oriente tribunal ordered emergency temporary provisional measures pending the resolution of the provisional measures application.178 The same rationale should be applied here and, specifically, the Tribunal should order emergency temporary provisional measures directing Respondent not to take any further steps to enforce the CGR Decision in order to ensure that enforcement does not occur before the Tribunal rules on this Application.
157. The Tribunal is “called upon to weigh the balance of inconvenience in the imposition of interim measures upon the parties.”179 The provisional measures sought herein are certainly proportional, given that Respondent would suffer little to no harm.
158. At most, Respondent will have to wait for the conclusion of these ICSID proceedings before enforcing the CGR Decision, assuming that it could somehow prevail on the merits. Substantial time has already elapsed prior to the commencement of the proceedings, and any harm dealt to Colombia would simply be the passing of more time until it can enforce the CGR Decision. This harm, if any, pales in comparison to the harm that Claimants would endure – [Redacted] Moreover, because the CGR Decision is joint and severable, the CGR will be free to pursue the other respondents, none of whom has sought similar relief.
159. A similar rationale was applied in Alghanim v. Jordan where, as mentioned above, the tribunal granted the claimant’s request for provisional measures and stayed ongoing Jordanian tax proceedings. There, the only potential prejudice identified by the respondent was a delay in prosecuting its claims against the claimants while awaiting the conclusion of the ICSID arbitration. The majority, however, found that there could “be no prejudice in a suspension of the [proceedings] as against the Respondents that cannot be compensated by additional interest.”180 The majority concluded that, because the potential harm to the claimant was the imposition of an unlawful tax,
177 City Oriente, ICSID Case No. ARB/06/21, Decision on Provisional Measures, ¶ 69 (CL-023). ↩
179 Paushok, UNCITRAL, Order on Interim Measures, ¶ 79 (CL-025). ↩
180 Alghanim, ICSID Case No. ARB/13/38, Provisional Measures Order, ¶ 89 (CL-037). ↩
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“the harm that would be occasioned to Claimants in the event that the order were not granted outweighs the delay that will be occasioned to Respondent in the prosecution of its claim against them. . . .”181
160. Unlike in Alghanim v. Jordan, Claimants are not seeking to enjoin the underlying proceeding, because it has already concluded. Instead, the remedy Claimants seek is to suspend Colombia’s enforcement of the CGR Decision that was a byproduct of the proceedings that, as Claimants contend, was conducted in an unlawful and unjust manner that deprived FPJVC of its due process rights and violated the TPA. No rights of Colombia will be negatively impacted or lost if this Tribunal ordered Colombia to suspend enforcement of the CGR Decision against Claimants or, at most, the harm to Colombia could be compensated by an award of additional interest. [Redacted]
[Redacted] It is for these reasons that Claimants also seek emergency temporary relief prohibiting Respondent from taking any such steps to enforce the CGR Decision pending the Tribunal’s decision on this Application.
161. For the reasons set forth herein, Claimants respectfully seek the following emergency temporary provisional measures:
162. Claimants also respectfully request that the Tribunal order the following provisional measures:
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Dated: September 2, 2021
Respectfully submitted,
PILLSBURY WINTHROP SHAW PITTMAN LLP
By:
Signature
Robert L. Sills
Ari M. Berman
31 West 52nd Street
New York, New York 10019
Tel: +1 (212) 858-1000
[email protected]
[email protected]
By:
Signature
Charles C. Conrad
Richard D. Deutsch
Two Houston Center
909 Fannin, Suite 2000
Houston, TX 77010
Tel: +1 (713) 276-7600
[email protected]
[email protected]
Counsel for Claimants