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THE INTERNATIONAL CENTRE FOR THE SETTLEMENT OF
INVESTMENT DISPUTES

VIDEOCONFERENCE: HEARING ON PROVISIONAL MEASURES

Volume 1

Thursday, November 4, 2021

The World Bank Group

The hearing in the above-entitled matter

came on at 9:24 a.m. (EDT) before:

MR. JOSÉ EMILIO NUNES PINTO, President

MR. JOHN BEECHEY, Arbitrator

PROF. MARCELO G. KOHEN, Arbitrator

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ALSO PRESENT:

ICSID Secretariat:

MS. MARISA PLANELLS-VALERO
Secretary to the Tribunal

Court Reporter:

MR. DAVID A. KASDAN
Registered Diplomate Reporter (RDR)
Certified Realtime Reporter (CRR)
Worldwide Reporting, LLP
529 14th Street, S.E.
Washington, D.C. 20003
United States of America

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APPEARANCES:

Attending on behalf of the Claimants:

MR. ROBERT L. SILLS
MR. DEREK SOLLER
MS. KRISTINA FRIDMAN
MR. MARTIN RUIZ GARCIA
Pillsbury Winthrop Shaw Pittman, LLP
31 West 52nd Street
New York, New York 10019
United States of America

MR. CHARLES C. CONRAD
MR. RICHARD DEUTSCH
Pillsbury Winthrop Shaw Pittman, LLP
Two Houston Center
909 Fannin, Suite 2000
Houston, Texas 77010
United States of America

Client Representatives:

MR. TIMOTHY LANGAN

MS. CATALINA NIÑO

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APPEARANCES: (Continued)

On behalf of the Respondent:

MS. ANA MARÍA ORDOÑEZ
MS. ELIZABETH PRADO
MR. JUAN SEBASTIÁN RIVERA (intern)
Agencia Nacional de Defensa Jurídica del
Estado, República de Colombia

MRS. CLAUDIA FRUTOS-PETERSON
Curtis, Mallet-Prevost, Colt & Mosle, LLP
1717 Pennsylvania Avenue, NW
Suite 1300
Washington, D.C. 20006
United States of America

MS. ELISA BOTERO
Curtis, Mallet-Prevost, Colt & Mosle, LLP
101 Park Avenue
New York, New York 10178
United States of America

MR. FERNANDO ANDRÉS TUPA
MR. JUAN JORGE
Curtis, Mallet-Prevost, Colt & Mosle, LLP
Marcelo Torcuato de Alvear
684 Piso 1
Buenos Aires, C1058AAH
Argentina

MS. MARIA PAULINA SANTACRUZ SALAZAR
Curtis, Mallet-Prevost, Colt & Mosle, LLP
Calle 71, NO. 11-10 oficina 701
Bogotá, Bogotá 110221
Republic of Colombia

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P R O C E E D I N G S

PRESIDENT NUNES: Good morning or good afternoon to everybody. This is the Hearing on Provisional Measures in case ICSID ARB/19/34.

Before we move on, I would like to ask Claimants' representation to introduce itself, please.

MR. SILLS: Thank you, Mr. President, and our apologies for these technical difficulties. I am Robert Sills with the Pillsbury firm on behalf of Claimants, the other active participant--

(Sound interference.)

MR. SILLS: Next time we're going to make sure to have a teenager in the room, and this will all go well.

With me is my colleague, Charles Conrad. He and I will be making the presentation today. Also with us in the room, hearing room, our colleagues Richard Deutsche, Kristina Fridman, Derek Soller, and Catalina Niño of our client. Participating remotely is Mr. Timothy Langdan--excuse me, lost my voice for a minute--Mr. Timothy Langdan, who is an attorney with Wood Group.

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ARBITRATOR BEECHEY: Lost the sound.

MR. SILLS: We went on mute. Do you want us to go ahead and proceed with our argument or would you like to introduce the other side?

PRESIDENT NUNES: Sorry?

MR. SILLS: Can you hear us?

PRESIDENT NUNES: Yes. Are you done?

MR. SILLS: We are. We've introduced our entire team here.

PRESIDENT NUNES: Thank you.

Now, Respondent's team could be introduced, please.

DR. FRUTOS-PETERSON: Good morning, Members of the Tribunal. My name is Claudia Frutos-Peterson from Curtis, Mallet-Prevost, Colt & Mosle representing the Respondent together with the Agencia Nacional de Defense Juridica del Estado de Colombia. This morning here with all of you we have Ana María Ordoñez, Elizabeth Prado, Juan Sebastian [Rivera], all of them from the Agencia Nacional de Defense Juridica del Estado. And from Curtis I also have my colleagues Elisa Botero, Fernando Tupa, Maria Paulina Santacruz

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[and] Juan Jorge.

Thank you, Mr. President.

PRESIDENT NUNES: Thank you very much.

Do you have any matters that you would like to draw the attention of the Tribunal? Or we can move on?

MR. SILLS: Mr. President, Robert Sills on the behalf of the Claimants. Of the hour that's been allocated, I would ask the Tribunal's leave to reserve 15 minutes for rebuttal and take 45 minutes for our principal presentation and have that 15 minutes, and, of course, we would have no objection if Respondent was likewise--excuse me--likewise to reserve time.

PRESIDENT NUNES: Mrs. Frutos-Peterson?

DR. FRUTOS-PETERSON: Thank you, Mr. President. We were not planning to do rebuttals. You know, that was not on the Schedule that the Tribunal circulated. We would not mind. So, I think our presentation is around 45 minutes. So, we can reserve the other 15 minutes for rebuttals. We might go slightly over the 45 minutes, but if that's okay with Claimants, then we can proceed under those bases.

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PRESIDENT NUNES: Okay. I assume that my colleagues are in agreement? John?

ARBITRATOR BEECHEY: Yes.

PRESIDENT NUNES: Marcelo?

ARBITRATOR KOHEN: Yes.

PRESIDENT NUNES: Okay. So, we can move on and get started.

Claimants' oral presentation. We did receive your presentation this morning, an hour ago, and I hope Respondent did too.

DR. FRUTOS-PETERSON: I'm sorry to interrupt, Mr. President. We understood the instructions that we will circulate 30 minutes before we present, that's our--we were assuming--

PRESIDENT NUNES: That's 30 minutes, yes, sure. But since we had this almost 30-minute delay starting, it became one hour, okay.

DR. FRUTOS-PETERSON: Okay. Thank you, Mr. President.

PRESIDENT NUNES: So, Claimants, the floor is yours.

OPENING STATEMENT BY COUNSEL FOR CLAIMANTS

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MR. SILLS: Thank you, very much, Mr. President. And, again our apologies for these difficulties.

Before I begin, could I invite the Tribunal to interrupt our presentation at any point with questions. We'd much prefer to address matters on the Tribunal's mind than make a speech, and so we would welcome interruptions and questions and points of clarification.

With that, the first question really is what precisely is the situation with regard to Colombia's efforts to locate, seize and sell assets of the Claimants?

The first position that was taken--if we could have that next slide, please--was set out in Colombia's Rejoinder on the application for emergency relief, and we highlighted the key points in the slide that's now before us, and as you can see, putting to one side the personal attacks on the style with which we've made our presentation, Colombia took an essentially unequivocal position in those papers that they were powerless to conduct a worldwide search for

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assets, seize assets, and sell those assets. And that was a principal--I should say the principal--basis upon which they argued that emergency relief, immediate relief should not be granted.

And the Tribunal, of course, denied that application, our application. I would imagine, in significance part, based on the representations that were made in that Rejoinder as to the extent of Colombia's legal powers and the limitation on those powers.

The next point where Colombia took a position, and a radically different position on its powers, came in their answer on the Application that brings us here today. And that was a radically different story. Having prevailed upon their position that there was no need for emergency relief because we were engaged in what they called an "exercise in creative writing" by suggesting that Colombia was about to embark on a worldwide campaign to seize assets, Colombia then took the position--now takes the position--that, even though the CGR will renew its search for assets, such a search is likely to be

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unsuccessful. Well, that, I think, has to do with the efforts that they're making as opposed to the power to take such steps.

And they go on to say that even if the CGR manages to attach any of Claimants' assets, either in Colombia or abroad, well, again that goes to the representation they're getting to the efforts that they are making, and not to the powers that they denied having just a few weeks ago. If we could have the next slide, please, in what they say is: "The unlikely event that the CGR is able to identify assets owned by Claimants in a foreign jurisdiction, attaching such assets is entirely another matter." It doesn't say they can't do it. Again, they're saying that they will have difficulties in doing that. And I will note that they don't deny that these would be entirely separate proceedings in other jurisdictions, and that's where the bulk of the Claimants' assets are.

Now, attached to the Witness Statement of Mr. Torrente, who in the course of his career was the Chief Legal Officer of the CGR--if we could have that

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slide--there is a slide presentation made by the CGR in public talking about the success they've had in searching for and seizing assets around the world. The entire presentation is attached to his Witness Statement, but we highlight here two slides, one, two case studies showing success in searching for and reaching assets outside of Colombia; and then a chart on the next page, summarizing their efforts and their success.

We also attach as part of our presentation circulated this morning an English-language version of an essentially similar presentation given to the United Nations or an office of the United Nations, by the CGR showing in graphic form the experiences that Colombia's had in seeking out assets and, for example, on the left, freezing authorization of the stocks mentioned.

So, we have three different versions here.

Now, what's at stake--and the value of the Claim has, as set out by Colombia, has jumped around a bit--the current--the current value is roughly USD 800 million, although there are representations in Colombia's

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papers that the amount approaches USD 1 billion, and that USD 800 million is derived by taking the Award in Colombian pesos and converting them at the current Rate of Exchange into U.S. dollars. Whether it's the number in the CGR Award or whether it's the number in Colombia's papers, the amount of money involved is enormous. Now, we venture to say it's the largest Award ever rendered by the CGR by a very substantial margin.

And so, Colombia has obvious incentives to go around the world looking for assets, seize those assets, and convert them into cash. [Redacted]

Now, Colombia's answer, in sharp contradiction to the papers that they submitted on the

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Emergency Application--in the slide that's before us now--admits that they're attempting to collect assets. They say that the proceedings are underway. They say that they will renew their search for assets during the Forced Collection Proceeding, and they've described how they would go about engaging counsel in other countries and commencing proceedings before the judicial or quasi-judicial agencies of those countries in order to seize assets. And so, this chart summarizes Colombia's description of its own avenues for relief and the steps it is taking.

So, the need for relief here is very clear: If Colombia is allowed to go around the world looking for, attaching, seizing and selling the assets of Claimants, [Redacted]

And what's more, it is--(sneezes), excuse me--let me strike that. I apologize.

It has been a commonplace in investor-State disputes, at least since Electricity Company of Sofia, that a Tribunal has power to enjoin enforcement of an

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underlying award. That case, of course, was decided in 1939. In our papers we cite a host of claims, some very celebrated--Chevron versus Ecuador, Merck versus Ecuador--granting precisely the relief we seek here.

So, what are the standards for seeking and obtaining such relief? We have to make a prima facie showing of jurisdiction. We have pleaded our claim. We have clearly established in our pleading that we are an investor with an investment; that our rights to fair and equitable treatment, due process, and National Treatment have been violated.

Now, Colombia claims, at the same time that they say the merits should not be gone into, that they can somehow show that those were not true, but the convention, of course, is to accept those well-pleaded allegations. And here, they're more than well pleaded, they're backed by substantial evidence.

Colombia will have its opportunity on their application for a preliminary decision on preliminary questions, and once, as we expect it will be, that's denied, at the Hearing on the Merits, but that's a question for another day.

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Have we shown a right to relief? We have.

First, to protect the Tribunal's jurisdiction, its exclusive jurisdiction, and our right to an exclusive remedy.

The proceedings that Colombia is threatening to bring around the world, those parallel proceedings before the courts of other countries will cover much of the same ground that this Arbitration does, and so we rely on cases such as the Tokios Tokelés, Burlington Resources versus Ecuador, Plama versus Bulgaria, all of which have established that Provisional Measures are appropriate to preserve the exclusivity of ICSID Arbitration to the exclusion of local administrative or judicial remedies as prescribed in Article 26.

Similarly, in the CSOB Case cited in our papers, the Tribunal ordered the Slovak Republic to suspend pending bankruptcy proceedings because those proceedings might include determinations relating to claims under a contract between CSOB and the Slovak Republic and thus might deal with matters under consideration by the Tribunal in the instant

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arbitration. And since we haven't yet seen those proceedings brought by Colombia that they threaten to bring, we don't know precisely what the contours of those would be, but they would surely include matters that are squarely before this Tribunal.

Now, Colombia argues that Article 26 is irrelevant because the exclusivity of the remedy relates only to the investment dispute. That's just not true. In the cases I have just referred to--and the other cases cited in our papers--make it very clear that parallel proceedings raising essentially identical or overlapping claims are covered.

Second, we're entitled to preserve the status quo. The status quo right now is that there is an award, no assets have yet been seized. As assets are identified and seized, the status quo will change. The office of an injunction against enforcement, and an injunction against--an anti-suit injunction against the bringing of parallel proceedings, is precisely to preserve that status quo. And one would think that if we were to wait until Colombia had succeeded in its campaign of identifying and seizing assets, that we

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would then be told that the status quo required that that seizure be left in place. The closest parallel is the case they rely on so heavily, IBT, where the bonds had been drawn down, and hence we were told--and the Tribunal there found--that it would disturb the status quo to restore them.

So, Colombia's analysis is that, any claim here is either too early because they haven't yet succeeded or presumably too late because they have.

Now, we have to show urgency. We have shown urgency. Urgency in this context doesn't mean the house is on fire. That's the urgency required for an Emergency Application, which this Tribunal--and the Tribunal denied relief there on grounds that there was no immediate threat. The urgency in this context is different. It simply means relief that cannot await the outcome of the Award on the Merits.

So, what would happen absent relief here if Colombia succeeds in the efforts they admit they're making? We have sought an offsetting Award based on what I have to say are almost grotesque violations of due process by the CGR. Whatever they awarded against

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us should be the subject of an offsetting award, just as was the case in the Glencore matter, where, of course, annulment has recently been denied. But if Colombia succeeds in finding and seizing and selling assets [Redacted]

That can't be repaired at that point, so what would happen is that the dispute would vastly expand. Classic example of the aggravation of the dispute between the Parties. A Merits Award is years away, not only because of the pace at which ICSID proceedings typically move, but because of the interposition of Preliminary Objections down to and including a claim that a joint venture, which is a person--an entity capable of suing and being sued under the law that created it, somehow lacks the ability to bring a claim, but those will take time, and the entire proceeding, of course, is frozen while

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those Preliminary Objections are continued.

Urgency is addressed again in cases we have cited and discussed: Burlington Resources, in the Biwater Gauff Case. The rights that we seek preserved here may be effectively destroyed or seriously prejudiced if they're not preserved now pending a final decision.

So, we've met the test of necessity, we've met the test of urgency.

And finally--and I will turn to their principal treaty-based argument in a moment--that the requested measures are proportional. The Measures we request [Redacted]

If Colombia were to prevail, if we were not to succeed on the merits, the Claimants will be there, and Colombia can precede at that point to attempt to collect the Award.

The harm to Colombia is a matter of waiting, assuming for the moment that their claim has merit--their position has merit--and they can be made whole with interest. The disproportionate risk is that absent this relief, [Redacted]

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[Redacted]

Now, the principal argument that Colombia makes under the Treaty is a claim that Section 10.20.8 somehow bars the relief that's sought here, and they rely on the second sentence of that provision.

Could we have that language up?

For the convenience of the Tribunal, we put the relevant language on this slide.

And so their defense turns almost entirely, putting to one side their denial that the ordinary standards have been met, on the meaning of the phrase "application of a measure alleged to constitute a breach referred to in Article 10.16."

So, the enforcement measures that Colombia proposes to take, threatens to take, and according to their most recent submission is in the process of taking, are not applications of a measure alleged to constitute a breach. The breach--the Measures alleged to constitute a breach here and that do constitute a breach are the procedures by which the CGR reached the conclusion that it did and stripped our client of its rights to due process, fair and equitable treatment,

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to National Treatment.

So, for example, at the very outset of this proceeding, one of the Measures we challenged is the assertion that the Claimants were fiscal managers, which, under the Organic Law of the CGR, Law 610, requires that they have the ability to authorize or prevent the expenditure of public funds. And the record is absolutely clear that the Claimants did not have such power, were not within the jurisdiction of the CGR, and that they had a reasonable expectation that they would not be called before the CGR-- let alone subjected to a joint and several award of hundreds of millions of dollars on a theory that there was some sort of promise that this project would be brought in at an estimate provided by another of the respondents.

But putting those merits to one side, if we had appeared before the Tribunal at that point and had asked, in effect, for an order directing Colombia to dismiss the case because our client--our clients were not fiscal managers, that would come within the terms of 10.20.8. Let me go to the end of the proceeding.

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After the CGR rendered its initial decision, some 6,000 pages, an internal review, an internal appeal, actually, was provided for in the CGR rules, and we availed ourselves of that opportunity.

But the CGR allowed all of five days-- later extended to 12 days because they neglected to serve the entire award on our clients and on the other respondents. It's an insult to due process to suggest that a party should have five days to review a 6,000-page award, marshal its proof, put in its papers, and present that appeal. And we requested an extension of time from the CGR and were summarily turned down.

If we had come to the Tribunal at that point and asked for interim relief, directing the CGR to afford a minimally reasonable time to present such an appeal in the interest of due process, again, we do not dispute that that would have constituted an injunction against the application of a measure alleged to constitute a breach.

But this is not that. The CGR case is over, and Colombia is now embarked on a new campaign to

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locate assets, seize those assets, and convert those assets, and that is not a measure alleged to constitute a breach.

Colombia, in effect, is arguing that application of a measure alleged to constitute a breach is something like arising out of or relating to a breach. There is no limiting principle, there is nothing in the text, and there is nothing in the ordinary English meaning of the word "application" that would call for such a conclusion.

What's more, Colombia's own submission here makes it clear that the enforcement efforts that they are now undertaking do not constitute the same proceeding.

This is a slide, a graph, presented by Colombia in its papers describing the enforcement efforts that they are undertaking or will undertake. And the dotted line that goes across the center was put there by Colombia with an arrow on top of the line pointing upwards saying "Fiscal Liability Proceeding," which is now concluded, and an arrow pointing downwards, under the line that they put on that chart,

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that they presented to this Tribunal, saying "Forced Collection Proceedings".

The two are separate and distinct, and this chart makes it absolutely clear that both the figure of speech and the chart we have before you, a line is drawn under the final ruling of the CGR, and we're now embarked--Colombia has now embarked on a new and different phase of its--under which they seek to seize assets, first in the Forced Collection Proceeding that they described, and obviously any efforts to identify assets--identify assets and seize them in other jurisdictions--would obviously come below that line.

And I don't think there can be any serious arguments that an anti-suit injunction against proceedings in other countries that would involve precisely the same issues of which this Tribunal has exclusive jurisdiction are precluded--or I should say simply do not fall within the scope of 10.20.8. There is no bar.

Now, this is not the only point in the Treaty at which the phrase "measure alleged to constitute a breach" occurs. It also occurs in

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Section 10.18--if you could put that up, please--and the text of that section is before us now.

Now, there are two critical points to see here. The first is that the language here used is broader. This is the "fork in the road" provision.

And by initiating arbitration, the Claimants waived their "right to initiate or to continue before any administrative tribunal or court under the law of any Party, or other dispute settlement procedures [and arbitration], any proceeding with respect to any measure alleged to constitute a breach". "With respect to" is broader than "application of," although the two concepts are conflated in Colombia's analysis.

An ordinary canon of construction is that when the drafters of the Treaty use different language, they mean different things. If the drafters of the Treaty had sought to ban anything having any connection, however remote, with a challenged measure, they would have said so.

But in addition, if you go back to Colombia's papers, Colombia expressly says in its current submission that Claimants have the right to

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seek a stay of enforcement before the Contentious Administrative Tribunal in Colombia, a Colombian court. But if their construction of 10.20.8 were correct, that would be a proceeding with respect to a measure. By conceding that Claimants have the right to bring a proceeding in Colombia before the Colombian courts to stay enforcement, they are agreeing that that is not a proceeding, in the words of Section 10.18, "with respect to any measure alleged to constitute a breach" because if it were, it would come within the waiver in the "fork in the road" provision.

And if it's not a proceeding "with respect to any measure alleged to constitute a breach," then it cannot possibly come within the application of any measure alleged to constitute a breach because that is, by definition, narrower. Everyone who does this work understands that "with respect to" is as broad as possible, and the greater includes the lesser.

So, both the way in which Colombia has suggested that there is an alternative remedy in the Colombian courts, and the wording of this section itself make it clear, that the chart they provided is

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correct; that the line they drew is correctly drawn; that the arrows they put on to indicate what was done and what was to be done are correct; and that the enforcement campaign that they're waging is not--does not come within the terms of Article 10.20.8.

Now, there is a lot of talk in the papers that Colombia has submitted about how difficult it is to accomplish what they're trying to accomplish, and the limited success they've had to date.

Now, we know that over a year ago Colombia approached authorities in the United States and the United Kingdom looking for assets, and we know from the papers they've submitted in opposition to this application that they're now doing or about to do that same thing, although they don't disclose which jurisdictions they're going to.

But the fact they haven't had much success, or any success, to date is hardly a reason to deny relief now. If anything, the fact that they say it's extremely difficult and that they may not succeed is an argument for granting approval because it lessens the harm, and it--you know, to the extent

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proportionality were even in question, something they say they were going to have great difficulty doing, shouldn't really cause them much difficulty.

But it doesn't really matter whether they're good at their work or not. The fact is that they are trying. The fact is they may well succeed. The fact is that there are extremely serious challenges to this Award from its very inception to its very conclusion. It's been riddled with due-process violations. It turns upon the retroactive application of a statute broadening the definition of "fiscal manager," enacted long after we raised claims. One might even think that the new statute was aimed specifically at the Claimants here.

This Tribunal has exclusive jurisdiction of those claims. It ought to be allowed to do its work. It ought to continue. And it ought to continue free of Colombia's effort to avoid a decision on the merits by seizing assets and [Redacted]

Mr. President, unless the Tribunal has any questions at this point, that concludes our Opening

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Statement, and with the Tribunal's indulgence, we will reserve the balance of our time for rebuttal.

PRESIDENT NUNES: Thank you very much for your presentation.

Let me ask my colleagues, although we have time allocated for questions at the end of the Hearing, would you by any chance be willing to ask any questions now? John?

ARBITRATOR BEECHEY: Nothing from me at this point, Mr. President.

PRESIDENT NUNES: Thank you.

Marcelo?

ARBITRATOR KOHEN: The same on my side. No questions for the time being.

PRESIDENT NUNES: Okay. So, according to our schedule, we have now a break of 30 minutes. My question is: Do we need to break that long, or could we cut by one half?

MR. SILLS: That's fine with us. 15 minutes is fine with us, Mr. President.

It is fine with us, but the half hour was really for the benefit--well, it benefits both

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Parties, but it's principally for the benefit, I would think, of Colombia, and I would leave it to them whether to ask for the whole half hour or not.

PRESIDENT NUNES: Absolutely. That's why I'm turning to Mrs. Frutos-Peterson.

DR. FRUTOS-PETERSON: Mr. President, 15 minutes will be okay as a break.

I didn't want to interrupt. This is on a different topic. I didn't want to interrupt counsel when he was making his presentation, but I couldn't--I couldn't identify the sources for the slide that they shared with us. I think it's Slide 10 of the presentation. I don't--I couldn't identify if that information was on the record already, and I just wanted to ask counsel if they can provide the authority, the exhibit number.

MR. SILLS: It is not yet--well, it is in the record now. It was not in the record before. It's--as you can see, it's almost entirely an English language summary of the Spanish language document which is in the record and which is attached to Mr. Torrente's Witness Statement, but I don't think

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there's any--

DR. FRUTOS-PETERSON: No, that's fine. I was just trying to identify the exhibit number.

MR. SILLS: It does not have an existing exhibit number, and I think, for good order's sake, we should assign it one. But, as I say, it's substantially similar, although not identical to the Spanish-language presentation that already has an exhibit number but I think--

(Overlapping speakers.)

MR. SILLS: We're happy to provide a link. We found it online, Claudia, and so we are happy to share it with you here shortly; like in the break we're happy to do that.

DR. FRUTOS-PETERSON: Yeah, I mean, Mr. President, I was just curious because evidently that is not on the record already, and this is the first time that we see it, so, we feel like we should object to that because we--it has not been discussed on the papers. So I will be under your instructions, but we feel uncomfortable to have something that has not been part of the record.

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(Overlapping speakers.)

MR. SILLS: We can--I'm sorry.

PRESIDENT NUNES: Go ahead. No, go ahead.

MR. SILLS: We can address that later, but we have not had an opportunity to address on papers Colombia's presentation. Colombia has made two presentations in opposition to our single Application for Emergency Relief first, and then for Interim Measures. And I don't know of any rule that says we can't bring additional materials in what's effectively a rebuttal. But if Colombia is going to move to strike that exhibit, then I suppose we will deal with that on papers and at an appropriate time. I'm not quite sure why because it doesn't say anything that's different from the Spanish-language document that we already did present, but we can deal with that if and when Colombia decides to move to strike.

DR. FRUTOS-PETERSON: Mr. President, I think, just to move on, if that's appropriate for the Tribunal, I just feel like at this point I haven't reviewed that, so Colombia could reserve the right to come back on this, if that's okay with you. I don't

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want to be causing too much trouble, but I do feel that we have--we need to review that information because it's not part of the record.

PRESIDENT NUNES: Okay. So, thank you. We will take a 15-minute break. We will be back at 10:28 in the West, 11:28 for me, but in the afternoon for the Parties, for my colleagues. Okay?

DR. FRUTOS-PETERSON: Perfect. Thank you.

PRESIDENT NUNES: So, we stay connected here; is that correct, Marisa?

SECRETARY PLANELLS-VALERO: Mr. President, we will send everyone to their breakout rooms.

PRESIDENT NUNES: Even if we leave, we stay there connected?

SECRETARY PLANELLS-VALERO: Yes.

PRESIDENT NUNES: Okay, thank you.

SECRETARY PLANELLS-VALERO: Perfect. Thank you.

(Recess.)

PRESIDENT NUNES: Mrs. Frutos-Peterson, before we move on with the Respondent's presentation, I would like to let you know that, during the break,

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the Tribunal reviewed this matter raised by you with respect to the document that was part of Claimants' presentation. What I decide to do is, not to put any pressure at this point in time, is to leave this point open and give you, Respondent, until 11 November to comment on the document and come back to us and let us know if the translation is accurate, and if there is something else which was not in the case already.

So, are you okay with that, the November date, is that date okay for you?

MRS. FRUTOS-PETERSON: That's a very good solution, Mr. President. Thank you very much, so we take note of that, and we will proceed accordingly.

PRESIDENT NUNES: We will, for the time being, the matter will remain open, so that you will have time to take a look and come back to us. Okay? And to the counter-party for sure.

MRS. FRUTOS-PETERSON: Yes, will do, sir. Thank you.

PRESIDENT NUNES: Okay. Who will make the presentation?

OPENING STATEMENT BY COUNSEL FOR RESPONDENT

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MRS. FRUTOS-PETERSON: Thank you, Mr. President. We will divide our presentation, you know, in three parts. Ms. Ordoñez will start, following by me, and then Elisa Botero at the end, but okay, Ana, do you want to start?

MS. ORDOÑEZ: Thank you, Claudia. Dear Mr. President and Members of the Tribunal, good morning.

We are here today to hear Claimants' request for the recommendation of Provisional Measures against the Republic of Colombia. As we have done consistently in all investment cases against the State, we appear before this investor-State Arbitration Tribunal under the full conviction that the decision rendered must properly consult and apply the terms of the relevant treaty.

Colombia does not contest the general power of ICSID tribunals to order Interim Measures of protection. Nevertheless, Article 47 of the ICSID Convention clearly provides that this general power can be limited through agreement of the Parties. This is precisely what happened in the case at hand.

[Page 38]

Claimants initiated this arbitration by consenting to all the conditions established in Chapter 11 of the Treaty, which includes the provision in the second sentence of Article 10.20.8. This provision clearly provides that a “tribunal may not order attachments or enjoin the application of a measure alleged to constitute a breach referred to in Article 10.16.”

Claimants are seeking an order preventing Colombia from taking steps to enforce the disputed Ruling with Fiscal Liability of the CGR until this arbitration has concluded; that is, they are seeking a provisional measure to prevent the enforcement of the Measure allegedly constituting a breach of the Treaty.

As we have already established in the various rounds of written submissions preceding this Hearing, this is a fatal defect in Claimants' request for the Provisional Measures.

The request for Provisional Measures was made after Colombia invoked Article 10.20.4 of the Treaty, to ask the Tribunal to hear and consider as a preliminary matter the objection that, as a matter of law, the Claim submitted by Claimants is not a claim

[Page 39]

in respect of which the Tribunal may issue an award in favor of the Claimants pursuant to Article 10.26 of the Treaty.

Back on August 24, 2020, we argued that the Tribunal could not decide over this dispute, among other reasons, because Claimants had not suffered any loss or damage by reason of or arising out of a breach of a substantive obligation of the Treaty or an investment agreement.

In other words, we argue that Claimants did not comply with the requirements established in Article 10.16.1 of the Treaty for submitting a claim to arbitration. Respondent developed this objection in its Memorial on Preliminary Objection.

Before the time scheduled for the submission of their Counter-Memorial on Preliminary Objections, Claimants filed their Requests for Provisional Measures, including the clear admission that they had not yet suffered any loss or damage and accordingly that they had made recourse to arbitration without meeting the necessary conditions of consent to this form of dispute settlement.

[Page 40]

As both Parties have recognized, it is well-established that a tribunal may grant Provisional Measures when there is a prima facie basis for jurisdiction. In this case, Claimants have also failed to meet such prima facie basis.

The lack of prima facie jurisdiction and the clear language of the second sentence of Article 10.20.8 of the Treaty, among other reasons, leads to the conclusion that this Tribunal is not authorized to order the Provisional Measures requested by the Claimants.

In light of the above, we respectfully ask the Tribunal to dismiss Claimants' request and, given the frivolous nature of Claimants' Provisional Measures Application, we also respectfully request that the Tribunal order Claimants to pay all costs and expenses related to it, including Respondent's attorney's fees.

I will now give the floor to Ms. Claudia Frutos-Peterson from Curtis who will lead Respondent's oral presentation on Claimants' application on Provisional Measures.

[Page 41]

1 Thank you.

2 MRS. FRUTOS-PETERSON: Thank you, Ana.

3 Well, again, good morning and good afternoon

4 to Members of the Tribunal and to everyone else

5 present at the Hearing.

6 In their submissions on Provisional

7 Measures, Claimants had made every attempt to distract

8 the Tribunal from the single issue it must examine in

9 deciding Claimants' application: Whether the Request

10 for Provisional Measures falls within the scope of the

11 second sentence of Article 10.20.8 of the Treaty,

12 which explicitly bars this Tribunal from granting any

13 interim relief that enjoins the application of a

14 measure alleged to constitute a breach of the Treaty.

15 Claimants try to avoid that express

16 prohibition by focusing on Article 47 of the ICSID

17 Convention and on the first sentence of Article

18 10.20.8 of the Treaty, both of which, in general

19 terms, grant tribunals authority to order Provisional

20 Measures to preserve the rights of a disputing party.

21 As Respondent has repeatedly made clear,

22 that authority is not called into question here. As a

[Page 42]

1 general matter, Colombia acknowledges that this

2 Tribunal has the power to order interim relief.

3 Colombia also acknowledges that Interim Measures may

4 be appropriate to preserve party's procedural rights

5 to ensure--or to ensure that the Tribunal's

6 jurisdiction is made fully effective.

7 But if that is the case, what is then the

8 issue here? The issue is whether Claimants'

9 Provisional Measures Request falls within the scope of

10 the prohibition set forth in the second sentence of

11 Article 10.20.8 of the Treaty. Why? Because if it

12 does, regardless of any general authority, the

13 Tribunal is expressly forbidden from granting it.

14 Correctly framing the discussion immediately

15 reveals that Claimants' arguments and the Authorities

16 they cite in support of the Provisional Measures

17 Applications are wholly irrelevant.

18 Claimants cite to a number of cases that

19 supposedly stand for the proposition that Article 47

20 of the ICSID Convention grants ICSID tribunals broad

21 authority to recommend Interim Measures. While the

22 cases that interpret and implement Article 47 can be

[Page 43]

1 instructional in confirming an ICSID tribunal's

2 general authority towards the Provisional Measures,

3 they have no bearing in determining the scope of

4 Article 10.20.8 of the Treaty.

5 Claimants also cite to several cases where

6 investor-State tribunals granted interim relief,

7 including cases where tribunals issued anti-suit

8 injunctions, asking this Tribunal to grant the same

9 relief here. Those cases are completely inapplicable

10 because none of them--none of those tribunals was

11 dealing with a provision like Article 10.20.8 of the

12 Treaty, which bars Tribunals from issuing certain

13 types of Provisional Measures. In addition, some of

14 the decisions on Provisional Measures cited by the

15 Claimants were rendered under the UNCITRAL Arbitration

16 Rules, not the ICSID Convention, which only highlights

17 their irrelevance to this case.

18 There are, however, three cases directly on

19 point where tribunals constituted under treaties with

20 provisions identical to Article 10.20.8 rejected

21 Interim Measures Applications based on the prohibition

22 in the second sentence of that Article. Those cases

[Page 44]

1 are IBT versus Panama, Feldman versus Mexico, and Pope

2 & Talbot versus Canada.

3 But let us leave those cases aside for a

4 moment to focus on Article 10.20.8 of the Treaty.

5 Article 10.20.8 reads as follows, and I

6 quote: "A tribunal may order an interim measure of

7 protection to preserve the rights of a disputing

8 Party, or to ensure that the Tribunal's jurisdiction

9 is made fully effective, including an order to

10 preserve evidence in the possession or control of a

11 disputing party or to protect the Tribunal's

12 jurisdictions."

13 Then comes the second sentence, which

14 states, and I quote: "A tribunal may not order

15 attachment or enjoin the application of a measure

16 alleged to constitute a breach referred to in Article

17 10.16."

18 The first sentence allows tribunals to order

19 interim measures of protections aimed at preserving

20 procedural rights and ensuring that the Tribunal's

21 jurisdiction is effective. However, the second

22 sentence bans the Tribunal from ordering a particular

[Page 45]

1 type of interim measures; that is, those aimed at

2 enjoining the application of the Measures supposedly

3 in breach of the Treaty.

4 The United States and Colombia had a clear

5 intention behind the express prohibition in the second

6 sentence of Article 10.20.8 of the Treaty: to prevent

7 arbitral tribunals from directly interfering with or

8 invalidating their sovereign acts.

9 That is the same rationale behind

10 Article 10.26 of the Treaty which limits the types of

11 reliefs a tribunal may award to monetary damages and

12 restitution of property exclusively.

13 Indeed, according to Kenneth Vandevelde, who

14 led treaty negotiations for the United States and

15 wrote on the most prominent books on the matter,

16 Article 10.26, and I quote, "responds to concerns

17 raised by critics that investor-State arbitral

18 tribunals will have the power to invalidate U.S. law

19 or overrule the decisions of U.S. courts."

20 Article 10.20.8 and Article 10.26, which

21 come directly from the U.S. Model BIT and are included

22 in identical terms in other treaties executed by the

[Page 46]

1 United States, including NAFTA and the Panama U.S.

2 Trade Promotion Agreement, short-circuit any attempt

3 by investors to use the arbitral process as a means to

4 freeze the State's regulatory and sanctioning

5 processes, or as a shield from the consequences of a

6 State's measures that would otherwise be applicable.

7 Commenting on the text of NAFTA, Meg Kinnear

8 and Andrea Bjorklund, stated in no uncertain terms

9 that, and I quote: "A tribunal cannot order a Party

10 to amend or withdraw the challenged measure on either

11 an interim or final basis."

12 In practical terms this means the Treaty

13 allows the United States and Colombia to implement and

14 maintain a challenged measure even if a tribunal

15 ultimately determines that such measure constituted a

16 breach of the substantive rights set forth in

17 Chapter 10. In the words of Professor Gabrielle

18 Kaufmann-Kohler and her co-authors, and I quote:

19 "NAFTA Article 1134 [. . .] provides for interim

20 relief to preserve the rights of a disputing party.

21 However, in contrast to the ICSID system, it makes it

22 clear that the rights in dispute cannot be the subject

[Page 47]

1 matter of the provisional measures. The reason for

2 this appears to be that Article 1134 and 1135 permit a

3 State to implement and maintain a measure even if it

4 breaches substantive rights contained in Chapter 11A."

5 Let's turn now to the prohibition in Article

6 10.20.8 on how it applies to the facts of this case.

7 Article 10.20.8 grants this Tribunal

8 authority to order Provisional Measure so long as

9 those measures do not impede or suspend the

10 application of the Measure at issue in the

11 Arbitration. According to the IBT Tribunal, that

12 determination is, in fact--is a fact--is fact

13 specific. The Tribunal must look into, and I quote:

14 "The interim relief requested, the measure alleged to

15 constitute a breach, and how close or remote is the

16 causal link between the measure alleged to constitute

17 a breach and the act sought to be enjoined."

18 The first step in the analysis asks that we

19 look into the interim relief sought. Claimants here

20 request an order for Provisional Measures enjoining

21 Colombia from enforcing what Claimants refer to as the

22 "CGR Decision" and Respondent refers to as the "Ruling

[Page 48]

1 with Fiscal Liability" until the Tribunal renders a

2 final award on the merits. Plainly, Claimants seek to

3 stop the enforcement of the Ruling with Fiscal

4 Liability.

5 The next question the Tribunal must answer

6 is: What is the Measure that Claimants allege

7 constitutes a breach of the Treaty? The answer,

8 Members of the Tribunal, is very simple: Claimants

9 alleged that Colombia violated the Treaty by

10 initiating Fiscal Liability Proceedings against Foster

11 Wheeler and Process Consultants, conducting such

12 proceedings in the way that it did, and imposing joint

13 and several liability upon them.

14 On your screen, you will see a summary in

15 Claimants' own words of Respondent's supposed breaches

16 of the Treaty.

17 All those supposed breaches occurred within

18 the context of the Fiscal Liability Proceeding and

19 allegedly crystallized in the Ruling with Fiscal

20 Liability which found 12 natural and four judicial

21 persons, including Foster Wheeler and Process

22 Consultants, jointly and severally liable in the

[Page 49]

1 amount of USD 997 million. Thus, according to

2 Claimants, the Measure at issue in this Arbitration is

3 the Fiscal Liability Proceedings.

4 Finally, the Tribunal must examine how close

5 or remote is the causal link between the Measure

6 alleged to constitute a breach of the Treaty and the

7 Act sought to be enjoined by the Provisional Measures?

8 In other words, would the Provisional Measure

9 requested enjoin the application of the Measure

10 alleged to constitute a breach of the Treaty? The

11 answer in this case is a resounding "yes."

12 Because the purpose of the Fiscal Liability

13 Proceeding is to determine whether public servants and

14 private parties have caused damage to the State

15 through the mismanagement of public resources and to

16 seek compensation from those responsible, applying or

17 implementing the Fiscal Liability Proceeding means

18 seeking satisfaction from the fiscally liable Parties,

19 including Foster Wheeler and Process Consultants, of

20 the amounts set forth in the Ruling with Fiscal

21 Liability.

22 This analysis, Members of the Tribunal,

[Page 50]

1 leads to one unavoidable conclusion: That Claimants'

2 Provisional Measures Request must be rejected because

3 it falls squarely within the scope of the provisions

4 set forth in the second sentence of Article 10.20.8.

5 Claimants themselves acknowledged this

6 throughout their submissions on Provisional Measures.

7 On your screens, you are seeing a quote from the

8 Claimants' letter of September 15th where Claimants

9 admit they are seeking an order preventing Colombia

10 from enforcing the CGR Decision while the Arbitration

11 challenging the CGR Decision is heard.

12 In the Reply on the Emergency Application,

13 Claimants again submitted that they are seeking to

14 enjoin the enforcement of the CGR Decision; that is,

15 the Ruling with Fiscal Liability, because, and I

16 quote: "A worldwide campaign of litigation by

17 [Colombia] while the CGR Decision is being challenged

18 in this arbitration will aggravate this dispute."

19 But even beyond Claimants' explicit

20 submissions, their submissions are riddled with

21 references that confirm that the Ruling with Fiscal

22 Liability is inexorably linked to the Fiscal Liability

[Page 51]

1 Proceedings they allege violated their rights under

2 the Treaty, and that stopping the enforcement of the

3 Ruling with Fiscal Liability will enjoin the

4 application of the Fiscal Liability Proceedings in

5 violation of Article 10.20.8 of the Treaty. On your

6 screen, we're going to show you some selected quotes

7 from Claimants' submissions that confirm that the only

8 thing Claimants are seeking here is to prevent the

9 application of the Measure Claimants allege constitute

10 a breach of the Treaty. I will give you a moment to

11 read for [yourselves].

12 (Pause.)

13 MRS. FRUTOS-PETERSON: In an attempt to

14 confuse the issue, Claimants essentially argue that

15 the interim relief they are requesting is not

16 prohibited because the Interim Measures sought are

17 aimed at enjoining the enforcement of the collection

18 proceeding which is separate--is a separate measure to

19 the Fiscal Liability Proceeding and the Ruling, and

20 Claimants have not claimed that the collection

21 proceedings has breached the Treaty. Claimants are

22 mistaken. The collection proceeding is not a separate

[Page 52]

1 and distinct forum from the Fiscal Liability

2 Proceeding and the Ruling that resulted from it.

3 Quite the contrary. Enforcing the Ruling with Fiscal

4 Liability is the reason why there will be a collection

5 proceeding in the first place. Without a Ruling of

6 Fiscal Liability, there will be no amount to collect

7 and nobody responsible for paying it. We just heard

8 Claimants talking about this collection process this

9 morning and making some reference to it to try to

10 present it as a different stage. We will hear later

11 how that is not a different process, so everything is

12 part of the same process about the execution of the

13 Decision, or the Ruling as we call it.

14 Granting Claimants' Provisional Measure

15 application will run afoul the prohibition in Article

16 10.20.8 of the Treaty because enjoining enforcement of

17 the Ruling with Fiscal Liability will prevent Colombia

18 from achieving the purpose of the Fiscal Liability

19 Proceeding, the Measures supposedly constituting a

20 breach of the Treaty. Put differently, if the

21 Tribunal halts enforcement of the Ruling with Fiscal

22 Liability, it will deprive the Fiscal Liability

[Page 53]

1 Proceedings of any effect because the only way to

2 apply the Fiscal Liability Proceeding, once it has

3 resulted in a ruling, is to collect the amount set

4 forth therein.

5 The three cases on which Respondent relies

6 all rejected Provisional Measures requests which

7 sought to enjoin the application of the Measure at

8 issue in the arbitration on the basis of provisions

9 identical to Article 10.20.8 of the Treaty. Claimants

10 tried but failed to distinguish these cases on the

11 facts arguing, among other things, that they didn't

12 deal with anti-suit relief and that the claimants in

13 those cases sought to change, rather than maintain,

14 the status quo. Claimants are grasping at straws.

15 In Pope & Talbot, the claimant argue that

16 Canada had violated its obligations under NAFTA by

17 entering into an agreement with the United States

18 setting a new discretionary yearly quota for lumber

19 exports. The claimant sought provisional measures

20 enjoining Canada from decreasing its own annual

21 softwood lumber allocation in accordance with the

22 United States and Canada Soft Lumber Agreement. The

[Page 54]

1 Pope & Talbot Tribunal rejected claimants' provisional

2 measure request finding that Article 1134 of NAFTA,

3 which is identical to Article 10.20.8 of the Treaty,

4 did not confer jurisdiction on the tribunal to enjoin

5 the application of a measure.

6 In Feldman, the claimant complained that

7 certain tax measures enacted by Mexico that impacted

8 the revenues of its subsidiary's cigarette export

9 business breached its substantive rights under NAFTA.

10 The claimant requested interim measures ordering

11 Mexico to cease and desist from any interference with

12 its assets and revenues or the assets and revenues of

13 its Mexican subsidiary. The Feldman tribunal denied

14 the claimants' provisional measures request as that

15 would be inconsistent with the limits imposed by NAFTA

16 in Article 1134, since such an order enjoining any

17 impact that the tax measures had on the revenue of the

18 business would entail an injunction on the application

19 of the measure alleged to be a breach of the treaty.

20 More recently, in IBT, the claimants argued

21 that Panama had breached the U.S.-Panama TPA when the

22 Ministry of Government issued an Administrative

[Page 55]

1 Resolution terminating a construction contract

2 executed by claimants due to contract breaches and

3 disqualifying claimants from entering into contracts

4 with Panama for a period of three years. Following

5 the issuance of the Administrative Resolution, Panama

6 took steps to execute the Performance Bond and backed

7 the Construction Contract. In the arbitration, the

8 claimants requested an order from the tribunal

9 enjoining such execution as well as the three-year

10 disqualification. The IBT tribunal rejected

11 claimants' provisional measure request because the

12 execution of the Performance Bond and the

13 disqualification were both effects of the Resolution

14 terminating the contract and, therefore, suspending

15 the former would mean necessarily paralyzing the

16 application of the latter in violation of the explicit

17 prohibition of the treaty.

18 Similarly, this Tribunal is bound by the

19 language of the Treaty and must reject Claimants'

20 Application for Provisional Measures because halting

21 the enforcement of the Ruling with Fiscal Liability

22 will enjoin the application of the Fiscal Liability

[Page 56]

1 Proceeding and prevent it from producing effect.

2 There is one more thing the Tribunal should

3 consider in determining whether it is bound by the

4 prohibition in Article 10.20.8 of the Treaty. If the

5 Tribunal were to enjoin the enforcement of the Ruling

6 with Fiscal Liability, it will tacitly recognize that

7 the Ruling with Fiscal Liability is not the Measure at

8 issue in this Arbitration, and thus Claimants will be

9 prevented from alleging in the Arbitration that the

10 Ruling with Fiscal Liability constitutes a violation

11 of the Treaty and claim damages associated with the

12 supposed breach.

13 Even if the Tribunal were to conclude that

14 the limitations in Article 10.20.8 of the Treaty does

15 not preclude it from granting Claimants' Provisional

16 Measure Request, such a request still fails because

17 Claimants have not satisfied the burden of proving

18 that there is an absolute need of urgency to prevent

19 an irreparable harm warranting the imposition of such

20 measure.

21 Under Article 47 of the ICSID Convention,

22 Provisional Measures are an extraordinary remedy

[Page 57]

1 reserved for limited cases of absolute necessity and

2 urgency. ICSID tribunals are called to exercise

3 self-restraint in recommending them.

4 In their submissions, Claimants placed

5 particular emphasis on the rights the Provisional

6 Measures they request are aimed at protecting.

7 According to Claimants, interim relief is warranted

8 here both to protect the Tribunal's exclusive

9 jurisdiction under Article 26 of the ICSID Convention

10 as well as the right to the preservation of the status

11 quo and non-aggravation of the dispute.

12 Let's focus first on Claimants' arguments

13 based on Article 26 of the ICSID Convention, which

14 they believe might save their application for

15 Provisional Measures. According to Claimants, the

16 enforcement of the Ruling with Fiscal Liability

17 threatens this Tribunal's jurisdiction and thus must

18 be enjoined. Claimants' argument is a red herring.

19 Article 26 of the ICSID Convention is completely

20 irrelevant to the issue at hand. The Fiscal Liability

21 Proceeding in Colombia which was initiated before this

22 Arbitration started and was actually the reason

[Page 58]

1 prompting Claimants' claim does not involve the

2 settlement of an investment dispute. It seeks to

3 establish Fiscal Liability under Colombian law and to

4 compensate the State for any resulting damages

5 suffered. Article 26 of the ICSID Convention only

6 protects the exclusive jurisdiction of an ICSID

7 tribunal to settle investment disputes. The Fiscal

8 Liability Proceeding is not an investment

9 dispute-settlement proceeding.

10 Claimants' interest in preserving the status

11 quo is not genuine, as the Provisional Measures they

12 result actually seek to alter it. As of now,

13 Claimants have been found to be fiscally liable

14 pursuant to Colombian law. According to such law, the

15 next phase in the Fiscal Liability Proceeding is the

16 collection of the amount established in the Ruling

17 with Fiscal Liability. To halt the CGR's enforcement

18 effort, which is what Claimants are requesting here,

19 will change the ordinary course of the Fiscal

20 Liability Proceeding and alter the status quo.

21 That being said, the discussion about

22 whether the Provisional Measures Applications seek to

[Page 59]

1 maintain or alter the status quo is moot because in

2 either case, the requirements for ordering interim

3 relief are not met in this case.

4 I will now give the floor to my colleague,

5 Elisa Botero, who will address the Tribunal on the

6 requirements that Claimants need to show in order to

7 obtain the Provisional Measures that they are seeking.

8 MS. BOTERO: Thank you, Claudia.

9 Both Parties largely agree that to obtain

10 the interim injunctive relief Claimants seek, they

11 must satisfy five cumulative requirements: Claimants

12 must first show that the Provisional Measures

13 requested are necessary and urgent to prevent an

14 irreparable harm. Claimants must also make a showing

15 that the Tribunal has prima facie jurisdiction over

16 the dispute, and that there is a prima facie case on

17 the merits. Claimants must demonstrate that granting

18 the Provisional Measures outweighs the prejudice that

19 such measures would inflict upon Respondent or third

20 parties. And finally, Claimants must prove that

21 granting the Provisional Measures would not cause the

22 Tribunal to pre-judge the merits of the disputes.

[Page 60]

1 None of these five requirements are met in this case.

2 First, Claimants will not suffer an

3 irreparable harm if the injunctive relief they request

4 is not granted and thus there is no absolute urgency

5 or necessity in their Provisional Measures

6 Application.

7 Claimants argue that the Provisional

8 Measures they request are necessary because, if

9 Colombia pursues enforcement of the Ruling with Fiscal

10 Liability and embarks on a worldwide litigation

11 campaign against Foster Wheeler and Process

12 Consultants, [Redacted]

13 [Redacted] They also claim Interim

14 Measures are urgent because proceedings to enforce the

15 Ruling with Fiscal Liability have already begun.

16 However, as Respondent has repeatedly shown in its

17 submissions, the CGR's collection efforts pose no real

18 threat to Claimants' assets, [Redacted]

19 [Redacted]

20 The Tribunal already reached this conclusion

21 in its Decision on the Emergency Application finding

22 that, and I quote, "Claimants had failed to make a

[Page 61]

1 showing of the heightened level of urgency required to

2 grant the emergency temporary relief that they had

3 requested, and in particular, Claimants had not

4 provided evidence that any of their assets are

5 currently under threat of harm." The Tribunal should

6 reach the same conclusion here.

7 The CGR has so far been unsuccessful in

8 locating assets of Claimants in Colombia that can be

9 attached and sold off in satisfaction of the amount of

10 the Ruling with Fiscal Liability. In his statement,

11 Mr. Thomas Grell, the President of Foster Wheeler,

12 [Redacted]

13 [Redacted] Because no assets have been found, the CGR

14 has not decreed any precautionary measures against

15 Claimants despite having authority to do so. And even

16 though as part of the collection proceeding, the CGR

17 will renew its search for assets domestically, unless

18 Claimants have acquired new assets, such search

19 efforts will likely prove unsuccessful.

20 The situation with respect to Claimants'

21 assets abroad is no different. In the four years

22 since the Fiscal Liability Proceeding was initiated,

[Page 62]

1 the CGR has failed to identify any assets of Claimants

2 outside of Colombia that could eventually be seized

3 and sold to satisfy the amount of the Ruling with

4 Fiscal Liability. During the Collection Proceeding,

5 the CGR will continue searching for assets, however,

6 experience thus far in the past four years shows that

7 those efforts will continue to be unsuccessful. And

8 even if the CGR was able to locate any assets,

9 attaching those assets is another matter entirely as

10 the CGR relies on cooperation mechanisms that are

11 ill-suited for such purpose in most cases. There is

12 currently no attachment proceeding abroad either

13 upcoming or ongoing.

14 As such, none of Claimants' assets are in

15 any threat of harm. Not a single asset. [Redacted]

16 [Redacted]

17 [Redacted]

18 [Redacted]

19 The worldwide campaign of litigation that

20 Claimants believe threatens them is an absolute

21 fantasy. The CGR must carry out any collection

22 efforts of the Ruling with Fiscal Liability in

[Page 63]

1 accordance with the provisions set forth in the

2 relevant Colombian laws and regulations and simply

3 does not have authority to embark on a worldwide

4 litigation campaign against Claimants.

5 Even if the CGR manages to attach any of

6 Claimants' assets, either in Colombia or abroad,

7 during the forced collection proceeding, it may only

8 auction those assets after the courts of the

9 administrative, adjudicatory jurisdiction rule on any

10 annulment actions initiated by Claimants against the

11 Ruling with Fiscal Liability. Claimants' Witness

12 Statement--Claimants' Witness, sorry, Mr. Cesar

13 Torrente--

14 REALTIME STENOGRAPHER: Could you slow down

15 just a little bit, please. Thank you.

16 MS. BOTERO: Yes.

17 Claimants' Witness, Mr. Cesar Torrente,

18 acknowledged as much in his First Witness Statement

19 declaring that, and I quote, "the CGR will have to

20 wait for a final judicial decision in order to sell

21 and/or liquidate FPJVC's assets." According to

22 Claimants' own witness, a judicial decision would take

[Page 64]

1 between five to 12 years, which means that the

2 eventual sale of any assets is by no means imminent.

3 If all that weren't enough, the collection

4 efforts are in their early stages, and even though the

5 Ruling with Fiscal Liability has become final at the

6 administrative level, Claimants have recourse under

7 Colombian law to challenge it and to seek a stay of

8 enforcement. On your screen, we have included a

9 flowchart in which you can see all the different

10 steps, both at the administrative and judicial levels,

11 following a final Ruling with Fiscal Liability. The

12 purple star marks where we are right now. The CGR

13 recently issued voluntary collection notices. The

14 Forced Collection Proceeding will only start after the

15 completion of the voluntary collection stage which may

16 last up to three months. As you can see, the Forced

17 Collection Proceeding has many steps, including

18 several opportunities for a debtor to resist

19 enforcement.

20 In this morning's presentation, Claimants

21 included a screen-shot of a diagram that was included

22 in Respondent's Memorial on Preliminary Objections.

[Page 65]

1 Claimants focused on a dotted line in that graphic to

2 argue that the collection proceeding is a separate

3 proceeding from the Fiscal Liability Proceeding. As

4 we already mentioned, the collection proceeding is

5 merely a stage, or as Mr. Sills called it this

6 morning, a "phase" of the Fiscal Liability Proceeding.

7 Respondent explained this very clearly in Paragraph 89

8 of its Memorial on Preliminary Objections, which I

9 would like to quote for you, and here I'm quoting:

10 "Broadly speaking, the Fiscal Liability Proceeding

11 consists of five stages: (a) the preliminary

12 investigation, (b) the initiation stage, (c) the

13 indictment stage, (d) the ruling and administrative

14 remedy stage and with respect to Rulings with Fiscal

15 Liability, (e) the judicial control stage and the

16 Forced Collection stage."

17 Let's not get caught up in semantics. The

18 reason why we call it "Forced Collection Proceeding"

19 is because the name of the phase in Spanish is

20 "procedimiento de cobro coactivo."

21 Back to the slide on your screen, I want to

22 point you to the green box on the right-hand side

[Page 66]

1 which represents the judicial control of the Ruling

2 with Fiscal Liability which will proceed in parallel

3 before the courts of the administrative, adjudicatory

4 jurisdiction. Only after the courts of the

5 administrative adjudicatory jurisdiction have finally

6 ruled on any annulment actions against the Ruling or

7 the Resolution ordering the auction and sale, will the

8 CGR proceed to sell any assets that have been

9 attached. As we've said, final judicial decisions may

10 take five years or more.

11 During the annulment action, Claimants may

12 request a stay of the Forced Collection Proceeding as

13 a precautionary measure. Contrary to Claimants'

14 allegations, such stay would not require Foster

15 Wheeler or Process Consultants to offer a bond. The

16 alleged harm Claimants seek to prevent with their

17 Provisional Measures Application is by no means

18 imminent or real, making the Provisional Measures

19 neither urgent nor necessary. The Tribunal cannot

20 grant the extraordinary relief that is Provisional

21 Measures based on mere conjectures of hypothetical

22 harm.

[Page 67]

1 As the Tribunal in Occidental indicated, and

2 I quote: "Provisional Measures are not meant to

3 protect against any potential or hypothetical harm

4 susceptible to result from uncertain actions. Rather,

5 they are meant to protect the requesting Party from

6 imminent harm."

7 Claimants have also failed to meet their

8 burden of proof of showing that there is a prima facie

9 basis for the Tribunal's jurisdiction. To satisfy

10 this requirement and establish the Tribunal's prima

11 facie jurisdiction, Claimants must do more than simply

12 bring proceedings against Colombia. As Respondent

13 explained in detail in its Memorial on Preliminary

14 Objections, the Tribunal does not have jurisdiction

15 over this case.

16 First, Claimants did not comply with the

17 requirements established in Article 10.16.1 of the

18 Treaty for submitting a claim to arbitration

19 thereunder: There is no breach of a substantive

20 obligation of the Treaty, and an investment--or an

21 Investment Agreement, and Claimants have not incurred

22 any loss or damage for a reason of or arousing out

[Page 68]

1 of--arising out of that breach. In fact, the

2 Provisional Measures Application highlights the

3 absence of an actual loss or damage arising out of the

4 Fiscal Liability Proceeding, as the interim relief

5 Claimants seek is aimed at preventing the supposed

6 loss or damage that could stem from the enforcement of

7 the Ruling with Fiscal Liability.

8 Second, Claimants do not have a qualifying

9 investment under the Treaty and the ICSID Convention

10 because a Services Contract, as an ordinary commercial

11 contract, does not qualify as an investment under

12 Article 25 of the ICSID Convention.

13 Third, Claimants--Claimant FPJVC does not

14 qualify as a national of another Contracting State

15 under the ICSID Convention because FPJVC is not a

16 juridical person.

17 Fourth, Claimants Foster Wheeler and Process

18 Consultants did not send a Notice of Intent to submit

19 the present dispute to arbitration in violation of

20 Article 10.16.2 of the Treaty.

21 Fifth, Claimants did not formally or

22 materially comply with the waiver requirement to

[Page 69]

1 submit a claim to arbitration under the Treaty.

2 Claimants have also not made a showing of a

3 prima facie case on the merits, which is a requirement

4 to obtain interim relief. In its October 28

5 submission, Colombia analyzed each of Claimants'

6 claims. To summarize, Claimants' FET claim is

7 baseless because, one, the Treaty's FET standard only

8 protects Investments and not investors, and all of

9 Claimants' Claims are based on alleged acts,

10 omissions, and conduct by Colombia that would have

11 affected only investors.

12 Two, under the Treaty, the FET standard is

13 limited to the minimum standard of treatment under

14 customary international law, and none of Claimants'

15 allegations are capable of violating the minimum

16 standard of treatment.

17 And three, there cannot be a denial of

18 justice because Colombian courts haven't had yet the

19 opportunity to review the Ruling with Fiscal

20 Liability.

21 Claimants have also not made a prima facie

22 case of expropriation because the two contractual

[Page 70]

1 rights that they were supposedly deprived of are not

2 capable of being economically exploited independently

3 and separately from the rest of the Services Contract,

4 and thus cannot be expropriated.

5 Claimants' claim that Respondent violated

6 the national-treatment obligation is also bound to

7 fail because the Indictment Order as well as the

8 Ruling with Fiscal Liability that was issued after

9 this Arbitration was initiated, involved both

10 nationals and foreigners, and the challenged measure

11 on its face does not appear to favor nationals over

12 non-nationals.

13 Claimants have not made a prima facie case

14 of violation of the most-favored-nation clause. The

15 MFN obligation is a standard of treatment. And

16 Claimants have failed to show prima facie an actual

17 factual scenario in which third country investors were

18 accorded more favorable treatment in like

19 circumstances than U.S. investors like Claimants.

20 Even arguendo, if the MFN provision of the Treaty

21 would allow the importation of more favorable

22 provisions from other treaties, Claimants' attempt to

[Page 71]

1 import an umbrella clause from the

2 Colombia-Switzerland BIT would still fail. The

3 Colombia-Switzerland BIT does have an umbrella clause

4 but expressly indicates that the Contracting Parties

5 do not consent to arbitrate disputes under that

6 umbrella clause. Therefore, importing the umbrella

7 clause, as Claimant requests, would put them in a

8 better position than Swiss investors, distorting the

9 purpose of the most-favored-nation obligation.

10 Finally, there could not have been a breach

11 of an Investment Agreement as Claimants also

12 confusingly argue since the Treaty does not grant the

13 Tribunal jurisdiction to hear alleged contractual

14 breaches, and in any case no investment agreement

15 prima facie exists.

16 In addition, Respondent does not

17 want--sorry. Respondent does want to stress the fact

18 that Claimants have not established that they have a

19 right to the relief they seek. Claimants ask that the

20 Tribunal award them moral damages, injunctive relief,

21 and an offsetting Award, but as Respondent explained

22 in depth in its Memorial on Preliminary Objections,

[Page 72]

1 under Article 10.26 of the Treaty, this Tribunal may

2 only order that Colombia compensate monetary damages.

3 Claimants have also not satisfied the

4 fourth requirement for obtaining interim relief. Not

5 only would the Provisional Measures requested

6 prejudice Respondent by impinging on its sovereign

7 right and its obligation to enforce its own laws, but

8 would also affect third parties, namely the other 14

9 fiscally liable Parties under the Ruling with Fiscal

10 Liability which, as we have explained, are jointly and

11 severally liable alongside Foster Wheeler and Process

12 Consultants. Issuing the Provisional Measures

13 requested by Claimants would mean that the enforcement

14 of the Ruling with Fiscal Liability would be limited

15 to the remaining fiscally liable Parties excluding

16 Claimants affecting those third parties.

17 Lastly, granting the Provisional Measures

18 Application would cause the Tribunal to pre-judge the

19 merits. The interim relief they seek is exactly the

20 same as the relief they requested in their Notice of

21 Arbitration, an injunction preventing the CGR from

22 enforcing the Ruling with Fiscal Liability. With

[Page 73]

1 their Provisional Measures Application, Claimants are

2 plainly seeking to obtain the ultimate relief they are

3 pursuing without having to prove their case on the

4 merits. Granting the Provisional Measures requested

5 would award Claimants the ultimate relief they seek in

6 the Arbitration effectively pre-judging the merits of

7 this case.

8 Actually, Colombia wonders if having the

9 Tribunal pre-judge the merits of the dispute is not

10 what Claimants wanted all along. Their Provisional

11 Measures Application of September 2 is a poorly

12 disguised Memorial on the Merits, Witness Statements

13 and all. Claimants devoted half of their initial

14 submission to discussing in detail the alleged

15 breaches of the Treaty by Respondent. Claimants even

16 attached the expert testimony of Mr. Colin Johnson,

17 who acted as their independent expert witness in the

18 Fiscal Liability Proceeding, and use his testimony

19 here to criticize the damage calculation methodology

20 employed by the CGR. The Tribunal cannot allow such a

21 blatant attempt to circumvent its Decision to

22 bifurcate the proceedings and rule on Respondent's

[Page 74]

1 preliminary objections as a preliminary question.

2 In conclusion, Claimants' Provisional

3 Measures Request must fail because Article 10.20.8 of

4 the Treaty prohibits the Tribunal from granting

5 interim relief enjoining the application of a measure

6 alleged to be in breach of a treaty. But even in the

7 unlikely event that the Tribunal were to somehow

8 conclude that the prohibition in Article 10.20.8 does

9 not apply in this case, Claimants' Provisional

10 Measures Application must be rejected because

11 Claimants have failed to prove each one of the five

12 cumulative requirements for granting Provisional

13 Measures. Provisional Measures under the ICSID

14 Convention are reserved for situations where there is

15 an absolute necessity and urgency to prevent

16 irreparable harm. There is nothing in this case to

17 warrant such an extraordinary remedy.

18 One final thought on costs. Claimants have

19 made a completely frivolous application patently

20 outside the scope of the Tribunal's authority under

21 Article 10.20.8 of the Treaty. They have forced

22 Colombia to spend two entire months responding to

[Page 75]

1 their submissions on emergency and interim relief,

2 even though the Provisional Measures they seek are not

3 only baseless, given the clear language of the Treaty,

4 but also unwarranted under the circumstances of this

5 case. Colombia has had to review Claimants' extensive

6 submissions, exhibits on Legal Authorities, as well as

7 four Witness Statements, write a handful of letters on

8 procedural and substantive matters, file three full

9 pleadings on Provisional Measures and prepare a

10 hearing on Claimants' application for interim relief.

11 The time Colombia has spent in this futile matter has

12 deprived Respondent of precious time to prepare its

13 Reply on Preliminary Objections which is due in only

14 five weeks. Claimants submitted their

15 Counter-Memorial on Preliminary Objections on

16 October 14, which means that, for the past three

17 weeks, Respondent's team has not only--has not been

18 able to focus on its upcoming submission.

19 For these reasons and given the frivolous

20 nature of their application, Claimants should bear all

21 costs and expenses of this interim relief phase,

22 including Respondent's attorney's fees.

[Page 76]

1 This concludes Respondent's oral argument.

2 Thank you very much.

3 PRESIDENT NUNES: Thank you, Ms. Botero.

4 Now I would like to ask my colleagues if

5 they would like to make any questions, to ask any

6 questions to the Parties now or wait until they finish

7 their--(coughing) sorry, excuse me--if we wait until

8 they finish their rebuttals.

9 ARBITRATOR KOHEN: No question,

10 Mr. President.

11 PRESIDENT NUNES: Thank you, Marcelo.

12 John?

13 ARBITRATOR BEECHEY: Not for me either,

14 Mr. President.

15 PRESIDENT NUNES: So, we have a 15-minute

16 rebuttal by Claimants.

17 REBUTTAL ARGUMENT BY COUNSEL FOR CLAIMANTS

18 MR. SILLS: Thank you. Thank you, Mr.

19 President.

20 I find it rather striking that, given

21 Colombia's position, incorrect position, that we're

22 seeking pre-judgment of the merits and that the

[Page 77]

1 Tribunal should not delve into the merits, so much of

2 the presentation we just heard is devoted to a summary

3 of Colombia's preliminary objections, which have been

4 presented to the Tribunal, which have delayed these

5 proceeding, which we have answered, and

6 assertions--and they're only assertions--that there's

7 something materially deficient in the case we brought.

8 We will rest on our papers on that.

9 It's abundantly clear that we stated a more

10 than valid case, that what happened to our client in

11 Colombia before the CGR was an outrage to due process,

12 that it was pre-determined, and that the Award, which

13 we have just been told is USD 997 million, although

14 that's not what it says, it cannot in fairness be the

15 subject of collection proceedings.

16 I was also struck by the notion that having

17 a sovereign government chasing our clients around the

18 world, trying to collect a billion dollars from them

19 would somehow not cause any harm to our clients. [Redacted]

20 [Redacted]

21 [Redacted]

22 I think it's also noteworthy what wasn't

[Page 78]

1 said in this very involved presentation we just heard,

2 and that is there was no reference to any case being

3 brought outside of Colombia. The entire presentation

4 was focused on Colombia's attempt to revise the chart

5 that we showed in our presentation-- I suppose opposed

6 by changing a dotted line and two arrows to a purple

7 star-- but that both presentations, despite the slight

8 graphic change, make it abundantly clear that we're

9 talking about two separate proceedings. And we're not

10 seeking ultimate relief. If Colombia were somehow to

11 prevail on the merits in the Arbitration, it would be

12 free to go ahead and attempt to collect this Award.

13 So, the harm to Colombia is simply having to

14 wait. But what they don't say is--and they don't

15 address--is the harm that will come from what I think

16 we've just heard is a worldwide campaign that they're

17 contemplating. They say it's slow to get going, that

18 it's only underway, that it might take four or five

19 years. What they don't say is that they're not

20 trying. And the fact that they're not succeeding

21 doesn't have really anything to do with the

22 appropriateness of granting Interim Measures. And

[Page 79]

1 those proceedings that they are threatening, that they

2 just told us they're going to be bringing, will

3 directly impinge on the jurisdiction of this Tribunal.

4 Let me give an example. [Redacted]

5 [Redacted] If Colombia goes to a

6 U.S. court to attempt to collect any or all of this

7 Award, our response, as one might expect, will be, in

8 significant part, that the underlying proceeding is

9 not entitled to recognition in the U.S.; that it's not

10 entitled to the benefits of comity because it is an

11 outrage to due process because our rights were not

12 protected procedurally or substantively. And that

13 will put before a U.S. court precisely the issues that

14 we have put before this Tribunal so that allowing

15 Colombia to rove around the world attempting to

16 enforce this Award in separate proceedings before the

17 national courts of the U.S., where my clients have

18 significant assets; in the UK; in Switzerland or

19 anywhere else they care to bring this campaign, will

20 directly threaten the exclusive jurisdiction of the

21 Tribunal over this dispute.

22 And there wasn't a word said about those

[Page 80]

1 proceedings. All we heard about was the attempt to

2 revise the presentation that we showed that there are

3 two proceedings involved here. There is the Fiscal

4 Liability Proceeding, which is now concluded; and

5 there is the new Enforcement Proceeding. Within

6 Colombia, these are two separate proceedings. Outside

7 of Colombia, these are two or three or 10 or 20

8 separate proceedings. And that whirlwind of

9 litigation that is apparently coming our way absent

10 Interim Measures could be designed for only one

11 purpose, which is to create so much risk of having to

12 pay up on an unjust award that my client will be [Redacted]

13 forced to the table or--and [Redacted]

14 [Redacted] before we have had a chance to present to

15 this Tribunal our case that this proceeding, CGR

16 proceeding, violated numerous rights, substantive and

17 procedural, under the Treaty. Those aren't ripe for

18 disposition yet. Colombia is right about that, but

19 this proceeding is where those should be heard, and

20 while this proceeding is being heard, this arbitration

21 is going forward, Colombia should not be free to rove

22 around the world looking for assets [Redacted]

[Page 81]

[Redacted]

Now, with respect to the Claims that were made in the latter part of this presentation that this was no big deal, that there was no harm coming our way, it is simply not the case--and Mr. Torrente's Witness Statement makes it very clear--that assets could be frozen under Colombian law. And it is not true, as he also explains, that there would be a stay of proceedings without a bond. The Application can be made without a bond in Colombia for a stay--and I will turn in a moment to the significance of the availability of that Colombian proceeding--but Colombia would be free to enforce the CGR Award in Colombia, and the only way to halt the seizure and sale of those assets would be by putting up a bond, which I believe would have to be equal to 150 percent of the amount awarded or roughly, well, using, Colombia's number, about USD 1.3 billion.

But I think the key point here is Colombia is telling two different and contradictory stories at once. That there is no threat. That their campaign is,

[Page 82]

if anything, just getting going. That they face these barriers to success. And at the same time they demand the right to go forward.

We invited them, before bringing these proceedings, to agree to a stay and to meet with us and discuss the parameters of a stay, and we were simply told that Colombia would act in accordance with its laws. Fair enough. And then we brought these proceedings. But if they really mean what they have just taken most of the morning saying, that there is no threat here because there is nothing really happening, let them give an undertaking that they won't bring these separate proceedings and we can all go home.

The vigor with which they assert their right to bring these proceedings directly contradicts their claim that there is nothing here, and they can't have it both ways. If they want this right, and they're going to pursue my client, then they're subject to a restraint.

Now, with the cases they cite--and the Tribunal will form its own view about the scope of

[Page 83]

Article 10.20.8--each one of those cases involved the core of what was challenged. The slide that was put up with the quote from Mr. Vandevelde's treatise on Bilateral Investment Treaties makes that point. It says: "A tribunal would not have"--and that's their Slide No. 8--"A tribunal would not have the authority to order a host State not to enact or not to enforce a law." Well, our application does not seek to have Colombia enact or not enforce its law, however much of an outrage to international law their conduct is. And then says it's based on Article 1135 of NAFTA, and says “it responds to concerns raised by critics that investor-State arbitral tribunals would have the power to invalidate U.S. law or overrule decisions of U.S. courts.” For those who follow U.S. politics, the claim that ICSID tribunals are secret courts that will somehow interfere in U.S. policy.

We're not asking that. We're not asking for an injunction against Law 610. We're not asking that Colombia's Congress be directed to repeal Law 610. We're not asking for an injunction that the CGR act in accordance with Law 610 and not proceed against an

[Page 84]

entity that's not a fiscal manager. We're not asking for an order directing that the CGR recognize minimal standards of due process, in terms of hearing evidence, in terms of excluding evidence, in terms of not following retroactive--applying retroactively a statute. None of that is at issue here. What's at issue is, whether or not, in the interest of fairness, preserving the rights of the Parties, my clients are entitled to an order stopping the enforcement through separate proceedings. And if I made a slip of the tongue and said phase at one point in my presentation, I apologize, but there's--these are separate proceedings. Their own submission makes that clear.

There is no reason to deny that relief.

There is nothing on the face of the Treaty that prevents this tribunal from exercising its powers, going back to Electricity Company of Sofia and continuing to Merck versus Ecuador or all the cases that we cited, stopping the enforcement of unjust measures in take--unjust decisions taken in violation of international law. That's all we ask you. We're not seeking--Colombia can adopt what rules it seeks,

[Page 85]

and we do not dispute that the Tribunal lacks power to enjoin those rules as rules. But the Tribunal has ample power to enjoin the enforcement of a judgment or award following those rules in separate proceedings.

And I have to say changing a line to a star doesn't really change anything at all. It's quite clear that even on the single Colombian proceeding, which was the entire subject matter of the presentation we've heard, it's a separate proceeding. There isn't even an attempt to argue that proceedings outside of Colombia through foreign courts or, for that matter, proceedings within Colombia before the Colombian courts somehow are excluded from this Tribunal's remedial powers by Article 10.20.8. It's an exception to the general rule. The way they construe it, as if anything even touching on a challenged measure somehow falls within the scope of the exclusion, is simply wrong. It's wrong as a matter of linguistics; it's wrong as a matter of the history of the proceeding; it's wrong as their own authorities say is the purpose of the treaty provision.

[Page 86]

With regard to urgency, I know that--with regards to urgency, it has simply a different meaning here. It means relief that cannot wait until the Final Decision. I mean that's clear from Perenco and all the other cases we have cited. The cases they rely on all involve precisely what we agree the Treaty concerns, which is, in effect, a directive to change the measure being challenged. What we've challenged here is the CGR proceeding. What we ask be enjoined are the separate proceedings that Colombia is, after listening to their presentation, on the brink of commencing, to enforce that before this Tribunal has a chance to rule on the merits.

And there is a final point I would like to make. The presentation conflates the auctioning of seized assets from the freezing or seizure of those assets.

[Redacted]

But again, I think there is no reason to reach that because the injunction against enforcement that we seek is amply,

[Page 87]

comfortably within the scope of the Treaty. It's amply and comfortably within the scope of the dozens of cases that have granted injunctions against the enforcement of administrative, tax, or judicial decisions of countries that have violated their international-law obligations, and the exception here does not control.

Unless the Tribunal has any further questions, that concludes our rebuttal, Mr. Chairman.

PRESIDENT NUNES: Thank you, Mr. Sills.

Mrs. Frutos-Peterson, are you ready for your surrebuttal?

MRS. FRUTOS-PETERSON: Yes, Mr. President.

Thank you.

REBUTTAL ARGUMENT BY COUNSEL FOR RESPONDENT

MRS. FRUTOS-PETERSON: I want to start by saying--I will not take too long. I think our case is very clear. Our arguments are very clear not only in our written submission but also in our oral argument. I will just take a few ideas that I heard here today from counsel for Claimant, just to clarify certain points or even rebut some of the points that they are

[Page 88]

making in their presentation.

First, I would like to start by saying that, as you probably noticed, Claimants do not put any efforts in trying to discuss Article 10.20.8, the second sentence of the provision. And then when they tried to say something about it, they are trying to now indicate that what they referred to as a different proceeding--we heard that a lot this morning--and I think they are linking that different process to the collection process.

So, by the way, Members of the Tribunal, if you look at Claimants' Application for Provisional Measures, you will see clearly that their request was to enjoin the enforcement of the Decision, of the Ruling with Fiscal Liability. After that, when they presented their Reply to their emergency application, they made a slight difference in their request. They did not--they still continue to refer to the enjoinment of the Decision or as we call it the Ruling with Fiscal Liability, but they created this argument now that it's not per se the enforcement of the Decision but it's the process, it's the collection

[Page 89]

process, and the collection process is different.

I hope that it is clear for the Members of the Tribunal, in our submissions and with our oral presentation today, that is not a different process as they want you to believe. It is an integral part of the Fiscal Liability Proceedings. It's the first stage in that process.

I think what the confusion here or--I mean, if there is any confusion or that's the argument of Claimant says that they are trying to make the division where there is none. If they are complaining before this Tribunal about alleged violations of the Fiscal Liability Proceedings, of course, the natural consequence of that Fiscal Liability Proceedings is the ruling, and implementing the ruling means collecting--applying the Fiscal Liability Proceedings, as you see it on the slide here, as we presented to you today, means collecting the amount set forth in the ruling.

So, the problem that Claimants has is that it's the same Measure. And if it is the same Measure, then there is a clear prohibition under the Treaty.

[Page 90]

Claimants claim to you, invoking the Arbitration Clause that is in the Treaty by bringing an arbitration against Colombia, they are accepting all the rules, all the provisions that are included in the Treaty. Article 10.20.8(ii) is part of the Treaty. There is no way to turn around. So the Measure that they're seeking here is the effect--I'm sorry, the Decision--the Decision they are trying to prevent from enforcement is the natural effect, is the consequence, the natural effect of the Fiscal Liability Proceeding, okay?

Let's assume that there was not a Ruling with Fiscal Liability. They will not be here; correct? So, this is why it is so clear--you know, it is so clear--that we're talking about the same Measure.

Let me just go back to my notes, and I'm sorry because I'm having trouble here. I don't know how to get back here. Okay. Thank you.

So, another point that I really want to make clear to the Tribunal, with all due respect, Respondent is not changing its argument. Colombia has

[Page 91]

been very emphatic and very consistent in our defense here. Colombia's law especially set forth how the CGR may go about collecting an amount in a Ruling with Fiscal Liability. Under Colombian law, the CGR will renew its search for assets and eventually attempt to attach those assets. However, the law alone, by itself, does not put Claimants in threat or harm.

And I want to talk about that because there is no necessity and urgency to avoid an irreparable harm in this case. Even assuming that Claimants can escape the second part of Article 10.20.8 of the Treaty, which we submit to you that they cannot because we just showed you how it's exactly the same Measure, but even assuming that you consider that is a separate proceeding, as Claimant likes to present it to you, we said that there are not--they don't comply with the test for Provisional Measures, and they don't comply because they like to come to you and repeat again and again that there is this chasing around the world, you know, to try to attach their assets around the world. They haven't shown to you any single processes, any single proceedings where Colombia is

[Page 92]

seeking attachment of assets.

We have explained to you the process for the enforcement collection. We have explained to you how Claimants have remedies--not only administrative remedies but also judicial remedies--that they can access under Colombian law in order to attack, if they wish, the enforced collection part of the process.

So, but they haven't shown you any Attachment Proceedings that Colombia is now going to try to attach the Claimants' assets.

So, we are not hiding that that is a normal consequence of the process. No. It's the regular, natural thing. So, if there is a ruling, the next step in the ruling is to enforce that ruling, and as part of the enforcement of the ruling, you will see collection processes, whether domestically or internationally.

First, Colombia will have to locate assets.

[Redacted]

I mean, for the past

[Page 93]

four years they haven't found anything, so I honestly don't think --what are we discussing here because there is clearly not imminent harm for the Claimants in this case.

I think I have covered--let me just check with my colleagues, but I think I have covered all the points that I really wanted to discuss in our rebuttal.

I think there is one last point that I just want to mention. They made a claim this morning--or they presented to you this concern that they have about the waiver, and they discussed the provision in the Treaty. I don't have it in front of me, but I was just looking at the waiver provision as indicated by--thank you, Maria Paulina--as indicated by the Treaty. I mean, they stop on the second paragraph, but if they continue reading on the third paragraph, you can see that “notwithstanding paragraph 2(b), the claimant [...]may initiate or continue an action that seeks interim [injunctive] relief and does not involve the payment of monetary damages before a judicial or administrative tribunal of the respondent, provided

[Page 94]

that the action is brought for the sole purpose of preserving the claimant's or the enterprise's rights and interests during the pendency of the arbitration.”

So, we don't see how Claimants could shield themselves from saying that there will be a problem if they access the administrative remedies or the judicial remedies that they have under Colombian law.

Meaning--and I think this is where I was going--meaning that they could go ahead and ask for the Stay of Enforcement before Colombian courts, which is--actually, we said it in our papers and in our presentation today--which is also possible, you know, under the annulment remedy that the Claimants will have under Colombian law.

I think, Members of the Tribunal, those are the points that I wanted to cover on rebuttal. I think our submissions are very clear, and, I think, you saw our presentation. If you have any questions, for us, of course we are here, available to answer them. Thank you so much.

PRESIDENT NUNES: Thank you, Mrs. Frutos-Peterson, for your comments.

[Page 95]

I think, in terms of presentations and rebuttals, we are done.

Now, the last slot of our hearing today is the allocation of time for questions by the Tribunal.

Let's start with Mr. Beechey.

Do you have any questions?

ARBITRATOR BEECHEY: If I may, Mr. President.

QUESTIONS FROM THE TRIBUNAL

ARBITRATOR BEECHEY: Mr. Sills, so there is absolutely no doubt about it at all, would you be kind enough to look at Article 10.20.8 of the TPA? And so there is absolutely no doubt about this whatever, looking at the sentence which is at the heart of the debate we've had today, "A tribunal may not order attachment or enjoin the application," and then comes "of a measure alleged to constitute a breach referred to in Article 10.16."

To be absolutely clear, what do you say is the Measure alleged to constitute a breach referred to in Article 10.16?

MR. SILLS: The CGR Decision.

[Page 96]

(Overlapping speakers.)

MR. SILLS: And I should say the CGR proceeding that led up to it.

ARBITRATOR BEECHEY: Yes.

So, I'm correct to understand your position to be that there is a very clear, bright line between any interim measure which might be said to go to that decision itself which you would say, as I understand it's common ground, is properly the substantive dispute before this Tribunal to resolve ultimately, and the attempt that might be made to enforce results of--enforce that decision on a wider stage? That's the bright line you draw, isn't it?

MR. SILLS: I suppose there could be a dotted line as well, but, yes, that's exactly right.

I'm sorry, that was a poor attempt at a joke.

ARBITRATOR BEECHEY: That's all right.

MR. SILLS: Yes, that's exactly right. That it's between the Measure we challenge--

ARBITRATOR BEECHEY: Yes.

MR. SILLS: --and the separate Enforcement

[Page 97]

Proceedings.

Most strikingly, Mr. Beechey, with respect to the foreign proceedings that they're threatening, but with respect to any enforcement proceeding because enforcement--every lawyer is different from establishing liability, and there are two different things, there are two different proceedings, and you're exactly right, that's the line we draw, and we think it is a bright line.

ARBITRATOR BEECHEY: All right. And it was suggested a few moments ago in surrebuttal that it is open to your clients to apply to the courts in Colombia for some sort of stay of these Enforcement Proceedings. Is that a step that is being considered, contemplated? And if it has been and it's not been pursued, why is that?

MR. SILLS: That is a misstatement of Colombian law, but with the Tribunal's permission, Mr. Beechey, I would ask my colleague, Mr. Conrad, to address that.

ARBITRATOR BEECHEY: Thank you.

MR. CONRAD: Thank you, Mr. Beechey and

[Page 98]

Members of the Tribunal, Counsel.

The issue is as far as timing of that is not ripe quite yet. There is a proceeding or a time period. We submitted as part of our jurisdiction statement to the exclusive jurisdiction of the ICSID Tribunal. One issue that I would tell you as far as correction regarding pleadings from Colombia--and I think they're in our pleadings as well-- as far as that Contentious Administrative Court proceeding basically seeking a nullification and a restoration of rights on behalf of the respondents, and any respondents are able to do it, but the only mechanism and filing of that proceeding--and Colombia admits this in their papers--is that it would stop an auction of the assets not a seizure or freezing. And so, there is no way to stop the freezing or seizing without the posting of a bond, but I wanted to make that point clear that it's separate and different from what may be overlooked by Colombia by their overemphasis only on the auction part of it, of stopping that.

I hope that answers your question,

[Page 99]

Mr. Beechey.

ARBITRATOR BEECHEY: Yes, it does. Thank you very much.

One question, if I may, to Ms. Frutos-Peterson: You were telling us, if I understand it correctly, that there is no worldwide attack, as it's being described, upon the assets of Claimants--you said there is nothing here--but it is clear there could be moves--and it's been said, and you have told us, there has not yet been--sorry, no assets have yet been found, there has been nothing so far that's both in Colombia and overseas. Assume for a moment it's right that it's not a question-- so much a question of any ultimate nailing down of any assets but in the meantime there is an opportunity for freezing orders of very substantial sums. And assume against you--and I ask you to accept it as an assumption--that the harm that will be caused by any such action could not be remedied ultimately in damages were the Tribunal to determine that Colombia should not have taken the steps it did, if that's right and if it's accepted that the Tribunal

[Page 100]

ultimately can consider the merits of the underlying decision, is there any basis at all for inviting Colombia to consider whether or not it would voluntarily hold off until we've had an opportunity to look at the merits of the underlying disputes, assuming, first and foremost, assuming we have jurisdiction to do so? So either until we have that Decision on Jurisdiction finalized or until such time as we consider the merits?

MRS. FRUTOS-PETERSON: Thank you, Mr. Beechey, for your question.

I think a quick answer will be, unfortunately, "no" because the CGR, of course, is an independent, you know, agency or institution, if I can call it that way, from the Government. So, as such, it has an obligation as well to enforce, you know, Colombian laws and its regulations. And so they will--or they are now actually doing that. I mean, they need to continue with the processes as, you know, Colombian law indicates that they should.

But let's be clear here. It's not that they can go around the world and chase those assets as they

[Page 101]

please. There is an external process, you know, as we have shown to you; you saw it in our chart.

And by the way, the chart that is in our Reply, it also has a star. We did not change the stars for the dot-dot-dot line, so you saw within that chart where we are. We are in the very early stage of the whole process. This could take years.

At some point, yes, the CGR will start seeking for assets, you know, to attach them; and, if they found them, they can proceed with the attachment, the Authorities can determine the attachment. But as my colleague Elisa Botero explained when she was explaining that chart to you, you know, those assets, they're not going to be auctioned, you know, until all the different stages in the process, including the judicial remedies that Claimants have, you know, are all--are completed, and the authority, the judicial authority, indicates that it is possible to auction the assets.

You know, so I would like you to remember that part because, you know, we consider that is extremely important. It's extremely important because

[Page 102]

even if they were to find certain assets, you know, and even if they could be able to attach them, you know, we are still not in a phase where those attachments will be auctioned. They cannot because they have to--the whole process has to follow all the different stages, if I can count them, if I can say it that way.

So--but in connection with your main question, which I think it is, that if Colombia will be able to stop this until you have an opportunity to look into this case, I think the answer is "no." As we had indicated in our pleadings, the CGR could not--I mean, Colombia could not do that because we're talking here about an independent agency doing this work under Colombian law.

ARBITRATOR BEECHEY: Thank you very much. Thank you, Mr. President.

PRESIDENT NUNES: Thank you, Mr. Beechey.

Professor Kohen.

ARBITRATOR KOHEN: Thank you, Mr. President.

So, I have one question for each Party, and a third one for both.

[Page 103]

So, for Claimants, you considered that the Enforcement Proceedings are different from the Fiscal Liability Proceedings, and my question is: If they are separate, if the Enforcement Proceeding is separate from the Fiscal Liability one, does that mean that you consider the Enforcement Proceeding as falling beyond the scope of your claim? That's the question for the Claimants.

MR. SILLS: The Claim that we allege, Professor Kohen, does not, on its face, include these Enforcement Proceedings. I mean, are they causally linked in some sense to the proceeding? Obviously so. Mrs. Frutos-Peterson said they were the natural consequences or the natural effect. But I think the point here is that we're talking not so much about the concept of whether it's part of the Claim but whether or not it's the Measure--it's the application of the Measure challenged because that's the treaty language that Colombia relies on. So I--we wouldn't contend, of course, that the Enforcement Proceeding has nothing to do with the underlying proceeding because otherwise there would be nothing to enforce, but that is limited

[Page 104]

language, and it's limited language--it doesn't say "arising out of or related to." It doesn't say "related in any manner whatsoever." And you have to ask: Where would it end? Would it end with these Colombian proceedings? That was the focus of Colombia's presentation[Redacted] Those are all, in some sense, natural consequences.

So, with respect, I think that conflates two issues. It certainly is a natural consequence of a finding of liability that there be Enforcement Proceedings, but that doesn't answer the question of whether or not those Enforcement Proceedings are separate or, to put it another way, a separate measure that don't fall within the exception set out in Section 10.20.8 to the general principle that the Tribunal has power to grant Interim Measures to preserve the status quo, to prevent aggravation of the

[Page 105]

dispute, to preserve its exclusive jurisdiction. And so the answer is no.

Our Claim and the basis for the ultimate relief we seek, an offsetting award, similar to the offsetting award that was granted in the Glencore case, which also arose out of violations of international-law obligations by the CGR that those are--excuse me one second--that is the relief we seek. We seek this relief as an incident in order to preserve our right to secure that ultimate relief, the offsetting award, to prevent the aggravation of dispute by increasing by orders of magnitude what's at stake because [Redacted] is much greater and more complicated and more aggravating--and aggravated.

I hope that answers the question, because it seems to me the question before the Tribunal is whether or not the separate proceedings do or do not fall within the exclusion in the second sentence of this treaty provision we have all been talking about, which turns in significant part on what does "application of a measure" mean? And in all of the

[Page 106]

cases cited by Colombia, that was this harm that's talked about by Professor Vandevelde. That is, the law-making by a tribunal or a respondent State.

That's not what we are asking here. We are asking for a stay of enforcement pending a decision on the merits. And either way, that stay, if granted, will end with the Decision on the Merits. If we prevail, then we no longer need interim relief because we will have succeeded defending our rights. If somehow we were to fail, then Colombia will be free at that point to take that award around the world and try and enforce it. We don't dispute that. But in the interim, the Tribunal should be allowed to do its work and hear this case and make a decision as to these rights.

And with regard to the very last point, as a matter of international law, Colombia is unitary. It speaks for all of its agencies, judicial, administrative, or even if they're characterized as independent, so there is really no question that this is relief that can be granted even though it's the CGR whose conduct has brought us here because the CGR's

[Page 107]

conduct is Colombia's conduct for purposes of international law.

ARBITRATOR KOHEN: Just to understand well, assuming that the Contraloría General de la República goes ahead with the enforcement; assuming that the Decision is enforced either in Colombia or elsewhere, would you include the consequences of this in your final Prayer for Relief, or not?

MR. SILLS: If they caused damage, we would, I suppose, have a separate claim for that, but it's not presently before the Tribunal and whether it would be in the form of a separate proceeding or not, I have to say I think it's premature. But it's not part of our claim now, and we're trying to avoid aggravating the dispute and turning that into a claim.

ARBITRATOR KOHEN: Okay. Thank you.

Now I have a question for the Respondent.

So, the Respondent alleges that if the Tribunal decides to indicate the Provisional Measures, this would prejudice third parties. That was the wording employed. My question is: Would the third parties be prejudiced or rather they would benefit

[Page 108]

from a Decision on Provisional Measures by this Tribunal as requested by the Claimants?

MRS. FRUTOS-PETERSON: Thank you, Professor Kohen.

We submit to you that there will be--there will be a prejudice against the third parties, and--you know, what we meant by that is, as you know, the Decision, the Ruling with Fiscal Liability, was rendered not only against Claimants here, you know. There are in total 16 Parties. So we believe that, by preventing these Parties, you know, or if you were to--I really don't know how because I just heard counsel for Claimant explaining, you know, the literally the link between those two, but anyway, assuming that we are not in the exception of Article 10.20.8, the prejudice will be that those Parties will be subject, you know, to the processes, and these Claimants were not going to be subject to those processes, so that's the prejudice that we see for the third parties.

For the State, you know, we also see a prejudice. You saw it in our papers because that will

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mean that the State, as a sovereign entity, is not allowed to execute--you know, to enforce its own laws.

So, I hope that that answers your question, Professor Kohen.

ARBITRATOR KOHEN: Thank you.

Well, I have a question for both Parties, and it's related of the legal nature of the FPJVC, whether it is a corporation or juridical person, or "persona juridica" in Spanish, or not. I wouldn't like to have a discussion here on the issues of jurisdiction because the matter is also relevant for jurisdiction. But with regard to the specific problem of Provisional Measures, what would be the impact with regard to the Provisional Measures requested by the Claimants of the fact that FPJVC is or is not a corporation?

I hope my question is clear. It's for both Parties.

MR. SILLS: I suppose, since FPJVC is a claimant, we should go first on that.

FPJVC is not a corporation, but it is, under the law under which it was created, a juridical entity

[Page 110]

capable of suing and being sued. It's a New York joint venture. And under New York law--I think everyone will agree governs here--I think that's common ground because that's the law under which the joint venture came into being.

A joint venture is treated as a partnership. It's a partnership organized for a particular purpose. And as such, it can sue and be sued. For that matter, it was--it was FPJVC that executed the underlying Contract so many years ago which ultimately brought us all here today. But joint ventures, under New York law, have legal personality; can sue and be sued. And there's of course no restriction under international law that I know of that only corporations and natural persons can be Parties. And, in fact, the Treaty here, when it defines "investor"--and we go through this in our papers, Professor Kohen--specifically refers to a joint venture as an entity capable of acting as an investor. I mean, that's clear on the face of the Treaty.

So, I frankly don't see if there is any serious basis for advancing the Claim that the joint

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venture, although not a corporation, is not a proper party here.

ARBITRATOR KOHEN: My question also aims at establishing the impact of potential Provisional Measures or not on assets of FPJVC and the Claimants in general.

So, what would be the impact if Provisional Measures are not granted or if--are not granted? What would be the impact on assets?

MR. SILLS: Well, the assets are the assets of the members of the joint venture; and a joint venture, like a partnership, is not a limited liability enterprise, but that doesn't mean that it's not an entity. So, absent interim measures, Colombia would be pursuing--or CGR would be pursuing--the assets of the two members of the joint venture. If our law firm were made a respondent in a Colombian Fiscal Liability Proceeding and there would be an award, my assets and Mr. Conrad's assets would be at risk. We're partners in the firm. But that doesn't mean that the firm doesn't exist for juridical purposes.

[Page 112]

So, I think the answer to your question is the joint venture has no assets other than the assets of its two members, and so the financial impact will be felt by the JV but by the joint venture through its members, and its members will, of course, suffer an impact from their assets being seized and so on.

ARBITRATOR KOHEN: Thank you.

Respondent, please?

MRS. FRUTOS-PETERSON: Thank you, Professor Kohen, for your question.

I want to start by saying two things:

First, you know, the--and I also have trouble remembering the acronym--FPJVC is a contractual joint venture. I'm not going to comment on the personality of that or of FPJVC because I think that's one of our allegations, you know, on jurisdiction. You know, you have all our position and objections in our Memorial, and I invite the Tribunal to go there.

But I think to answer quickly your question, Professor Kohen, is that they are not a party of the Fiscal Liability Proceedings, so, you know, the only party to that process, you know, is Foster Wheeler and

[Page 113]

Process Consultants, and that's it. So, they are not, you know--the Authorities, of course, would not have any say, in case --assuming that there were assets to be attached on FPJVC.

But as I told you--I mean, if you go to the Fiscal Liability Proceedings and also, you know, the ruling, you will realize that they are not named there.

Thank you.

ARBITRATOR KOHEN: Thank you.

Mr. President, I don't have any further questions.

PRESIDENT NUNES: Thank you, Professor Kohen.

I have one question for Claimant here. I heard your comments early this morning about the status quo, but I would like if you could at this point elaborate a bit and be more precise in terms of the status quo that would have to be maintained, not aggravated, that you have in mind with the Measures requested to the Tribunal, please.

MR. SILLS: Mr. President, right now there

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is the CGR Award, and we are looking at--we have been told--Enforcement Proceedings, and it sounds very much as if they're building up a head of steam. So, the risk to my clients is freezing, the seizing, and the sale of their assets, and that's what we seek to prevent. And I do think that, in crafting an Order for Interim Relief, the Tribunal, this Tribunal, should do no more than necessary.

So, for example, Colombia has spoken of its efforts to identify assets. We don't seek relief against that because their efforts to identify assets that might--again, assuming we were not to prevail in the underlying arbitration-- would be available, and we would agree that Colombia, if it so chooses, should be free to seek to identify assets, but that's where the line should be drawn because a freezing order will have the same devastating impact on our clients as the sale of those assets because once they're frozen, they're unavailable for use in the business. I put to one side the impact on other companies. I mean, there--these were companies in the construction business, their assets are their working capital. So,

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for example, and only one example, when they go to seek a Performance Bond in connection with either bidding on a job or getting the job, if those assets were frozen, no issuer will look to those assets as security for a bond.

So, the relief we seek, to be more precise, is to draw the line at Colombia's efforts to identify assets in Colombia or anywhere else. We don't ask for a restraint against that because the identification of assets doesn't threaten irreparable harm to us. But if Colombia somehow prevails, then we would agree they should have the benefit of being able to search for assets now. We think it will come to nothing because we expect to prevail in the Arbitration, and then this issue becomes mooted. But if somehow it doesn't, they would--they wouldn't have to start all over again when the Final Award is issued. That line should be drawn. They can't freeze, they can't seize, they can't attach, and they certainly cannot sell. That should wait until there is a decision on the merits.

And, of course, they shall be enjoined from any coercive or turnover or freezing proceedings

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before the courts of any other sovereign as well.

PRESIDENT NUNES: Okay. Let me go back to one of your points raised now in response to my question.

Is it correct my understanding that seizing, freezing, and auctioning would have, from your perspective, the same negative effect on Claimants, even if the assets are not auctioned?

MR. SILLS: Well, not the same. If it's sold, it's even worse, but the same in the sense that it would cause immediate and irreparable harm to the business of the Claimants--I mean, if someone said to any businessperson, "Would you rather have your assets frozen or sold," you would probably opt for freezing because they might be unfrozen at some point and you could salvage some value from it. But the fact of the matter here is that the freezing would be so damaging that it ought to be enjoined.

I mean, what we're trying--by drawing this line, Mr. President, what I'm attempting to do is to ask for as much relief as we need and no more. So, you know, in the sense that execution is worse than

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imprisonment, it's not the same, but it's over the line in terms of damage to the business.

And Colombia has no meaningful claim of harm if they can't get a freezing order during the pendency of this action. And particularly in jurisdictions that grant or waive an injunction, worldwide freezing orders, the impact on a business of a freezing order--I don't think there is any serious debate that the impact of such an order is devastating. That's why the courts of jurisdictions that have followed the lead of England, and are willing to grant such orders, are extremely cautious in granting them and look very closely at the presentations that are made. Not just the duty of full and fair disclosure but at the underlying merits before granting them, precisely because it's such a remarkably powerful tool in the hands of a creditor.

And it's for that reason that other jurisdictions, including--well, reasons why other jurisdictions severely limit that kind of relief. But that is relief that's available in many jurisdictions around the world, including jurisdictions in which our

[Page 118]

clients have assets. And, of course, a worldwide freezing order is worldwide. So, if you do it in one jurisdiction, it would bind the company everywhere.

So, I think--and I think the experience of the business community with freezing orders is that they're a very powerful tool; that they have to be granted very cautiously, not in all circumstances; and it is precisely because of the kind of harm that we're talking about that they can cause.

So--and I apologize for this being such a long answer, but it's a very important question.

Yeah, we think that freezing and seizing, which would be the next step, you know, asserting some kind of title or ownership interest, and then auctioning and having the property be put into the hands of a third party, is given value for it, those are escalating harms, but we think the point stopping the process is at the freezing stage. But as I say, we do not ask for an order that would restrain Colombia from doing whatever--well, doing--Colombia from taking reasonable steps to identify assets that might someday be subject to further coercive process.

[Page 119]

MRS. FRUTOS-PETERSON: Mr. President, may I say something? It's related to that question.

PRESIDENT NUNES: I will turn to you, but--

MRS. FRUTOS-PETERSON: Yes.

PRESIDENT NUNES: --I have a final question.

MRS. FRUTOS-PETERSON: Yes, thank you.

PRESIDENT NUNES: A further clarification from Claimant.

So I understand what you said, I thank you for the answer, but the question is the impact--the seizing and freezing has an impact on the company or the Company's reputation, and also in conducting its operations following those two actions by Colombia. Am I right?

MR. SILLS: Absolutely, it would.

PRESIDENT NUNES: Okay.

MR. SILLS: Yeah, it would, sorry.

PRESIDENT NUNES: I would like to be absolutely sure. I do not have the intention to putting any words in your mouth, but my point is --I will go back. When you were responding to Mr. Beechey's question, you said that there was a

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mistake by Colombia when it is stated, the representatives of Colombia in this case stated, that you would have access to courts in Colombia to stop seizing and freezing. And your point was if there is a mistake, only auctioning may be stopped by courts. I would like, if you could, explain a bit briefly which is the difference? I will ask the same question to Mrs. Frutos-Peterson, but I would like you to be more explicit and say mistake.

MR. SILLS: Okay.

PRESIDENT NUNES: Why mistake?

MR. CONRAD: Thank you.

I guess the mistake--to clarify that statement, Mr. President, was to state that Colombia has focused on basically this alternative argument or alternative forum for us to seek relief by virtue of seeking a stay of enforcement by filing a nullity or "restoration of rights" action. The thing that--I guess it's more of an omission by Colombia. Colombia is only saying--and this is our understanding as well--is that the filing of that type of action, again, save and accept that that's a separate

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proceeding, obviously, than this Tribunal, is that it would only have the effect of staying any type of auction efforts.

So, if you remember that flowchart that--there's two of them, one that we use, which is part of Colombia's memorial on its preliminary objections and one that they presented here today, at the very end of that flowchart, the auction proceeding, so that is the only measure or part that would be enjoined by filing of a Nullity Action. It will not enjoin the freezing and seizing of the assets of the Claimants. That's the--I mean, when I say "mistake", it's more or less an omission--and I don't think Colombia disputes this because this is the exact, you know, basically quoting or paraphrasing what Colombia has taken --the position in their papers is that this only prevents the auctioning. And again, as the Tribunal and Mr. President rightly points out,

[Redacted]

and so this is really not an option for the Claimant, and this is why we are seeking the relief that we are,

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you know, asking the Tribunal to grant the limited relief here as articulated by Mr. Sills because of this hole or gap.

MR. SILLS: And I think on that point,

Mr. President, it's important to realize that assuming that that right is real and not illusory, that it--in order to get a stay of seizing or freezing, it would be necessary to post the Bond, and this is gone into in some detail in Mr. Torrente's Witness Statement; and, of course, his experience as Chief Legal Officer there speaks for itself.

But the only effect of filing the proceeding without giving this enormous bond would be that the assets could be taken into the possession of the Court or the Colombian State unavailable to anyone else and held subject to auction which has, as a practical matter, I think as a question for now, the same impact on the Company. I put to one side whether or not we would simply be back before the Tribunal, but let me not start down that path.

But the right means very little. It's at most a paper right because it doesn't give any

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opportunity to stop the seizing or freezing of those assets without posting a bond [Redacted]

PRESIDENT NUNES: Okay. Thank you.

Mrs. Frutos-Peterson, would you start by responding to this question which, in fact, was for both of you, and then you add what you asked to.

MRS. FRUTOS-PETERSON: Thank you, Mr. President.

I would just focus on the question, and I do apologize because, you know, to me it's very hard to think and go beyond the questions of the Tribunal on this point because I see so clearly the connection, you know, and the natural consequence, as I told you, that the natural consequence being the ruling, okay? And if they are asking, the Measure is the Fiscal Liability Proceeding which leads to render a ruling, to me, is exactly the same Measure.

But let's assume that we're not discussing that, and they are answering your question in connection with the remedies. It is important that maybe we can share the chart that we had in our

[Page 124]

presentation here again, if my colleague is ready to do that, because I want you to see that--María Paulina, can you do that? Oh, thank you so much. You will see that we have here the Ruling with Fiscal Liability, okay? And then if you go to the right side of the slide, you will see that that's the annulment action, it's a judicial remedy that the Parties will have. I agree that if the Claimants were to proceed to the annulment action, they have until January--I don't know exactly the deadline, but they have a few months now in order to exercise that right.

If they were to do that, Mr. President, it is true that what we call the "Forced Collection" phase, you know, of the Ruling with Fiscal Liability, it will not be stopped. But, under the annulment action before the court, you know, they will have the possibility to apply for Provisional Measures, including a provisional stay of the enforcement of the Ruling with Fiscal Liability.

And I also ask my colleague to bring back this slide to you because, as you can see here under the Administrative Code, it is very clear, Article 232

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discusses the bond, it made the express point that they do not need to file the bond.

So, we don't understand why they get this idea that there is the obligation to file the Bond.

The Administrative Code is extremely clear. It says that no bond shall be required, so--and they do have the possibility, you know, to request to the judicial court within that annulment proceeding that I was just showing you a Provisional Measure Request to stay the enforcement of the Ruling with Fiscal Liability. And as I just said, as part of that, they will not have to post a bond.

So, I am confused because I don't understand where they get that they need to introduce a bond.

The Administrative Code, as I showed you, is very clear.

I hope that answers your question, Mr. President. I just wanted to go back to the other question that you also asked counsel for Claimant because, you know, it seems to me that the way that they are describing, you know, whether, you know, an order to prevent the attachment, you know, etcetera,

[Page 126]

etcetera, it seems to me that there is a--I don't know if there is a confusion here, but let's be clear:

First, the CGR will have to locate assets, okay? For four years they have been looking for assets, and they haven't located any, okay? So, once they locate assets, they will, in a particular jurisdiction--[Redacted] if CGR identifies an asset, they will have to go through the processes to work with those local authorities to attach them.

So--and I wanted to bring that back to the discussion, Mr. President, because, to me, it's so obvious that then we're not talking about urgency and necessity to avoid an irreparable harm. With all due respect, the role of this Tribunal is to look at the language of Article 10.20.8, in particular we submit to you the second sentence, but if you disagree with us that we're not under that sentence, then you have to go and still apply the test, you know, in order to

[Page 127]

issue a provisional measure. As a way--just taking the words of the explanations of counsel for Claimants, there is nothing here. There is no imminent harm.

So, I just wanted to bring that back to the discussion because I'm concerned that there is some confusion of how the law works, and I want this Tribunal to be very clear on how the provisions works under Colombian law mainly. So, I hope that answers your question, Mr. President.

PRESIDENT NUNES: It does.

So, I think we completed our duty this afternoon, and unless my colleagues have any follow-up questions?

ARBITRATOR KOHEN: No further questions, Mr. President, on my side.

ARBITRATOR BEECHEY: Nothing from me further.

PRESIDENT NUNES: Okay. I thank you very much.

But before we close this Hearing, let's talk about the next steps. We have agreed that, by

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November 11th, we will get a memo or memorial by Respondent with respect to the documents that were included in Claimants' presentation this morning. Of course, when I say "memorial", I say a brief memorial.

MRS. FRUTOS-PETERSON: Understood, Mr. President.

PRESIDENT NUNES: And the other point is the following: Marisa, when will we get the Transcript?

REALTIME STENOGRAPHER: I can say I can get it to everybody today, and I will send it to ICSID.

PRESIDENT NUNES: Okay, David. Thanks much.

So, for sure, you want to take a look and review the excellent work of David, but anyway, it's a right you have. How long would it take for you to review the Transcript?

MR. SILLS: Mr. President, for Claimants, we'd suggest the Parties be given a week to make any comments or corrections on the Transcript.

PRESIDENT NUNES: November 11th? The same date?

MR. SILLS: That's fine. Assuming we get it today, November 11th should be fine for Claimants.

[Page 129]

MRS. FRUTOS-PETERSON: That's fine with us as well. That's fine, Mr. President.

PRESIDENT NUNES: Okay.

MRS. FRUTOS-PETERSON: Mr. President, just one point, in order to also prepare our short memo, I will say a letter commenting on these authorities, Bob, can you send us the document because we don't have it? You said that you have it, and you can share with us in order to look at it. Thanks.

MR. SILLS: We will be happy to, and I assume this brief memorial concerns that just one document, the English-language PowerPoint presentation that we put up.

MRS. FRUTOS-PETERSON: That was my joke, Bob, but yes, it's not going to be a memorial. We're just going to look at the document and, of course, express any opinions that we have. Thank you.

MR. SILLS: Yeah. We will send that today.

MRS. FRUTOS-PETERSON: Thank you.

PRESIDENT NUNES: Okay. Any more questions or matters to be discussed before we close this Hearing?

[Page 130]

MR. SILLS: Bear with me one second, Mr. President.

(Pause.)

MR. SILLS: No, we don't have anything further, Mr. President.

PRESIDENT NUNES: Thank you.

Mrs. Frutos-Peterson?

MRS. FRUTOS-PETERSON: Sorry, I forgot I was on mute.

I just wanted to--you send us also a protocol about how to work out on the respective redactions and stuff like that? I think you mentioned November 8. If there is any problem, you know, with that deadline, if that's okay, we can--the Parties can work it out and then approach the Tribunal. I think it's going to be fine, but I just wanted to make sure that we also have that on the table.

PRESIDENT NUNES: You can keep us posted.

MRS. FRUTOS-PETERSON: Okay.

PRESIDENT NUNES: Thank you.

MRS. FRUTOS-PETERSON: Thank you so much to the Tribunal and to everybody, to ICSID and, of

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course, the Court Reporter.

PRESIDENT NUNES: Okay. Mr. Beechey? Any comments? No?

ARBITRATOR BEECHEY: Nothing at all from me. Thank you.

PRESIDENT NUNES: Professor Kohen?

ARBITRATOR KOHEN: Just to remember for the future that there are two working languages, Spanish and English--or English and Spanish, if you wish. I hope that in the future both languages will be on an equal footing. Thank you, Mr. President.

PRESIDENT NUNES: Thank you.

Okay. Before we close, I would like to thank both Parties for the work this morning and afternoon. I thank you very, very much. It was extremely useful. Several points were clarified, I suppose.

And I would like to thank the ICSID staff, our Secretary, Marisa, thank you very much for your invaluable help. And we will be in contact with you in writing or in another meeting as soon as necessary.

So, have a great afternoon and evening, and

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we will be in touch. Thank you very much.

MR. SILLS: Thank you, Mr. President.

MRS. FRUTOS-PETERSON: Thank you.

(Whereupon, at 12:49 p.m. (EDT), the Hearing was concluded.)

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CERTIFICATE OF REPORTER

I, David A. Kasdan, RDR-CRR, Court Reporter, do hereby certify that the foregoing proceedings were stenographically recorded by me and thereafter reduced to typewritten form by computer-assisted transcription under my direction and supervision; and that the foregoing transcript is a true and accurate record of the proceedings.

I further certify that I am neither counsel for, related to, nor employed by any of the parties to this action in this proceeding, nor financially or otherwise interested in the outcome of this litigation.

Signature

DAVID A. KASDAN

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