[Page 375]
BEFORE THE INTERNATIONAL CENTRE FOR SETTLEMENT OF
INVESTMENT DISPUTES
ICSID Case No. ARB/19/6
| In the Matter of Arbitration Between: ANGEL SAMUEL SEDA AND OTHERS, Claimants, and REPUBLIC OF COLOMBIA, Respondent. -------------------------------------- | --x -x Volume 2 |
VIDEOCONFERENCE: HEARING ON JURISDICTION AND MERITS
Tuesday, May 3, 2022
The World Bank Group
1225 Connecticut Avenue, N.W.
Conference Room C 3-100
Washington, D.C.
The Hearing in the above-entitled matter
came on at 9:30 a.m. before:
PROF. DR. KLAUS SACHS
President of the TribunalPROF. HUGO PEREZCANO DÍAZ
Co-ArbitratorDR. CHARLES PONCET,
Co-Arbitrator
[Page 376]
MS. SARA MARZAL YETANO
Secretary to the Tribunal
Realtime Stenographers:
MR. DAVID A. KASDAN
Registered Merit Reporter (RMR)
Certified Realtime Reporter (CRR)
B&B Reporting/Worldwide Reporting, LLP
529 14th Street, S.E.
Washington, D.C. 20003
United States of AmericaMR. LEANDRO IEZZI
MR. RODOLFO VALERIO RINALDI
D.R. Esteno
Colombres 566
Buenos Aires 1218ABE
Argentina
Interpreters:
MR. CHARLES H. ROBERTS
MS. SILVIA COLLA
MR. DANIEL GIGLIO
[Page 377]
On behalf of the Claimants:
MR. RAHIM MOLOO
MS. ANNE CHAMPION
MS. MARRYUM KAHLOON
MR. BEN HARRIS
Gibson, Dunn & Crutcher, LLP
200 Park Avenue
New York, New York 10166-0193
United States of AmericaMR. PEDRO G. SOTO
MS. ANKITA RITWIK
Gibson, Dunn & Crutcher, LLP
1050 Connecticut Ave N.W.
Washington, D.C. 20036
United States of AmericaMR. ALEJANDRO MEJÍA
MR. JUAN PABLO PANTOJA RUIZ
Cáez Muñoz Mejía Abogados
Cra. 17 ##89-31
Bogotá, Colombia
Party Representatives:
MR. ANGEL SEDA
MR. JUSTIN ENBODY
MR. STEPHEN BOBECK
MR. JUSTIN CARUSO
MR. MONTE ADCOCK
MR. PIERRE AMARILGLIO
[Page 378]
Attending on behalf of the Respondent:
MR. CAMILO GÓMEZ ALZATE
MS. ANA MARÍA ORDÓÑEZ PUENTES
MR. GIOVANNY VEGA-BARBOSA
MR. CÉSAR RODRÍGUEZ
MS. ELIZABETH PRADO LÓPEZ
MS. YADIRA CASTILLO MENESES
MR. ANDRES FELIPE REINA ARANGO
MS. MARCELA MARÍA SILVA ZAMBRANO
Agencia Nacional de Defensa
Jurídica del Estado
Carrera 7 No. 75-66 – 2do y 3er piso
Bogotá
ColombiaMS. LAURA MARÍA MARÍN MORENO
Fiscalía General de la NaciónMR. CARLOS SABOYÁ
Director de Asuntos Jurídicos, Fiscalía
General de la NaciónMS. SANDRA MARTÍNEZ
Asesora de la Dirección de Asuntos
Jurídicos, Fiscalía General de la NaciónMS. SANDRA MONTEZUMA
Asesora en el Despacho del Vicefiscal,
Fiscalía General de la NaciónMS. TATIANA GARCÍA
Directora de Asuntos Internacionales,
Fiscalía General de la NaciónMS. LILIA ROSA MENDOZA
Asesora de la Directora de Asuntos
Internacionales, Fiscalía General de la
Nación
[Page 379]
MR. ANDRES FELIPE TINOCO
Asesor en el Despacho del Vicefiscal,
Fiscalía General de la NaciónDR. YAS BANIFATEMI
MS. YAEL RIBCO BORMAN
MS. PILAR ALVAREZ
MS. CAROLINA BARROS
MR. YOUSSEF DAOUD
Gaillard Banifatemi Shelbaya Disputes
22 rue de Londres, 75009 Paris
FranceMS. XIMENA HERRERA BERNAL
Gaillard Banifatemi Shelbaya Disputes
165 Fleet Street
London EC4A 2AE
United Kingdom
[Page 380]
[Page 381]
2 PRESIDENT SACHS: Good morning, ladies and
3 gentlemen, Day 2 of our May Hearing. We will start
4 today with the observations to be given by the
5 Non-Disputing Party, the U.S., and may I ask the
6 representative of the U.S. to come closer to us and
7 take the stand there with the microphone.
10 MS. GROSCH: Good morning, Mr. President,
11 Members of the Tribunal. Thank you for giving us this
12 opportunity.
13 Pursuant to Article 10.20.2 of the United
14 States-Colombia Trade Promotion Agreement, or the TPA,
15 I will make a brief submission on behalf of the United
16 States, addressing four questions of treaty
17 interpretation arising out of the Claimants' Reply on
18 Jurisdiction and Merits dated September 19th, 2021,
19 and the Respondent's Rejoinder on Jurisdiction and
20 Merits dated February 17th, 2022. As is always the
21 case with our Non-Disputing Party submissions, the
22 United States does not take a position here on how the
[Page 382]
1 interpretations offered apply to the facts of the
2 case, and no inference should be drawn from the
3 absence of comment on an issue not addressed.
4 First, I will address the authority of
5 Non-Disputing Party submissions under Article 10.20.2
6 in interpreting the TPA.
7 Second, I will address the essential
8 security interests exception in Article 22.2(b).
9 And third, I will expand on two points
10 related to claims for indirect expropriation under
11 Article 10.7.
12 And finally, I will comment on claims based
13 on judicial or administrative adjudicatory proceedings
14 in the context of the submission of a claim under
15 Article 10.16.
16 I would like to begin my remarks by
17 addressing the weight due to the views of the United
18 States on matters addressed in a Non-Disputing Party
19 submission under Article 10.20.2. State Parties are
20 well-placed to provide authentic interpretations of
21 their treaties, including in proceedings before
22 Investor-State tribunals like this one.
[Page 383]
1 Article 10.20.2 ensures that the Non-Disputing Party
2 to a dispute under the U.S.-Colombia TPA can provide
3 its views on the correct interpretation of the TPA.
4 The TPA Parties consider Non-Disputing Party
5 submissions to be an important tool in this respect,
6 and the United States consistently includes
7 Non-Disputing Party provisions in its investment
8 agreements to reinforce the importance of these
9 submissions in the interpretation of the provisions of
10 these agreements, and the United States routinely
11 makes these Non-Disputing Party submissions.
12 Article 31 of the Vienna Convention on the
13 Law of Treaties recognizes the important role the
14 State Parties play in the interpretation of their
15 agreements. And although the United States is not a
16 party to the Vienna Convention, we consider that
17 Article 31 reflects customary international law on
18 treaty interpretation. Article 31, Paragraph 3 states
19 that, in interpreting a treaty, and I quote, "there
20 shall be taken into account, together with the context
21 (a) any subsequent agreement between the Parties
22 regarding the interpretation of the Treaty or
[Page 384]
1 application of its provisions; and (b) any subsequent
2 practice in the application of the Treaty which
3 establishes the agreement of the Parties regarding its
4 interpretation."
5 So, Article 31 is framed in mandatory terms.
6 It is unequivocal that subsequent agreements between
7 the Parties and subsequent practice of the Parties
8 shall be taken into account.
9 First, where the submissions of the TPA
10 Parties demonstrate that they agree on the proper
11 interpretation of a given provision, the Tribunal
12 must, in accordance with Article 31(3)(a), take the
13 subsequent agreement into account.
14 And second, the TPA Parties' concordant
15 interpretations may also constitute subsequent
16 practice under Article 31(3)(b). Any suggestion that
17 Non-Disputing Party submissions are not entitled to
18 deference because they are made in the course of the
19 Arbitration should be rejected. The TPA Parties
20 expressly included the mechanism to provide
21 interpretations of treaty provisions to Investor-State
22 tribunals in the course of an arbitration for a
[Page 385]
1 reason. Indeed, the International Law Commission has
2 commented that subsequent practice may include
3 statements in the course of a legal dispute.
4 Accordingly, where the TPA Parties' submissions in an
5 arbitration evidence their common understanding of a
6 given provision, this constitutes subsequent practice
7 that must be taken into account by the Tribunal under
8 Article 31(3)(b).
9 Additionally, in support of this general
10 position, we note that investment tribunals
11 constituted under the NAFTA have considered this issue
12 and have agreed that submissions by the NAFTA Parties
13 in arbitrations under Chapter Eleven, including
14 Non-Disputing Party submissions, may serve to form
15 subsequent practice. For example, the Mobil v. Canada
16 Tribunal found that arbitral submissions by the NAFTA
17 Parties constituted subsequent practice and
18 observed--observe, and I quote, "the subsequent
19 practice of the Parties to a treaty, if it establishes
20 the agreement of Parties regarding the interpretation
21 of the Treaty, is entitled to be accorded considerable
22 weight." And, I'm quoting from Paragraph 158 of the
[Page 386]
1 Mobil v. Canada Decision on Jurisdiction and
2 Admissibility dated July 13th, 2018, and I would point
3 you also to Paragraphs 103, 104, and 158 to 160 for
4 context. The Tribunal in Canadian Cattlemen for Fair
5 Trade reached a similar conclusion at Paragraphs 188
6 to 189 of its Award on Jurisdiction, dated
7 January 28th, 2008.
8 I would note also, in response to comments
9 on this issue, that TPA Article 10.22.3 which concerns
10 interpretations by the Free Trade Commission, and
11 Article 10.20.2 which concerns Non-Disputing Party
12 submissions, merely establish separate mechanisms for
13 the Parties to provide interpretations of their
14 Treaty. Nothing in the TPA text suggests that, in
15 granting the Free Trade Commission the ability to
16 issue binding, authoritative interpretations of the
17 TPA, the Parties intended to preclude themselves from
18 issuing non-binding but nevertheless authentic means
19 of interpretation of TPA provisions through their
20 submissions to investor-State tribunals or to preclude
21 a tribunal from giving such submissions the weight to
22 which they would otherwise would be entitled.
[Page 387]
1 So, to sum up this point, whether this
2 Tribunal considers the interpretations presented by
3 the TPA Parties as a subsequent agreement under
4 Article 31(3)(a), a subsequent practice under
5 Article 31(3)(b), or both, on any particular
6 provision, the outcome is the same. The Tribunal must
7 take the TPA Party's common understanding of the
8 provisions of their Treaty into account.
9 Second, I would like to address the
10 essential security interest exception in
11 Article 22.2(b). The language of the Article 22.2(b)
12 is clear, that the exception is self-judging.
13 Article 22.2(b) states, and I quote, "nothing in this
14 Agreement shall be construed to preclude a party from
15 applying measures that it considers necessary for the
16 protection of its own essential security interests."
17 The ordinary meaning of the word "considers"
18 is to come to judge or classify. Under
19 Article 22.2(b), what must be considered or judged or
20 classified is whether the relevant measure is
21 necessary to protect the State's essential security
22 interests. That this determination is made solely by
[Page 388]
1 the State Party itself is plain by the use of the word
2 "it" preceding "considers." Thus, the ordinary
3 meaning of the phrase "it considers" is that the
4 exception is for the Party itself to determine--or in
5 other words, that the exception is self-judging.
6 That Article 22.2(b) is self-judging accords
7 with the long-standing U.S. position that similarly
8 worded essential security interests exceptions in U.S.
9 agreements are to be read as self-judging. Indeed,
10 Footnote 2 clarifies that, and I quote, "If a party
11 invokes Article 22.2 in an arbitral proceeding
12 initiated under Chapter 10 or Chapter 21, the Tribunal
13 or panel hearing the matter shall find that the
14 exception applies."
15 In other words, once a State Party to the
16 TPA raises the exception, its invocation is
17 non-justiciable, and a Chapter 10 Tribunal must find
18 that the exception applies to the dispute before it.
19 Further, Footnote 2 to Article 22.2(b) is
20 prefaced with the phrase "for greater certainty,"
21 which in U.S. practice confirms that the self-judging
22 nature and non-justiciability of the essential
[Page 389]
1 security interests exception is inherent in the
2 language of the exception itself. As a general
3 practice, the United States uses the words "for
4 greater certainty" in its International Trade and
5 Investment Agreements to introduce confirmation
6 regarding the meaning of the Agreement. In other
7 words, the phrase "for greater certainty" signals that
8 the text it introduces reflects the understanding of
9 the United States and the other Treaty Party or
10 Parties of what the provisions of the Agreement would
11 mean, even if the text following the phrase were
12 absent. As a consequence, "for greater certainty"
13 sentences also serve to spell out more explicitly the
14 proper interpretation or similar provisions, mutatis
15 mutandis, "in other agreements." By explaining that
16 "for greater certainty" a tribunal shall find that the
17 essential security interests exception applies where a
18 party has invoked it, the United States signaled its
19 understanding that this is what the essential security
20 interest exception has always required, including in
21 agreements where that "for greater certainty" language
22 is absent.
[Page 390]
1 The United States previously explained the
2 use and significance of the "for greater certainty"
3 phrase in other Non-Disputing Party submissions, both
4 written and oral, including in the Alicia Grace and
5 others v. Mexico Case, the Legacy Vulcan v. Mexico
6 Case, Omega v Panamá Case, and Carrizosa v. Colombia
7 Case. We would be happy to provide those to the
8 Tribunal, if that would be helpful.
9 Finally on this point, I would like to
10 address an argument we heard from Claimants yesterday
11 that Article 22.2(b) merely allows a State to apply,
12 or continue to apply, measures that it considers
13 necessary for the protection of its own essential
14 security interests, but that Article 22.2(b) does not
15 address the question of liability or compensation.
16 The United States disagrees. Once the essential
17 security interest exception is invoked, a tribunal may
18 not, thereafter, find the relevant measure in breach
19 of the Chapter 10 obligation and may not,
20 consequently, order the payment of any compensation in
21 connection with that measure.
22 Mr. President, Members of the Tribunal,
[Page 391]
1 turning to my third topic, I would like to expand on
2 two points that the United States made in its written
3 submission on claims for indirect expropriation under
4 Article 10.7.
5 First, is that in the context of an
6 expropriation claim, a substantive element of that
7 claim is that there must exist a permanent deprivation
8 of the relevant investment. For example, the United
9 States agrees with the holding of the oft-cited
10 Burlington Resources v. Ecuador Tribunal that "a state
11 measure constitutes expropriation under the Treaty if
12 (1) the Measure deprives the Investor of his
13 investment; (2) the deprivation is permanent, and (3)
14 the deprivation finds no justification under the
15 Police Powers Doctrine."
16 Conversely, it is well-established that a
17 temporary reversible measure leading to an ephemeral
18 deprivation does not result in an expropriation. For
19 example, in Fireman's Fund Insurance Company v.
20 Mexico, the Tribunal held that one of the elements of
21 an expropriation is that "the taking must be permanent
22 and not ephemeral or temporary." Therefore, a
[Page 392]
1 non-binding final determination or a ruling that is
2 subject to challenge cannot cause the kind of
3 permanent and irreversible deprivation that is
4 required as a substantive element of expropriation.
5 Second, as we noted in our written
6 submission, under international law, where an action
7 is a bona fide, non-discriminatory regulation, it will
8 not ordinarily be deemed expropriatory. The Disputing
9 Parties accept this principle, also commonly called
10 the "Police Powers Doctrine." As this is a doctrine
11 recognized by customary international law, any
12 additional elements of the doctrine would have to be
13 established by reference to both State practice and
14 opinio juris. However, while the United States
15 accepts that State practice demonstrates that the
16 Police Powers Doctrine under customary international
17 law is subject to non-discrimination and bona fide
18 limbs, State practice does not support a further
19 requirement of proportionality, as, for example,
20 between the policy aim and the regulatory measure
21 taken.
22 There is no evidence of the kind of
[Page 393]
1 widespread consistent State practice necessary to
2 conclude that proportionality has crystallized into a
3 component of the Police Powers Doctrine. As reflected
4 in our written submission and in the 2004 and 2012
5 U.S. Model BITs, the long-standing U.S. formulation of
6 the test does not include proportionality. And I
7 quote: "Under international law, where an action is a
8 bona fide, non-discriminatory regulation, it will not
9 ordinarily be deemed expropriatory." The restatement
10 third of foreign relations of the United States's
11 discussion of the Police Powers Doctrine similarly
12 makes no reference to proportionality.
13 So, in sum, there is no widespread
14 consistent State practice that would be necessary to
15 conclude that proportionality has crystallized as a
16 component of the Police Powers Doctrine under
17 customary international law.
18 Finally, I would like to address claims
19 based on judicial or administrative adjudicatory
20 proceedings in context of submission of a claim under
21 Article 10.16. It is well-established that the
22 International Responsibility of States may not be
[Page 394]
1 invoked with respect to non-final judicial acts,
2 unless recourse to further domestic remedies is
3 obviously futile or manifestly ineffective. As the
4 Tribunal in Apotex Inc. v the United States of America
5 held in its Award on jurisdiction and admissibility,
6 and I quote, "a claimant cannot raise a claim that a
7 judicial act constitutes a breach of international law
8 without first proceeding through the judicial system
9 that it purports to challenge, and thereby allowing
10 the system an opportunity to correct itself." As
11 such, non-final judicial acts cannot be the basis for
12 claims under Chapter 10 of the U.S.-Colombia TPA,
13 unless recourse to further domestic remedies is
14 obviously futile or manifestly ineffective. Rather,
15 an act of a domestic court (or an administrative
16 tribunal) that remains subject to appeal has not
17 ripened into the type of Final Act that is
18 sufficiently definite to implicate State
19 Responsibility, unless such recourse is obviously
20 futile or manifestly ineffective. Thus, absent
21 finality, no claim based on judicial or administrative
22 adjudicatory proceedings may be submitted under
[Page 395]
1 Article 10.16 unless further recourse is obviously
2 futile or manifestly ineffective.
3 In concluding, I would just emphasize that
4 the United States stands by the interpretations set
5 forth in our written submission, although we did not
6 address all of those issues today.
7 Mr. President, Members of the Tribunal, with
8 that final observation, I will close my remarks. I
9 thank the Tribunal for this opportunity to present the
10 views of the United States on these important
11 interpretive issues.
12 PRESIDENT SACHS: Thank you very much.
13 Questions?
14 (No response.)
15 PRESIDENT SACHS: Thank you very much. You
16 are now released--you may stay in the room or
17 leave--and we will now start with the examination
18 of--sorry? Am I wrong?
19 SECRETARY MARZAL: Yeah--no, I think that we
20 had scheduled 10 minutes for the opportunities for the
21 Parties to comment.
22 PRESIDENT SACHS: Okay. Yes. So, please,
[Page 396]
1 for the preparation of the witness testimony with
2 short break, yes?
3 SECRETARY MARZAL: No.
4 (Pause.)
5 PRESIDENT SACHS: Oh, okay. Yes, I'm sorry.
6 We were to allow you to make comments in respect of
7 the observations of the United States. I overlooked
8 that.
9 We will start with the Claimant.
10 SECRETARY MARZAL: May I ask a question,
11 since I'm taking the time, these 10 minutes that we
12 had foreseen as maximum for the Parties to comment, is
13 that time--should I discount it from the total
14 16 hours, or should I add it as an extra 10 minutes?
15 PRESIDENT SACHS: Add it as extra.
16 SECRETARY MARZAL: Extra.
17 PRESIDENT SACHS: Yes.
18 SECRETARY MARZAL: Thank you.
19 (Pause.)
20 PRESIDENT SACHS: Did you wish to have a
21 short break in order to prepare your comments?
22 MR. MOLOO: Would it be okay to have maybe
[Page 397]
1 two to five minutes?
2 PRESIDENT SACHS: Five minutes is okay. I
3 think that's fair enough.
4 (Comment off microphone.)
5 PRESIDENT SACHS: Yes, because experience
6 shows that five minutes is never five minutes.
7 MR. MOLOO: That's fair enough.
8 PRESIDENT SACHS: So, what shall we say, 15
9 minutes? Is that too long?
10 MR. MOLOO: That's fine.
11 MS. BANIFATEMI: That's fine.
12 PRESIDENT SACHS: Let's resume at 5 past
13 10:00, okay?
14 MR. MOLOO: Thank you.
15 (Recess.)
16 PRESIDENT SACHS: Claimant, we give you the
17 floor.
18 MR. MOLOO: Thank you, President Sachs. It
19 was, indeed, a productive 15 minutes. Thank you for
20 that. We did have some sense of what might be coming
21 this morning, so we did prepare a few slides for your
22 benefit.
[Page 398]
1 A couple of things that we just wanted to
2 point out for the Tribunal, they will no doubt be
3 aware of this, but first of all, Colombia and the
4 United States, in their Treaty, as mentioned this
5 morning by Ms. Grosh, did specifically provide for a
6 Free Trade Commission process, where, if there was to
7 be anything that is an interpretation that was--and
8 you can see the language--10.22.3, if they wanted an
9 interpretation to be binding on a tribunal, then they
10 have a process that they go through the Free Trade
11 Commission to issue the interpretations of the
12 provisions of this Agreement. In 20.1, the Free Trade
13 Commission has that process. It says the Commission
14 may, among other things (c) issue interpretations of
15 the provisions of this Agreement. They have not done
16 that with respect to this Agreement, of course, and so
17 there is no binding interpretation of any of the
18 provisions you heard about.
19 If you look at Slide 3, which is up on the
20 screen here, you can see that the Parties have indeed
21 entered into specific interpretations of provisions,
22 and none of them relate to Chapter 10.
[Page 399]
1 The Renco v. Peru Tribunal--I think this is
2 a helpful quote--even if there is subsequent
3 agreement, which we don't know what precisely that
4 Agreement is, and that's part of the problem. When
5 you have an agreement, the reason why the Free Trade
6 Commission process is usually followed is because then
7 you have two parties agreeing to specific language,
8 signing off on it, and you know precisely what the
9 Agreement is. There is certainty. The Tribunal can
10 take that into account.
11 But even if you do say there is an agreement
12 here, the Renco v. Peru Tribunal made it clear that in
13 accordance with Article 31 of the Vienna Convention on
14 the Law on Treaties: "The Tribunal is not bound by
15 the views of either State Party although the Tribunal
16 may take into account any subsequent agreement."
17 PRESIDENT SACHS: "Must take into account."
18 MR. MOLOO: Sorry, yes, "must take into
19 account" any subsequent agreement between the State
20 Parties pursuant to Article 31(3)(a) of the VCLT. The
21 proper interpretation and how it should be applied to
22 the facts of this case are tasks which reside
[Page 400]
1 exclusively with this Tribunal.
2 And with respect to the essential security
3 provision in particular, we've given you our
4 interpretation of this yesterday, one must start with
5 the ordinary meaning under Article 31, and the
6 ordinary meaning of the word "preclude," according to
7 the Oxford English Dictionary, is "to make
8 impossible," "to prevent from happening." That's the
9 ordinary meaning of the word "preclude."
10 Issuing--allowing compensation to be paid does not
11 preclude a party from applying measures. That's our
12 position, and that was the very same argument in front
13 of the Eco Oro Tribunal in interpreting a very similar
14 provision where the Canadian Government came in and
15 made a Non-Disputing Party submission to agree with
16 Colombia.
17 And there, if you look on the next slide at
18 Paragraph 836, the Tribunal specifically said:
19 "Whilst the Tribunal accepts that the State cannot be
20 prohibited from adopting," enforcing--"or enforcing an
21 environmental measure in accordance with
22 Article 2201(3), it cannot accept Canada's statement
[Page 401]
1 that in such circumstances payment of compensation is
2 not required."
3 Canada came in and made the same exact
4 argument you heard the U.S. government make this
5 morning. This does not comport with the ordinary
6 meaning of the Article when construed in the context
7 of the FTA as a whole and specifically in the context
8 of Chapter 8 as analyzed in the preceding paragraphs.
9 So, again, in that case you had a very
10 similar situation to what you have here. You had
11 Canada and Colombia articulating the very same
12 argument that "precluding" meant you can't pay
13 compensation; and, in that Treaty you can see that the
14 language is adopting or enforcing measures
15 necessary--sorry, "the Agreement shall not"--shall be
16 construed--"shall not be construed to prevent"; so,
17 instead of the word preclude--they use the word
18 "prevent," we would say very similar words, "a party
19 from adopting or enforcing a measure necessary in that
20 case to protect the environment," and that's the
21 conclusion that the Tribunal came to after considering
22 the Canadian Government's submission.
[Page 402]
1 Interestingly, what you did not hear from
2 the U.S. Government submission this morning is whether
3 or not this provision was subject to a good-faith
4 criteria, and the reason why you didn't hear anything
5 from the U.S. Government on this point is because
6 Colombia has already made a statement in their
7 Rejoinder on precisely this point. This seemed to be
8 an alternative argument yesterday, but it's not an
9 alternative argument in their Rejoinder.
10 In the Rejoinder, the Respondent said as
11 follows; you can see on the screen, Paragraph 43: "It
12 is the Respondent's submission that the Tribunal's
13 scope for review of Colombia's invocation of the
14 exception is strictly circumscribed to an examination
15 of whether the exception has been invoked in good
16 faith." So, they accept that there is still a
17 good-faith overlay. This is separate and apart from
18 the argument I've just made about allowing
19 compensation no matter what.
20 And what is that good-faith overlay? Well,
21 it's a two-part test, according to the Russia measures
22 concerning tariff--traffic in transit, WTO panel, what
[Page 403]
1 they said. It was a two-part test. The first relates
2 to the definition of the "essential security
3 interests," have they defined the essential security
4 interest in good faith; and the second relates to
5 whether the measures at issue meet a minimum
6 requirement of plausibility in relation to the
7 preferred--proffered essential security interest.
8 Now, you've already heard me on the first
9 point yesterday, so I won't belabor the point, but by
10 simply recasting a public purpose originally
11 articulated in their Counter-Memorial as now an
12 essential security interest, we believe, is not in
13 good faith.
14 But more importantly, and I think this is
15 clear--and you did not hear anything from the U.S.
16 Government on this this morning--is at what point in
17 time must the essential security interest be
18 identified? You did not hear anything about this
19 despite our submissions about this point yesterday
20 because it is crystal-clear from the text of the
21 provision that that essential security interest must
22 be defined at the time the Measure is taken. Of
[Page 404]
1 course that seems obvious. The language itself says
2 to preclude a party from applying measures it
3 considers necessary for the protection of its
4 essential security interest. If you are taking a
5 measure to protect your security interests, you must
6 articulate that essential security interest at the
7 time of taking the Measure. How do we know that
8 didn't happen here in this case?
9 One, they didn't say so in their
10 Counter-Memorial. If they would have taken this
11 measure to protect an essential security interest,
12 they would have known it in their Counter-Memorial.
13 That's, by the way, exactly the position in the
14 Nicaragua v. US case before the ICJ, where the Court
15 considered a very similar question, and they said the
16 chronological sequence of events was important; they
17 must have been at the time they were taking measures
18 necessary to protect its essential security interests.
19 And what is the position? They confirmed it
20 yesterday. Colombia said yesterday it was new facts
21 and circumstances that prompted the invocation of the
22 essential security interest. This is from their slide
[Page 405]
1 yesterday. They're saying it's new facts. It's not
2 back then what happened. It's new facts and
3 circumstances that prompted the invocation of the
4 essential security exception. So they're accepting
5 it's not something that happened back in 2016. It's
6 new facts and circumstances today that have given rise
7 to the invocation of the essential security interest,
8 so this confirms that the essential security interest
9 is a post hoc manufacture for this Arbitration, so
10 essentially a "Get Out of Jail Free" card.
11 The last point I want to make is a point
12 that relates to this, the good-faith exception as
13 well. You cannot articulate a good-faith invocation,
14 in our submission, which contradicts your own law and
15 your own position.
16 We agree with, I think, what the position
17 that the President of the Tribunal was taking
18 yesterday, which is: What is this essential security
19 interest? Where is it articulated? And it's
20 articulated in the law. It's reflected in the Asset
21 Forfeiture Law, and Colombia has articulated it as to
22 fight against organized crime, money-laundering and
[Page 406]
1 drug-trafficking, thus ultimately protecting its
2 population from the threats of paramilitary and
3 marginalized groups that have been ravaging the
4 country for years.
5 But its own law-its own law-accepts that
6 taking assets, taking property from good-faith third
7 parties without fault, that is not related. That--
8 there is no relationship between doing that and
9 protecting this interest. There is no plausible
10 connection if your own law says we must protect
11 good-faith third parties without fault. In order to
12 accomplish this--an essential security interest, we're
13 not going to take assets from good-faith third parties
14 without fault.
15 And over the next two slides, you see
16 several provisions--Article 3, Article 7, Article 22,
17 Article 87, Article 117, Article 152--all confirming
18 this position. Yes, this is an important essential
19 security interest. We're not saying it's not. What
20 we're saying--or I should make it clear. We're not
21 saying that this is not an important public purpose.
22 We don't think it's a properly articulated essential
[Page 407]
1 security interest. But what we are saying is that
2 taking things from good-faith third parties without
3 fault does--is not at all related, there is no
4 relationship between that--no plausible relationship
5 between that and accomplishing that essential security
6 interest as reflected in Colombia's own Asset
7 Forfeiture Law.
8 Those are my brief submissions on the
9 expropriation and the other points that were raised by
10 the United States. I think our submissions speak for
11 themselves, so I won't belabor any of those points,
12 subject to any questions, those are our submissions.
13 PRESIDENT SACHS: Not at this point of time,
14 Mr. Moloo, thank you.
15 We will now hear Mrs. Banifatemi.
16 MS. BANIFATEMI: Thank you, Mr. President.
17 Unlike Mr. Moloo, I had not anticipated what
18 the USA would say, so I do not have any slides to
19 provide, and I will react both to the U.S.
20 Government's submissions and to what we just heard.
21 And Mr. Moloo is not addressing some
22 important submissions by the U.S. that I will also
[Page 408]
1 address. But generally speaking--and this is not a
2 surprise that the U.S. is on the same line, is saying
3 exactly the same thing as to how you should read and
4 interpret this provision, and it's not surprising
5 because, as I argued yesterday, we do have the
6 travaux, which will be provided to the Tribunal, in
7 due course. The only reason why we did not provide it
8 is that the Tribunal asked for an index which will
9 take time, so we will provide that, but you will have
10 that on the record.
11 So it's already there. You already know the
12 intention of the Parties, and this is at least on this
13 self-judging aspect, it's certainly not a surprise.
14 Now, I want to take in sequence what the
15 U.S. Government's position is. I don't have much to
16 say as to the entitlement of the U.S., of course, to
17 make a submission as a Non-Disputing Party. What is
18 important, however, is that it is in the context of an
19 authentic interpretation. This is, I think, what I
20 started yesterday when we were discussing the common
21 understanding of the States. As you know--and I want
22 to refer to two provisions.
[Page 409]
1 I want to refer first to the Vienna
2 Convention itself, Article 31(3)(a), which the U.S.
3 Government has referred to. I quote: On general rule
4 of interpretation that "There shall be taken into
5 account"--that's an obligation--"There shall be taken
6 into account, together with the context: (a) any
7 subsequent agreement between the parties regarding the
8 interpretation of the treaty or the application of its
9 provisions."
10 Now, the Vienna Convention does not provide
11 for any requirement of form. It just says "subsequent
12 agreement" and "subsequent practice." So, "subsequent
13 agreement," you have a bit more clarification in what
14 we are submitting or if it has not done in this
15 morning, you will have it today, it is Exhibit RL-249.
16 It is one of the new legal exhibits. It's the draft
17 conclusions on subsequent agreements and subsequent
18 practice in relation to the interpretation of treaties
19 of 2018. That is the draft conclusions of the
20 International Law Commission at the UN. Their
21 conclusions have been adopted by the General Assembly
22 as part of the Commission's report covering the work
[Page 410]
1 of its sessions in 2018.
2 And you look--if you look at the
3 conclusions, you will see there is Conclusion 3, for
4 example, so it's really focused on subsequent
5 agreements and subsequent practice. Conclusion 3
6 says, I quote: "Subsequent agreements and subsequent
7 practice under Article 31(3)(a) and (b), being
8 objective evidence of the understanding of the parties
9 as to the meaning of the Treaty are authentic means of
10 interpretation in the application of the 'General rule
11 of interpretation' reflected in Article 31." So,
12 that's a confirmation that it's an authentic
13 interpretation. Subsequent agreement, it's simply, as
14 the U.S. Government has explained, there is a
15 commonality. The two States are telling you this is
16 our understanding, and both are saying the same thing,
17 and both have the same understanding as to how you
18 should read the essential security exception.
19 You also should look at Conclusion 6(2)
20 where, precisely, the ILC concluded, subsequent
21 agreements and subsequent practice under Article 31(3)
22 may take a variety of forms. So it can be
[Page 411]
1 disassociated. It's not necessary, as Mr. Moloo is
2 saying, that you should have only authentic
3 interpretation as part of the FTC, and that's the only
4 way that this can happen. No, you can have authentic
5 interpretation under international law. It suffices
6 that the two States are providing the same
7 interpretation, and that commonality makes it an
8 authentic interpretation of the Treaty.
9 We also have provided in our new Legal
10 Authorities R-L 244. That's a commentary of the 1969
11 Vienna Convention on the Law of Treaties by
12 Mr. Villiger, and I'm quoting--I don't have the page
13 number, I'm happy to provide that later. The
14 Parties--quoting--"The parties authentic
15 interpretation of the Treaty terms is not only
16 particularly reliable, it is also endowed with binding
17 force. It provides ex hypothesi the 'correct'
18 interpretation among the parties in that it determines
19 which of the various ordinary meanings shall apply."
20 And finally, I would like to refer to
21 Methanex, that's RL-235, where the Tribunal in a final
22 award of 2005 said, I quote: "It follows from the
[Page 412]
1 wording of Article 31(3)(a) that it is not envisaged
2 that the subsequent agreement need be concluded with
3 the same formal requirement as a treaty; and indeed,
4 were this to be the case, the provision would be
5 otiose."
6 So, this is first to say that there is no
7 formality required. "Authentic interpretation" means
8 simply that there is subsequent agreement between the
9 two States as to what the agreement means.
10 The U.S. Government specifically referred,
11 and Mr. Moloo wants to ignore it, to Article 10.22(3)
12 of the TPA, where the U.S. Government took the
13 position that a binding authentic authority under this
14 provision, it does not mean that the Government cannot
15 otherwise have an authentic interpretation if they
16 have a common understanding and they express a common
17 understanding of the Treaty, which is the case here,
18 and you have our submission on the meaning of the
19 Treaty, and now you have the U.S. submission on the
20 meaning of the Treaty. You will also have the travaux
21 préparatoires, of course.
22 So, one does not exclude the other and, by
[Page 413]
1 the way, incidentally, that provision is in the
2 provision called "governing law," so it is something
3 that's--does not mean that other types of authentic
4 interpretation are not possible.
5 I want to go now to, just very briefly
6 because we argued it yesterday, to what actually the
7 essential security exception means, and simply this is
8 exactly the point where there is an identical--I
9 should not even say "common"--there's an identical
10 understanding by the U.S. and by Colombia as to how
11 this provision should be read, and again, you will
12 have also the travaux préparatoires, which will
13 confirm that and will confirm the self-judging nature
14 of the provision. That you will see in the travaux.
15 I want to address briefly a few points that
16 Mr. Moloo made on the timing of the Measure, which
17 supposedly the U.S. Government did not address, and I
18 think there's a reason for that, but the U.S.
19 Government actually did address it. You have to
20 understand what the submission we heard earlier means.
21 First of all, I want to make a sort of
22 parentheses on the time and to remind the Tribunal
[Page 414]
1 what our position is:
2 First of all, it's reducing our position to
3 the law. We're not saying that the measures are the
4 law. We're saying that the measures are the Law on
5 Asset Forfeiture, the measures that the Government,
6 that Colombia has taken in relation to the Meritage,
7 so the ongoing asset forfeiture proceedings, the
8 ongoing criminal investigations, I argued that
9 yesterday. So, the measures are all of those, and you
10 remember there's a broad meaning of "measures" in the
11 TPA. So all of those are measures.
12 There is no time limit. I argued that
13 yesterday. The TPA, Article 22.2, does not impose any
14 time limit. There is no waiver. So States have the
15 ability to raise the exception whenever they deem they
16 consider that their national interest, their essential
17 security interest, is at stake, but that's a
18 determination for the States to do, both Colombia and
19 the U.S., in their common understanding of this
20 provision.
21 So--and I also remind you, Mr. Moloo kindly
22 referred us to Colombian law. If anything, this shows
[Page 415]
1 one thing is that Colombia is governed by the rule of
2 law. Colombian courts are governed by the rule of
3 law. There are processes. There are guarantees. And
4 there also are the guarantees of the Constitution.
5 And the constitution itself--and that's also
6 part of the regulatory framework that we're talking
7 about here. Article 34 of the Constitution, which I
8 relied on yesterday, does make a distinction between
9 asset forfeiture and confiscation. It's not the same
10 thing. Why? And that now is something that the U.S.
11 argued, and I will come back to that very briefly,
12 because it's not a Final Decision, it's not a final
13 court decision. You are sitting in a case where it
14 simply is not right, nothing is right. No final
15 decision has been made in that regard.
16 Now, coming back to the timing and the good
17 faith. Mr. Moloo said it's an issue. The U.S.
18 Government is not saying if it has to be determined in
19 good faith or not. Remember, when we argued the good
20 faith, that's in the alternative. Should the Tribunal
21 not find that this is self-judging, which it should,
22 now you are faced with an authentic interpretation by
[Page 416]
1 the two State Parties to the TPA would say this is
2 self-judging. And the U.S. Government has given meat
3 to that, what this means, and again the travaux will
4 give some more meat to that as well.
5 The U.S. Government is saying
6 'non-justiciable'. We actually refer to that concept
7 in our written pleadings. Justiciability is, we said
8 yesterday, I argued jurisdiction. Jurisdiction is the
9 technical word to say that you do not have
10 jurisdiction to determine and to--actually looking at
11 the criteria and determining whether or not you have
12 jurisdiction.
13 Justiciability is above that.
14 Justiciability is as just like arbitrability but in an
15 international law world. It means that you do not
16 have the power. It's a question of power. It's not
17 even a question of jurisdiction. You do not have the
18 power because if the States say this is outside the
19 scope of what you can do, this is non-justiciable and
20 therefore it cannot be adjudicated at all.
21 So this is the concept that we heard. This
22 is certainly the way that Colombia understands it as
[Page 417]
1 well. Now we can translate it into also jurisdiction,
2 but the simple matter is that it is self-judging,
3 therefore, you cannot adjudicate that.
4 And the consequences that, and we agree,
5 with respect, but this is also what I argued
6 yesterday, that once the exception is raised, the
7 Tribunal cannot find the measures to be in breach and
8 cannot, as a consequence, grant compensation because
9 compensation is the only consequence of a finding of
10 breach and responsibility under international law.
11 And the U.S. Government specifically said
12 this morning--and you heard it that the interpretation
13 provided by the Claimants is wrong. So, the U.S.
14 Government, I think, knows what the U.S. Government
15 meant when the U.S. Government entered into this
16 Treaty with Colombia, and so did Colombia.
17 Now, on the indirect expropriation, I just
18 refer the Tribunal to our submissions. Here, again,
19 there is a common understanding that there is no final
20 determination subject to challenge. If there is no
21 final determination and the measures are subject to
22 challenge, simply there cannot be an expropriation.
[Page 418]
1 And also the "no requirement of proportionality," I
2 refer the Tribunal back to our submissions.
3 And also, my final point is my pre-final
4 point is that--and this is what I argued all along
5 yesterday and the U.S. Government here today referred
6 to Article 10.16, I believe, you are here present with
7 non-final judicial acts. It is not final. The
8 Colombian courts are working. The Colombian court are
9 looking at these issues, which Colombia has determined
10 to be its essential security.
11 Now leaving aside essential security, simply
12 this is not ripe. You cannot make any determination
13 because it's all before the Colombian courts, and they
14 will determine in the future whether or not there has
15 been a--the Newport, which is now an affected party,
16 is a bona fide, without fault third party.
17 One final word because I forgot it earlier,
18 Mr. Moloo referred to Eco Oro, still on essential
19 security, and here I'm looking at his slide, and he
20 says it's a similar--if you look at--I don't think I
21 have a number for the slide--if you look at the slide
22 on Eco Oro with the Canada-Colombia FTA, with respect,
[Page 419]
1 this is not a similar provision at all. Mr. Moloo
2 said it's a similar provision, very similar. It's not
3 similar. You just look at it. It says, on top of the
4 page, it says Canada-Colombia FTA Article 2201(3), for
5 the purpose of Chapter 8, "Investment." So, it's an
6 actual provision for the purpose of the investment
7 chapter.
8 And then you have a number of requirements,
9 which is the measures are not arbitrary or
10 unjustifiable. They're not disguised restriction on
11 international trade, and then you have the list that
12 you have also in the GATT Article XXI, which I argued
13 yesterday.
14 So, this is anything but a similar provision
15 to what you have in front of you in the TPA because
16 that is a provision that is at the end of the Treaty,
17 and you remember the context. That says nothing in
18 this Agreement, so it captures the entirety of the
19 Treaty, and again the travaux préparatoires you will
20 see say this is the whole Treaty that is trumped, and
21 it's enough for the States to raise and to invoke--and
22 that invocation is not just a chapeau--to invoke the
[Page 420]
1 exception for the Tribunal to not be in a position to
2 find that the measures are in breach.
3 So, whatever the Eco Oro Tribunal found was
4 based on very different provisions, so the analogy
5 again does not work at all.
6 I had said that yesterday, Mr. Moloo goes
7 back to it, I'm not sure why, but you just have to
8 look at the actual text and what the actual text says
9 and how it's interpreted by the Eco Oro Tribunal.
10 I think I'm exhausting my time, so I will
11 stop here. Thank you very much.
12 PRESIDENT SACHS: Thank you very much.
13 Questions?
14 (Tribunal conferring.)
15 PRESIDENT SACHS: Okay.
16 Mr. Seda, witness, would you kindly take a
17 seat.
18 (Brief recess.)
19 ANGEL SAMUEL SEDA, CLAIMANTS' WITNESS, CALLED
20 PRESIDENT SACHS: So, good morning, once
21 again, Mr. Seda. In front of you is a declaration
22 that we would ask you to read for the record aloud.
[Page 421]
1 THE WITNESS: Good morning.
2 I, Angel Seda, solemnly declare upon my
3 honor and conscience that I shall speak the truth, the
4 whole truth and nothing but the truth.
5 PRESIDENT SACHS: Thank you, Mr. Seda.
6 You submitted in these proceedings three
7 Witness Statements, the first one dated 15 June 2020,
8 the second 7 September '21, and more recently a third
9 one on April 25. Is there anything in any of these
10 three Witness Statements that you would wish to
11 correct at this point in time?
12 THE WITNESS: No.
13 PRESIDENT SACHS: Thank you.
14 Then there will be direct, limited as we
15 agreed, to the contents of the three Witness
16 Statements.
17 MR. MOLOO: We'll keep it very brief,
18 Mr. President.
DIRECT EXAMINATION
BY MR. MOLOO:
21 Q. I just want to confirm, Mr. Seda, that you
22 have your three Witness Statements in front of you and
[Page 422]
1 also a binder of exhibits that was provided.
2 A. I have my three Witness Statements. I do
3 not see a binder of exhibits.
4 Q. Okay. Unless you have no corrections, as
5 you confirmed for the President, so there is nothing
6 further from us.
7 MS. BANIFATEMI: Thank you very much. May
8 I, Mr. President?
9 PRESIDENT SACHS: Yes, you may now proceed
10 to cross-examination.
CROSS-EXAMINATION
BY MS. BANIFATEMI:
13 Q. Good morning, Mr. Seda.
14 A. Good morning.
15 Q. Nice to meet you. I've seen your name a
16 lot.
17 A. I'm sorry?
18 Q. I've seen your name a lot. It's good to
19 meet you in person.
20 A. Likewise.
21 Q. Thank you.
22 So I'm Yas Banifatemi. As you know, I will
[Page 423]
1 ask you questions on behalf of Colombia, today. We
2 are going to actually give you the binder of exhibits.
3 So, there is one binder that we have today,
4 and can you please provide this to the Witness?
5 And, Mr. President, we also have prepared
6 one version for you, I think that you prefer to have
7 the paper version.
8 So, I will take you through this binder. I
9 will give you the tab numbers, of course, and you
10 should feel free to look at the documents, and
11 probably you are familiar with them, but take your
12 time.
13 And just for the record, we also have, of
14 course, the electronic bundle that we will be using on
15 the screen, and the Witness and the Chairman will be
16 following, I guess, on paper. We will be--the rest of
17 us will follow on the screen.
18 So, Mr. Seda, the binder actually also
19 includes your Witness Statements, but please feel free
20 to use those that are in front of you, so I will start
21 with your First Statement, Paragraph 10.
22 So, this is in relation to arrival in
[Page 424]
1 Medellín, in July 2007. This is the start of your
2 adventure in Colombia, right?
3 A. Correct.
4 Q. Can you confirm to me that you speak
5 Spanish?
6 A. Yes, I speak Spanish.
7 Q. Fluently?
8 A. I mean, that's opinion, but yeah, sure, I
9 think I do.
10 Q. Okay. So, if we look at what you say at
11 Paragraph 10--I'm just reading for the record--"In
12 July 2007, I arrived in Medellín. I soon recognized
13 that it was ideal for the type of project I was
14 considering. The civil war that had ravaged Colombia
15 finally appeared to be coming to an end and the
16 newfound peace was generating new economic
17 opportunities." And then you refer to then-President
18 Uribe.
19 So, there had been a civil war ravaging
20 Colombia, right?
21 A. Yeah. I don't think that's in denial. I
22 understood that from popular cinema and movies and TV
[Page 425]
1 shows, yes.
2 Q. Right. And it was ongoing, the civil war
3 back then?
4 A. I--can I add context to my answer?
5 Q. Of course. But please answer my question
6 first, and then you can provide context.
7 A. Okay.
8 I do not believe it was ongoing. If I had
9 believed it was still the same it was before, I
10 wouldn't have gone to Colombia. I thought that
11 Colombia was at a different point and stage in its
12 history.
13 Part of the reason why I decided to go to
14 Colombia was reading an interesting article called
15 "Extreme investing in Colombia," and they talked about
16 the dramatic changes, 95 percent decrease in
17 assassinations and over 96 percent decrease in
18 kidnappings, so I thought that the country was a
19 different country.
20 Q. Back then in 2007 when you arrived in
21 Medellín?
22 A. Correct.
[Page 426]
1 Q. But the civil war was ongoing, wasn't it?
2 A. That there was still violence in the
3 country, yes, but it was, in my opinion, a mere
4 after-thought of what it was before. I believe the
5 death toll per 100,000 was over 387, and it had
6 dropped to, I believe, 24 per 100,000. When I
7 arrived, that was extremely positive. I saw it as a
8 different--a new country, a rebirth country. I was
9 very excited about that.
10 Q. Yeah, I understand that. You're still not
11 answering my question. The civil war was ongoing,
12 wasn't it?
13 A. I'm giving my opinion. In my opinion it was
14 not.
15 Q. It's not an opinion. Do you know if the
16 civil war was ongoing? "Yes" or "no." If you don't
17 know, you don't know.
18 A. I don't know. I'm not a professional enough
19 to be able to opine on that.
20 Q. And do you remember you were in Colombia
21 then in 2016. That was when the Peace Agreement was
22 signed between the Government and the FARC, right?
[Page 427]
1 A. I don't know the exact year, but I would say
2 "yes," a few years ago.
3 Q. Yeah.
4 So, looking at some of--you refer--or you
5 rely a lot on press. So this is (1)(c), Tab 9 of your
6 binder. That is Exhibit C-09bis. It's an article
7 from The Telegraph?
8 A. I'm sorry, what was that?
9 Q. Tab 9.
10 A. Oh, on Tab 9.
11 Q. Look at Tab 9.
12 A. Yeah.
13 Q. So I'm just giving it for the record. It's
14 Exhibit C--it's your exhibit--Exhibit C-09.
15 And this refers--just looking at the first
16 two paragraphs--it refers to 25 years ago, Time
17 Magazine dubbed Colombia's Medellín the most dangerous
18 city on Earth, and then the next paragraph, it
19 says--and this is dated 2008, by the way. It's--the
20 date of this Article is 4 January 2018. So even 10
21 years ago, that means 2008, "Medellín was a 'bad-ass'
22 town. Violence reigned, civil society had been
[Page 428]
1 destroyed and no one seemed to know how to put
2 Medellín back together again." This is one year after
3 you arrived in Medellín for your investment, correct?
4 A. I'm sorry, let me read the article. I want
5 to understand it completely. Is that okay?
6 Q. It's okay, but if you're going to read the
7 entire article every time--
8 A. No just--
9 Q. --these are long documents but--and I'm sure
10 you're familiar with them. So--
11 A. Just to get a little context--
12 Q. --please take your time.
13 (Overlapping speakers.)
14 A. --to after.
15 Q. Of course.
16 A. Thank you.
17 (Witness reviews document.)
18 A. And I'm sorry, I don't see the date on this
19 article? What was it?
20 Q. I do not see it on the article itself, but
21 it is dated 4 January. It's your own exhibit, so it
22 was provided to us with that date, 4 January 2018.
[Page 429]
1 A. I just want to make sure. I'm not trying to
2 obstruct, but I just want to make sure that the date
3 that you're referring to isn't the date we submitted
4 but rather the date the article was published. That's
5 it.
6 Q. It is the date of the article.
7 This is your exhibit. Your exhibit as
8 provided was provided with the date of 4 January 2018
9 for this article.
10 A. Okay.
11 I--I arrived in Colombia in 2007, and I
12 would not characterize the city the way they're
13 characterizing it here.
14 Again, 24 murders per 100,000 in what used
15 to be the murder capital of the world. I've compared
16 those numbers to numbers of U.S. cities. It's not a
17 characterization of violence reigned and civil society
18 had been destroyed. I--that is not what I experienced
19 on a personal basis living in Colombia and raising
20 children in Colombia. That's not what Medellín was.
21 Q. We're talking about 2008, so that was one
22 year after you arrived. We're not talking about
[Page 430]
1 today. We're talking about back then.
2 A. Um-hmm.
3 Q. And this article says even 10 years ago, in
4 2018, so you just don't agree that violence continued
5 to reign and civil society had been destroyed?
6 A. Well, I believe the numbers--statistics in
7 Colombia speak differently. In 2008, violence was
8 very low. In 2008, kidnapping was nothing of what it
9 was in the '90s, so--
10 Q. It was no longer Pablo Escobar, but it was
11 still Medellín, with a lot of violence and civil war,
12 still, correct?
13 A. Yeah. I'm simply giving you the numbers,
14 the data. The data doesn't support what--what I think
15 you're trying--
16 (Overlapping speakers.)
17 Q. I don't have the data. I don't know what
18 data you're talking about. I'm asking about whether
19 you know that this was still--and this is your own
20 exhibit--violence reigning and civil society
21 destroyed. If you do not agree, I'll move on.
22 A. I don't agree.
[Page 431]
1 Q. Okay. You do not agree with your own
2 exhibit.
3 So, then let's look at Tab 10, and this is
4 also your exhibit.
5 The article, itself, is dated 9 May 2013, as
6 you can see on it. You see that? So that talks about
7 luxury living in a bucolic shoreline setting in
8 Colombia. If you look at the third page of the
9 document, you see Page 3 of 4, you see in the middle
10 there's a paragraph that my colleague will now
11 highlight: Mr. Seda conceded that many of his regular
12 investors based in the U.S. were spooked by the idea
13 of putting money into Colombian real estate,
14 particularly those who remembered the 1980s and early
15 '90s when Medellín, in particular was dominated by
16 violent gang--drug gangs.
17 So, this is, of course, the background
18 against which you are investing in Colombia and
19 proposing investments to partners, right?
20 A. Well, I believe what it expresses is the
21 previous history, and I believe that my investors'
22 concern was is the present--or is the past history,
[Page 432]
1 does that show at all what the present is, and my
2 ability to gain their confidence and give them a
3 surety that that was not the case was to invite them
4 to Colombia, and all of my investors took their time
5 and came to Colombia and were able to see that that
6 wasn't the case, that it was a very different city
7 than what the past was.
8 Q. So, you're saying after you arrived in
9 Colombia in 2008 it was paradise?
10 A. For me, it pretty much was, yes.
11 Q. For you personally. But was it paradise for
12 the people living in Medellín and being killed by the
13 drug gangs?
14 A. I think it's paradise for the Colombian
15 people. I believe they love the place they live in.
16 It is a very desirable place to live and raise a
17 family. It's a great place.
18 Q. I'm talking about Medellín.
19 A. I live in Medellín.
20 Q. Yeah.
21 A. I'm talking about in Medellín as well.
22 Q. Yeah. And at the time, there was no
[Page 433]
1 violence, no issue of drug-trafficking, no cartel
2 issues, nothing.
3 A. Well, I believe there's violence in all
4 cities around the world, and I was comparing
5 Medellín's security state and Medellín's general
6 situation to other metropolitan cities. I believe
7 there's violence. I believe there's drug-trafficking.
8 I believe there's--this happens in every single city.
9 I don't think Washington, D.C., or New York or Miami
10 or Los Angeles are immune to any of the things that
11 you're talking about.
12 But there was huge opportunity.
[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]
[Redacted]
19 A. Yeah. So, I believe that there is, again,
20 violence in communities around the world. I believe
21 that there's violence between those factions that
22 you're talking about. I'm not an expert. I can't
[Page 434]
1 begin to opine on the inner workings of Oficina de
2 Envigado. I'm not that well-versed on it.
3 I just know that, in general, the general
4 perspective, Medellín is a great city. Medellín
5 compares to a lot of U.S. cities when it comes to
6 violence. Again, U.S. cities, European cities, Asian
7 cities, cities in Asia, they all suffer from similar
8 issues.
9 Q. And we agree that the U.S. investors were
10 concerned, to say the least, with the perception of
11 violence that they faced, if that's a perception, as
12 you said.
13 A. I believe anyone who had not visited
14 Colombia would not be smart to be concerned; and,
15 until you put boots on the ground--and I do that with
16 every investor that we have--I think it's
17 irresponsible to accept investment from investors who
18 haven't put their eyes on exactly what it is that
19 you're talking about, what's the concept, what's the
20 vision, you know, what's the plan; and so, I invite
21 all my investors to do that, and upon them arriving to
22 Colombia, arriving to Medellín, as discussed with
[Page 435]
1 them, they saw exactly what I saw.
2 Q. Okay. Let's see what you did there.
3 So I'm now looking at your Paragraph 15, and
4 you described your first project; that is The Charlee,
5 right?
6 A. Which--which statement are we?
7 Q. Your first--still First Statement.
8 A. Okay.
9 Q. Paragraph 15.
10 You referred to the first projects to build
11 a high-end luxury hotel with lifestyle elements in the
12 Lleras Park neighborhood, right? That is in Medellín,
13 right?
14 A. That is correct.
15 Q. And if we look at Tab 10--this is Exhibit
16 C-010bis again.
17 So--and this now--and on the previous page,
18 Page 2, on the top of the page, and it says: The
19 Guatapé Region was one of the country's many rural
20 areas being fought over by leftist guerrillas and
21 rightist paramilitaries during the 90s, but security
22 improved dramatically after President Alvaro Uribe
[Page 436]
1 himself, a native of Medellín, took office. Right?
2 So, this is referring to the fight between
3 leftist guerrillas and the paramilitaries--right?--in
4 the 90s. Yeah?
5 A. Yeah, the general situation, correct.
6 Q. And Guatapé is where your other project Luxé
7 is; right?
8 A. Yes, that's correct.
9 Q. If we can look at Exhibit C-64bis. Let me
10 give you the tab number. That's Tab 11.
11 Do you recognize this document, Mr. Seda?
12 A. Yes, I do.
13 Q. What is it?
14 A. It is an investment deck for our Prado
15 Tolima, a land fund project.
16 Q. And do you remember the date of this
17 document?
18 A. No. The exact date I don't remember.
19 Q. I'm asking because we don't have a date.
20 A. We could get like the exact first creation
21 date?
22 Q. So, it's an evolving document? Is that what
[Page 437]
1 you're saying?
2 A. All of our investment decks, for the most
3 part, are evolving documents.
4 Q. So this version, do you know when it was
5 prepared?
6 A. I don't know. This is the fir--I mean, I'm
7 looking at it right now.
8 Q. Let's look at Page 18. You have the Pages
9 SP on the bottom of the page, SP-0018. So, you read
10 Spanish, so I will leave it to you to read the Spanish
11 for the record. I will read the translation: When
12 the plot of land of Luxé was bought in 2009, the
13 region was "seen as unstable and dangerous" before
14 buyers' confidence--therefore, buyers' confidence was
15 extremely low.
16 Do you see that? (in Spanish). Do you see
17 that?
18 A. Yes.
19 Q. 2009.
20 A. Yes.
21 Ω. These are your own words.
22 A. I would like to give context.
[Page 438]
1 Q. These are your own words that, in 2009, the
2 region was dangerous, correct?
3 A. No. You're taking--
4 Q. No?
5 A. --what my statement and miscontextualizing
6 it.
7 Q. It doesn't say what it says?
8 A. If you'd like--if you'd like me to add
9 context, I can explain exactly--
10 Q. I see from now that the entire day you're
11 going to give a lot context. Please do, but time is
12 it scarce, as you know, so...
13 A. Okay. Understood. I appreciate it. Thank
14 you.
15 So, the Guatapé Region suffered violence,
16 had issues. I believe it was just two years prior to
17 this in 2007 or 2006. The Colombian Government made a
18 huge decision, which was monumental for this region,
19 and they added sub-military base, a special forces
20 sub-military base just about 3 kilometers away from
21 where our--where our asset is.
22 Because of the violence that had happened
[Page 439]
1 previously, you couldn't visit this area without being
2 stopped. They put periodic checkpoints, the guerrilla
3 forces, and so people simply stopped going to this
4 region. They just stopped altogether.
5 And when I arrived in 2007, the military
6 base, the sub-military base had just been installed
7 maybe a year before, if my memory serves me correctly.
8 And I visited the area, I talked to local Colombians,
9 and they all expressed concern about the general
10 region. After further discussing this with them, I
11 realized that none of them had visited this region
12 for, in many cases 10, 15, 20 years. So, even local
13 Colombians, even local people from Medellín really
14 didn't understand the changes that had been made in
15 this beautiful area.
16 So, when I'm making this statement, as you
17 see the word "vista," "era vista," I'm not saying it
18 was. I'm saying that it was seen. So, when you're
19 saying these are my words that I'm saying, this--I
20 just wanted to help you understand that I'm saying
21 this is the way Colombian people view it, not the way
22 that we viewed it. If we had viewed that way, we
[Page 440]
1 wouldn't have bought the asset.
2 Q. The Colombians are not paranoid, right? If
3 they see a region--here we're talking about
4 Guatapé--as unstable and dangerous, very probably it's
5 because there's reason that is dangerous, right?
6 A. Very probable that it was dangerous at a
7 period in time and that they have written that area
8 off.
9 It was also--used to be a four hour to
10 five-hour drive. Infrastructure changes and
11 improvements changed that to an hour-and-a-half.
12 So, what was in the Colombian consumers'
13 mind was this place that is ultra-far, is what I--and
14 I'm saying this as if I was a Colombian--what I as a
15 Colombian remember is five hours to arrive there, it
16 was dangerous, there were continuous roadblocks by
17 paramilitary and guerrilla forces, and I haven't been
18 there for 15 or 20 years. Those were the
19 testimony--that's what the testimony that I received
20 from people when I went out to the community and asked
21 their opinion on--on this region, so that's what I'm
22 trying to say, their viewpoint.
[Page 441]
1 Q. I'm not sure when you say you haven't been
2 there for 15-20 years. The first time you entered
3 Columbia is 2007, and this refers to a 2009
4 determination, that in 2009 the region was seen as
5 unstable and dangerous.
6 A. I just said that I was expressing this, as
7 if I was a Colombian. These were the responses that I
8 was receiving because, whenever we do a project, we go
9 out, and we do--we knock on the doors, and what I mean
10 by that is we invite our friends and family and say we
11 don't blindly do a project. I actually wanted to do
12 this project at the very beginning when I arrived to
13 Colombia in 2007, and it was the first project I
14 wanted to do. And at that period of time, we got a
15 lot of negative feedback from local people from
16 Medellín. When we talked to them, we would ask them,
17 how do you feel about Guatapé, even my own partner
18 was, like, I don't want to--I don't want to do a
19 project there. People are not going to want to be
20 there. And when we asked, we did a roundtable. We
21 asked 20 Colombians, and they all said I would not buy
22 real estate there. That was their view. Their view
[Page 442]
1 was the historic view in the past. And, it wasn't the
2 reality of what was happening at the present.
3 Q. But again, in 2009, there was no civil war,
4 there was no drug-trafficking, there was no danger.
5 That's your testimony?
6 A. My testimony is that a young American who
7 was 32 years old could go there without armed guards,
8 not be stopped by Paramilitary Forces, not be stopped
9 by guerrilla, go to restaurants in the region, have
10 fun, buy a piece of property, and never experience any
11 issues. That to me is safety.
12 Q. Yeah, you got lucky.
13 Let's look at how you did this now.
14 Still the same document, Page 9.
15 So, I'm looking at the second paragraph, and
16 I will read for the record an English translation, so
17 RPG is Royal Property Group--right?--your group.
18 A. Royal Property Group is my company, correct.
19 Q. So, the RPG has been historically successful
20 in the process of identifying land plots in previously
21 dangerous regions that had stabilized afterwards and
22 are now well valued by the markets. That perception
[Page 443]
1 of danger cause prices to be fixed at a bargain,
2 opening the doors to bargaining and negotiation that
3 seeks to reduce the prices as much as possible.
4 Afterwards, these prices increased rapidly once public
5 perception of the region increases generating dynamics
6 of purchases and development, right? This is what you
7 started explaining, right? You go and finds these
8 nice regions, previously dangerous, and then you just
9 buy a piece of land, right?
10 A. Yeah, it's a strategy. It doesn't always
11 have to be danger. It could be other variables, but
12 variables in which a certain area is not attractive
13 for whatever those variables or reasons are. And this
14 is just general real estate cycle. There's--some
15 thing's unattractive, you see promise, you see that
16 there's something that can be made out of it, you are
17 a first arriver, you come in and you create attractive
18 developments and usually other people follow. It's
19 a--it was our strategy.
20 Q. And then, here you referred to previously
21 identifying land plots in previously dangerous regions
22 and the perception of danger causes prices to be fixed
[Page 444]
1 at the bargain. So, you got them at a bargain; right?
2 Inexpensive, correct?
3 A. From the perception of danger fixes the
4 prices at whatever the market's going to fix them at.
5 Q. You say "bargain" here.
6 A. We are looking at what's the potential value
7 could be. When you see a beautiful lake and you see
8 beautiful landscape, and you see improved security,
9 you're seeing that there is some sort of disparity.
10 That there is--that the pricing is not in reality with
11 what is actually happening.
12 And that happens in a lot of businesses.
13 There's a lag between when there's change and when
14 prices actually adjust.
15 Q. That's not the answer to my question, is it?
16 You are identifying regions that were perceived as
17 previously dangerous. That's what you say. That's
18 not what I said, that's what you say. Identify land
19 plots in previously dangerous region. The perception
20 of danger causes prices to be fixed at a bargain.
21 That's what you say, correct?
22 A. Yes.
[Page 445]
1 Q. You're a very good businessman, Mr. Seda,
2 aren't you?
3 A. I hope so.
4 Q. And those beautiful lands, indeed, Colombia
5 is a wonderful country, absolutely, but you took
6 advantage of the situation and got those lands at a
7 bargain, right?
8 A. "I took advantage." I thought I was being
9 part of something, of the rebuilding of a country. I
10 didn't think I was taking advantage of the country.
11 Q. Well, let's look at Page 16 of the same
12 document.
13 MR. MOLOO: Ms. Banifatemi, I don't want to
14 interrupt, but is it possible to see the English
15 version as well? Since we don't have hard copies it's
16 very hard to follow just the Spanish.
17 MS. BANIFATEMI: I don't believe there is an
18 English version, is there?
19 (Comment off microphone.)
20 MR. MOLOO: There's no English version?
21 Okay.
22 MS. BANIFATEMI: So- we- it's a courtesy
[Page 446]
1 translation I am giving on the record.
2 MR. MOLOO: Thank you.
3 MS. BANIFATEMI: I'm sorry, Dr. Poncet?
4 (Comments off microphone.)
5 THE INTERPRETER: No microphone.
6 MR. MOLOO: We just managed to find an
7 English version, so we're following along on that one,
8 there is an English version.
BY MS. BANIFATEMI:
10 Q. So, now looking at the first paragraph, but
11 you have it also on paper, if you prefer to--
12 (Overlapping speakers.)
13 A. I prefer reading it right there, if it
14 doesn't bother anyone.
15 Q. Okay. No, of course. It's--your counsel
16 asked to have a paper binder, so I thought that was
17 your preference.
18 Okay. So, I'll--again I will read slowly
19 for the record the English translation of this first
20 paragraph: "Taking into account that the Company
21 believes that it can acquire first-class lands costing
22 less than 54,000, which is Colombian pesos, per square
[Page 447]
1 meter in the Prado Region, Tolima. If one assumes an
2 average sales price of 40,000 in Colombian pesos, per
3 square meter, the return on the Investment has a
4 potential to reach more than 1000 percent during the
5 Investment phase."
6 So, this is what I call being a good
7 businessman, right? You buy piece of land in regions
8 that are either perceived as previously dangerous or
9 still dangerous and you expect to make a very high
10 profit out of it, right? And you talk about profits
11 of 1000 percent.
12 A. So, when we were doing this pitch-stack or
13 what's called an "investment résumé," we were
14 copy-pasting. And what I mean by "copy-pasting" is, I
15 felt a little upset that we hadn't done the same thing
16 in the region of Guatapé al Peñol. When we came to
17 the region of Guatapé al Peñol, it was similar to
18 Prado Tolima. It is a lake front destination, it is
19 just an hour-and-a-half outside of the City of
20 Medellín, which has a 4 million person population, and
21 the prices of land were somewhat similar. And now, we
22 had identified--I had identified a very similar
[Page 448]
1 situation, beautiful lake front destination, but now
2 with a population of influence of 10 million people,
3 and it's the City of Bogotá. With huge consumer
4 power, spending power, and there was this jewel that
5 no one had done anything with. And exactly how it
6 happened in Guatapé al Peñol, we purchased the land,
7 we started development on the Project, the Project
8 did--was--did very well. We sold very quickly, and I
9 wanted to kick myself because the land values went up
10 tremendously as a direct consequence of our singular
11 development.
12 Q. Um-hmm.
13 A. And so, I said I do not want to make that
14 mistake again. This time, I think it would be smart
15 to acquire land before doing an influential
16 development that will change the landscape and benefit
17 from that. I mean, my job is to give returns to my
18 investors, that's the way I can do what I love.
19 Q. But again, the business model is that you
20 buy for a pittance, gorgeous regions, piece of lands
21 in gorgeous regions at the very low price, there's the
22 perception of violence, at the very least, if not
[Page 449]
1 actual violence and then you expect a return on
2 investment of 1000 percent. This is what you say in
3 your brochure.
4 A. So, I just to want to clarify, we're not
5 taking advantage of anyone. People are--
6 Q. I'm not saying now. Now, my question was--
7 A. Please let me finish.
8 Q. Now, my question was this is your business
9 model.
10 A. Well, you're mischaracterizing my business
11 model. And so, I just would like to characterize it
12 in the actual light that it is, because what it sounds
13 like is you're saying that I'm taking advantage of
14 people, that I'm forcing people to buy. When we come
15 into a region, when we come into an area, we use real
16 estate brokers and we say we--"these are the
17 characteristics of the assets that we're looking for,
18 can you help us find properties?" And these are
19 willing sellers say, "we want to sell," and we're
20 paying Market Value. That is whatever the value is
21 and whatever properties are selling for in that
22 region, in that area, it's not--that something is
[Page 450]
1 selling for 100 and we're getting it for 10. If it's
2 selling for 4,000 pesos a meter, then that's the
3 general price in the region in the area.
4 Consequently, whatever happens to that price
5 after because we add value, well, those are the fruits
6 of the rewards of business.
7 Q. Okay.
8 MS. BANIFATEMI: Now, I--Mr. President, I
9 don't know if you want to have a break now or later
10 because there was--or do you consider the earlier
11 break to be the morning break?
12 PRESIDENT SACHS: Please continue. We will
13 have another shorter break later.
14 MS. BANIFATEMI: Okay. Thank you, Mr.--
15 PRESIDENT SACHS: If you don't mind.
16 MS. BANIFATEMI: Of course.
BY MS. BANIFATEMI:
18 Q. So, knowing so well the real estate market
19 in Antioquia and Tolima, these are Regions where you
20 have invested, right?
21 A. I'm sorry, say it again?
22 Q. Antioquia and Tolima, these are the Regions
[Page 451]
1 where you've invested, correct?
2 A. Those are some of the regions that we've
3 invested in--
4 (Overlapping speakers)
5 Q. "Some of the regions." So, you have
6 in-depth knowledge of the real estate there, right?
7 A. I don't invest anywhere that I haven't
8 walked, put boots on and walked the Lots we're
9 interested in, walked the entire areas, talked to the
10 mayors, talked to the local Councilmen, stayed in the
11 hotels however good or bad they may be, eaten the
12 food, talked to the neighbors. So, yeah, I have
13 pretty in-depth knowledge of anything that we buy,
14 yes.
15 Q. Do you call that "due diligence"?
16 A. I would call it due diligence, correct. I
17 would call it due diligence on the land in the sense
18 that what do I think--where do I think it's going to
19 go, what do I think is going to happen there, what
20 kind of tourism is happening, what's the
21 classification of the tourist, how much are they
22 spending, what do their friends say, why do people say
[Page 452]
1 they don't want to go there? Do they come and go for
2 the day or do they go back, stay the night at a hotel?
3 It's business due diligence with regards to my
4 business model, yeah.
5 Q. So, it's real estate due diligence; right?
6 So, you go to the bottom of things to make sure that
7 what you're buying is something that will give that
8 Return on Investment that you're hoping, right?
9 A. It's business due diligence.
10 Q. I'm sorry?
11 A. It's business due diligence.
12 Q. "Business due diligence," okay.
13 But you are certainly also acquainted with
14 the legal requirements and procedures that apply to
15 real estate, right?
16 A. Yes.
17 Q. And that's the requirements that applied to
18 buying land parcels, right? You're familiar with
19 that?
20 A. Yes.
21 Q. And in--if I take again your First Statement
22 at Paragraph 88.
[Page 453]
1 This is in another context. This is not the
2 context I'm discussing but in the context of
3 discussions with Mr. López Vanegas, you refer to
4 having conducted extensive due diligence on Page 88.
5 In the middle of the paragraph, you say here you
6 referred to a Newport had transacted in good faith,
7 and extensive due diligence had been done on the
8 property. This included four title studies and a
9 certification from the Fiscalía, all of which have
10 concluded--sorry, all of which had concluded that
11 title to the property was clean and free of
12 encumbrances, right? That is your position?
13 A. Yes, that's my position.
14 Q. So--and you refer here to title studies, and
15 one of the title studies is the one that was conducted
16 by the law firm that you commissioned--right?--the
17 Otero & Palacio?
18 A. That's correct.
19 Q. And that you refer to in Paragraphs 49 and
20 50 of your first statement.
21 Here you explain that you, starting at 49,
22 you discuss Corficolombiana and the fact that they
[Page 454]
1 were- you retained them as a fiduciary trust for the
2 Projects, and that in the middle, Corficolombiana
3 asked for a formal title search of the land from a
4 third party to ensure that that title was clear, as I
5 had commissioned similar studies before commencing The
6 Charlee Hotel and Luxé by the Charlee projects. I was
7 familiar with the process. On Corficolombiana's
8 recommendation, Newport engaged a well-known local
9 firm, Otero & Palacio to conduct the study, right?
10 That's what we're talking about. Yes?
11 A. I'm sorry, that's what I'm talking about in
12 reference to...?
13 Q. To the titles--one of the title searches
14 that gave you the confidence that everything was fine.
15 A. Correct.
16 Q. And the study that came from Otero &
17 Palacio, as you say, next paragraph, 50, on
18 7 March 2013, Otero & Palacio issued their study,
19 confirming clean title to the property. The title
20 study included checking OFAC and UN sanctions lists
21 for all natural and juridical persons that appear in
22 the certificates of the properties herein identified.
[Page 455]
The firm concluded that none of the prior owners of the land were on these lists and identified no other issues with the chain of title. The firm also concluded the corporate study of the seller, La Palma Argentina, finding no issues. The firm accordingly gave a favorable rating to the chain of title associated with the land, right? This is the conclusion; right?
A. I believe that's the conclusion from the title study itself, yeah.
2. Yeah. Now, if you can look at Tab 12 of your binder. This is Exhibit C-216, 216.
A. Correct.
Q. Are you familiar with this document, Mr. Seda?
A. Vaguely.
2. "Vaguely."
So, you have seen it?
A. I think--I think you put this on the screen earlier, was it today or yesterday? I don't know.
2. Have you seen it before this Hearing?
A. I have--I have seen so many documents, to be
[Page 456]
honest with you.
Q. I'm sure.
A. I'm sorry.
2. So, this is a testimony by your lawyer or then lawyer Ana María Palacio in the Pinturas Prime Arbitration. Can you tell us what that was, that arbitration?
A. Sure. The arbitration was a legal claim brought by several of the-I think- a Unit Buyer that had several units, who brought a claim against us because they simply said we did not perform under Contract. We had a certain delivery date to turn over the unit, and we obviously weren't able to turn over the finished unit.
2. So, in the context of that arbitration, there is an examination of Ms. Palacio, right? And if I can look first at the first page, which you have in front of you, the very first page it's called SP-0002, in fact. And I'm looking at the last third of the page.
"Question: What did the title study include? You have mentioned deeds. Does this mean
[Page 457]
you analyzed the chain of title and the property's prior owners? Would you please explain this issue in detail?"
And she responds: "Yes, here is the proposal that was sent to them at the time, I do not know if I may submit it. The proposal talks about doing a title study going back 10 years, a chain of title review going back 10 years for the titles that are included in the property's ownership history. I was also--it was also proposed to them that a review be done of lists that are publicly available for all the individuals appearing in the title history for that property. As I said, this verification is done using lists that are publicly available, for example in Google, in OFAC, perhaps the UN, which deals more with terrorism-related issues, but a search would also be done."
So I--I will stop here. If you wish to take a bit of time to familiarize yourself with the document, I'm happy to give you a few minutes, with the Tribunal's authorization, of course.
(Witness reviews document.)
[Page 458]
Q. Yes?
A. Yes.
2. So, here we see in this excerpt that I read from, Ms. Palacio confirms having looked into 10 years of chain of title. You see that, right?
A. Yes.
Q. Is that something you knew at the time?
A. I'm sorry?
2. Is that something that you knew at the time? She was your lawyer, so did you retain her and say, go back 10 years?
A. I didn't--I didn't--I wouldn't even know how to tell professional how to do a title search. They're the professional. We told them to do what's required, please do a title search for us.
2. So, she did a 10-year search, that's what you're saying, on her own.
A. Of course. We said, well, first off, to add context, we asked the fiduciary, which was fiduciary Corficolombiana, part of the largest financial conglomerate in the country, what was the preferred firm. We didn't know Otero & Palacio, we had never
[Page 459]
worked with Otero & Palacio before. I never met either Ms. Otero or Ms. Palacio. We simply went off the reference of this huge financial conglomerate and said who would be the best company to do this title research. Rather than going out and finding a random company, we want the Company that you're most comfortable with.
So, the financial entity recommended this firm which was very highly acclaimed firm. They were working for Banco de Colombia and were very well-regarded in the community. So, we said, "Great, let's use them."
2. I did not say that she was not well-regarded. I did not take an issue with the law firm. If you listened carefully to my questions and answer my questions, I think this will go faster. So, my question was that she, if you did not tell her do a 10-year, it was her own initiative to do 10 years. That was my question, so the answer is yes, I assume?
A. Yes, I hadn't spoken to her personally.
2. Somebody for you did in your company, is that what you're saying?
[Page 460]
A. Correct.
Q. So, let's look at page--bottom of Page SP-0007, and here you see again this paragraph where counsel, cross-examining counsel is asking:
"Counselor Ana María, you mentioned in your narrative that the title studies are for 10 years. Are you able, in your recommendations to the client, or in your comments regarding the title study, tell the client or recommend to the client that it be done for more years?"
And she answers, I quote: "Yes, it is simply a proposal. If the client say no, I want you to do the entire chain of recordation of titles, it can be done so it covers the entire chain."
So, that is her answer.
So, what this shows is that the title study can carry shorter or longer terms, depending what the client asks, right? That's what she says.
A. So, to be clear, on this title study and every title study we've ever performed, we have never, ever directed, suggested or made a reference to a law firm to perform a title study in one way or another.
[Page 461]
We have always, always, directed the law firm simply, please do whatever is necessary under the law and give us back a fulsome title search.
2. Hmm. But what she says here is that she did a 10-year search, and here in answer to the question, she says that, yes, I can go beyond if the client asks me. The question is: You didn't ask her; right?
A. To be completely honest with you, in this very moment, I have no--would have no thought process that I would have to ask the most well-regarded title research firm in the State of Antioquia and tell them how to do the work. My assumption is they know--they know what they're doing. I'm relying on their knowledge.
2. Well, you're familiar with client instructions, right? I mean, clients give instructions to the lawyers, your lawyers are given instruction--are given instruction by you, my clients are giving instructions to me. That's what happens all the time with lawyers?
A. I can attest to 100 percent fact, we gave zero instructions, zero recommendations to Otero &
[Page 462]
Palacio on what to do and what not to do with regard to this title search. Our assumption was, our reliance was, they would do everything that was required under the law to guarantee that we were qualified good-faith buyers.
2. And once you get that title study in hand, you don't question if you think it's all good, you don't say maybe I want to look more, you don't have an interaction with them and say are you sure this is done properly, we're talking about a region that's dangerous with the cartel and so on? You don't ask them?
A. Of course we do. The same is when people get a second medical opinion. This was one singular piece of our diligence. This gave me comfort, yes. But what really gave me comfort was the combination of this title search, which as we're referencing, went back 10 years, using Corficolombiana, which is a nationally recognized a trust fiduciary by the largest financial conglomerate in the country, them going back 60-some-odd years, writing the Attorney General's Office, getting a certificate that we relied on and
[Page 463]
felt very proud about when we received it, understanding that Corficolombiana is a financially regulated entity that has obviously approved SARLAFT and diligence process. I don't know what it is, I wouldn't even pretend to understand exactly how it works but our reliance wasn't just on this title search. This was one piece in a very broader spectrum of diligence that we relied on.
And this together with all of the other things that we did, the financial entity that we went to Banco de Bogotá, and Scotiabank, all of them coming back and all saying the same thing, this property is clean, this property is clean, this property is clean, this property is clean. That gave me a huge amount of comfort, huge amount of comfort.
2. I was not talking about all of the others. I'm still focused on this one, so in 2013, March 2013, and this particular law firm recommended to you by Corficolombiana, they come back, they give you this title study, and you're satisfied with that. That's what you're saying. I didn't want to go beyond, I didn't want to ask them to double-check. I was happy
[Page 464]
with that. That's your answer.
A. Well, I think what you asked me was--and if I'm right, you said, so you did this title study and you were, like, I don't have to do anything else, this is fine. I'm trying to answer your question as --
2. No. Sir, I asked you in relation to this particular study. When your lawyer gives you back the title study, I'm asking you whether you looked beyond this, and you asked them, giving instruction, double-check, are you certain, and so on. For this particular law firm on this particular title study.
"Yes" or "no"?
A. So, the thing we've learned, particularly with engineers, for example, if an engineer is bad, you don't ask him to go do more bad work, right? I'm not saying that they're bad. That's not what I'm saying. I'm saying when--if you're concerned about are the engineering calculations correct, rather than have the same engineer re-run his calculations, you get a second opinion. You get a new engineering report. And if that second engineering report says yup, the first guy's engineering looks good, that
[Page 465]
gives me much more comfort than going to the same guy and saying can you please re-run this.
2. Okay. Now, let's look at other--actually, no, not yet. I want to finish with this document. Looking at this time the next page, Page SP-0008. You see on top of the page starting with second line:
Question: "You said that in your title study you had checked nine deeds and that basically you, in that 10-year chain of recordation, you stated here that you checked the individuals that appear in the entire record of recordation, in the OFAC Lists, Google. Did you also check their legal representatives?"
She says: "Yes."
Question: "Do you remember having checked, or knowing who is the legal representative of Sierralta López and Compañía?
Answer: "Yes, it is there."
Question: "Do you remember?"
Answer: "Yes."
Question: "Who was it?"
Answer: "Sebastian López."
[Page 466]
Question: "No."
And then there's some back and forth about whether it's written and whether she brought the right document. If you go a few lines down:
Question: "So then Mr.-so he tells her it's Mr. Iván López, right?--"when then Mr. Iván López was the legal representative for that Company at that time."
She says: "I will check--we could check." I'm sorry. "I did not bring the attachments. Unfortunately, since the title study was done already some time ago, perhaps the attachments of that--for that deed are not among those items, but this person, Iván López, does not appear on the list that I provided."
So, issue is taken with the fact that she did not check or she actually checked legal representatives for Sierralta López, and she doesn't recognize that the legal representative is Iván López; right?
A. I wasn't present for her testimony. You're discussing minutiae within the context of a
[Page 467]
litigation. I don't--I'm not a title study professional. I know that I've looked at the information. I know that every single owner, everybody that was on title had been scrubbed. I went back, and I looked at the documents. I don't know what the methodology was. I understand that there is not a manual written out when it comes to how to do title research, and thus my assumption is that law firms do their title research in the different ways that they do it. I don't know. I can't pretend to know. All I can tell you is that we relied on her work.
2. So, when you say, I'm quoting from you, "I know that everything was on title had been scrubbed and went back and I looked at the documents," we still don't have the final Transcript. I understand that you said that you went back and you looked at the document; is that what you're saying?
A. I had my in-house counsel look at it.
2. Your counsel looked at it, or you looked at it or both?
A. My in-house counsel--at one moment in time,
[Page 468]
I mean, of course, within this long period of time between let's call it 2016 until today, of course, I've pulled the documents, I've looked at the documents, of course.
2. At the time, did you double-check? Because what she says here is that she checked nine deeds--right?--that's what she did.
A. That's what it says.
2. Right.
Now, let's look at the other title study that you requested in 2016. That's your Tab 13, one-three. Exhibit C-160.
So, this is another title study that was commissioned by Colpatria, for purposes of a loan for the Meritage Project, right?
A. That is correct.
2. And it was carried out by another law firm Osorio & Moreno, right?
A. That's correct.
2. Do you remember this document?
A. I do remember this document.
2. Have you reviewed it for purposes of the
[Page 469]
Hearing?
A. I reviewed it in general before the Hearing.
2. "Before the Hearing."
So, it is dated 17 May 2016. And if we look at Page SP-0014.
You see that there is a number of deeds with the dates; right? And if you look at the three from the bottom, you see that there's Deed 1554, and the date is 12/08/94; right?
A. That's correct.
Q. You're familiar with that deed by now?
A. I might be vaguely familiar with it.
2. 1994. So, looking at what your other law firm did, Palacio, that was in March 2013; right? If she did a 10-year search, that would have been from 2013 to 2003; right? So, by definition, a deed of '94, she would not have picked?
A. I assume it wouldn't hit 1994, yes.
2. All right. But these did, this law firm actually did. They went beyond, and you see that you have dates, if you look at the fecha column, you see you have '94, you have '92, a number of different
[Page 470]
dates; right?
So, if we look at the deed that's Exhibit R-8, Tab 14.
A. Tab?
Q. 14, one-four.
A. Uh-huh.
Q. And I have put in the tab both the English and the Spanish version. You're free to look--do you prefer to look at the original Spanish?
A. I'm not that good at looking at deeds, but sure, if you would like to point me to what you would like me to review.
2. Well, have you seen this document before, Mr. Seda?
A. If I have seen it, I have seen it in Spanish-
(Overlapping speakers.)
A. But, I can't say I'm super familiar with it. I mean, is there anything you would like me to review within this document?
2. I'm just asking if you recognize it.
A. It looks like a deed.
[Page 471]
Q. This particular deed.
A. Again, I probably reviewed it.
2. So, it's a- so you see that it's a deed pursuant to which Sierralta López and Compañia acquired the Las Palmas lots. right? It's pretty important for you, isn't it? It's the acquisition of the Lot which became the Meritage Lot; right?
A. I'm going to rely on the fact that--
2. Please, you have the paper version--
A. If you say so, sure.
2. You have the paper version. Have a look. Take your time to look at it.
A. That's what it appears to be, yes.
2. And if you--so, you see on top, you see the name is going to be highlighted, Sierralta López and Compañia. And then if you look at the next page under (b), (in Spanish) not this one, next page, I'm sorry, the fourth page of the document you see Iván López Vanegas, and you see (in Spanish), right?
A. Correct.
2. So, that's Mr. López Vanegas signing this document, this deed, for Sierralta López, right? For
[Page 472]
the purchase of the land, right?
A. That is what it appears.
2. So, had--this is 1994. Had Otero & Palacio gone beyond 10 years, they would have found this deed, right?--they would have identified this deed.
A. So, for example, if they had gone to 20 year? I don't know. I don't know how many years they would have gone back. But--
2. For example--
A. --for example, if they had gone to 20 years?
Q. Yeah?
A. My assumption is that they would find this deed potentially.
Q. So, looking back at Exhibit 160, that is Tab 13, one-three again. I'm looking at the last page.
A. Oh, sorry.
Q. Tab one-three.
A. SP-001--oh, I'm in the wrong place, sorry.
2. C-160, Tab 13, last page, SP-0015.
A. Ah, yes.
2. And you see there is a disclaimer there;
[Page 473]
right?
A. What are you referencing?
2. The "concepto"--so looking at the last page, "concepto", so you have the English version now. The study was performed based on the information provided up until today, thus Osorio & Moreno Abogados--I'm sorry, are not liable for any information that may appear thereafter that up to date is not known by this lawyer's office, such as information regarding asset forfeiture processes, where such change has not been recorded within the registration page reviewed.
So, this is the second law firm that has gone actually over to 20 years, identified as we have seen the deed 1554, and they say that this is the disclaimer. We can--They don't take responsibility for information regarding asset forfeiture procedures, right? That's their disclaimer. And those that are not recorded, that's to be precise what they say.
A. I mean--This is, I believe, to be a rubber-stamp. I mean, with regards to Osorio & Moreno doing a title search for a National Bank, who contracted her was Scotiabank, not us. We hadn't even
[Page 474]
been privy to this title search until months after we already closed the loan with Banco de Bogotá.
She's affirming in this title search that there's no issues, and if you look at the findings, there are no issues with the title, including the deed that you're referencing, including the individual that you're referencing.
So, in our conversations with her, she stipulated that she had looked at that deed and looked at this person on the OFAC List, the UN list, and all of the essential lists.
2. That's not what she says, is it? The study was performed based on information provided up until today, that's 2016--right?--and the firm are not liable for any information that may appear thereafter that up to date is not known by this lawyer's office, such as information regarding asset forfeiture proceedings.
A. Can we see the Spanish version, please?
2. Sure. I think you have it in the binder.
A. Where would it be located?
2. Same tab. You don't have it in the same
[Page 475]
tab?
A. I have it now.
So, if you look at SP-0013, C-160.
2. What SP page are you referring to?
A. SP-0013.
Q. Okay.
A. And I will read this to you and then give you the exact context of which our conversation was directly with the creator of this.
It says, "in accordance with the documentation provided, the real estate property subject to study is free of any lien and limitation to the right of ownership. I will translate it to you'".
In Colombia it means that the property has no issues whatsoever. This is the equivalent of a positive finding and a title study, okay? And then furthermore, the reason why we added this, where you're getting this document, and unfortunately, the date isn't completely correct because this document was given to Scotiabank at the end of 2015. She reproduced this document for us to be able to add into our legal claim in response to Iván López' tutela.
[Page 476]
And, the reason why we added it was because she says, this is--we came to a completely favorable finding. When Scotiabank ran this, we came to completely favorable finding on the 20-year history of this title. We were happy about that. We felt it showed clearly that there were no issues with the title. We took, we made copies of it. We added it into our filing, and we sent it to the courts in our response to Iván López' tutela.
2. So, that was not my question, but since you're discussing this, the actual translation is that it's free of attachments, since I'm not a native speaker, I'm asking my partner, the Lot is free of liens or attachments over the title. That's what it says.
A. You have to finish the sentence. So, if you look at the--
Q. But that's what it says. I'm correcting your translation now.
A. Well--
2. It is "free of liens or attachments over the title".
[Page 477]
A. (in Spanish) "Limitación al derecho de dominio"
2. Okay, but...
A. The right of title, "derecho", the right of title.
2. So?
A. That--that is the equivalent of a favorable finding. If it was an unfavorable finding, you would see it in bold, and it would--they would specifically stipulate this is an unfavorable finding, and they would say this individual, title number whatever, the escritura that you're referencing. And again, I'm not a professional. I don't know exactly how this works, but they would say this individual, we found them on the OFAC List, our recommendation is that it's not favorable, should not proceed for acquisition of the property.
2. And now, if you go back to the last page, which is the disclaimer, which is what I was discussing with you--
A. Hm-umm.
2. --it is the disclaimer regarding for future
[Page 478]
proceedings not yet recorded on the deed of title.
So, if it's not recorded, they cannot know it; right? That's a disclaimer. They say what they can say based on the information that they find, but they are making a very clear disclaimer, right? I'm just talking about disclaimers. You know what a disclaimer is?
A. I do know what a disclaimer is.
2. You're familiar with disclaimers? You said that earlier.
A. Yes.
Q. Okay. Can we see another disclaimer?
A. Sure.
SECRETARY MARZAL: Excuse me for the interruption, this is for the benefit of the Interpreters. When you switch from one language to the other, you could please make sure to wait a few seconds so that they have time to switch from one channel to the other.
THE WITNESS: Of course. Apologies.
PRESIDENT SACHS: And we should now consider soon to have our morning break, but you're still on the document or...
[Page 479]
MS. BANIFATEMI: I'm moving to another document, so we can have a break now.
PRESIDENT SACHS: I would still have a question relating to this document. I see in the English version on Page SP-0013, Chapter 3, prior titles. And when I compare the titles mentioned here with the titles documents studied under Paragraph 5 on the next page, not all of the document studies, or the deed studies mentioned on Page 0014 appear here under the title "prior titles."
And I also see that in the second paragraph of that Section 3 at the very end when they talk about the Deed Number 3338, they add, "thus, it's been more than 10 years since."
Do you have an explanation why they are mentioning the 10 years in this context here?
THE WITNESS: I can give you context and conversations that I've had with title study professionals.
PRESIDENT SACHS: At the time?
THE WITNESS: At the time of when we recovered this title study because I guess the
[Page 480]
important part is that we had already had our title study, and we were seeking bank financing, and the bank is outsourcing to this firm to do the title search for them. This was not contracted on our behalf. This is contracted on Scotiabank's behalf.
PRESIDENT SACHS: Sorry, who paid for this title search here?
THE WITNESS: Scotiabank.
PRESIDENT SACHS: Please go ahead.
THE WITNESS: So, when we talked to Osorio & Moreno--I think that's her name--I only talked to her once--she said, well, the thing is--because I asked the same question. She says the thing is that, we're only required to do a 10-year title search, but banks are particular about reputational damage, and she says you know we go back 20 years because the banks ask us to go back 20 years because they don't want to have to suffer any reputational damage. It's not about a legal issue. It's about covering their bases on potential reputational issues. Obviously, if a bank gets smeared in bad press, it's irrelevant if they actually win some case of EDD. They don't want to be
[Page 481]
involved. That was the explanation that she gave to me.
PRESIDENT SACHS: This didn't give you the idea to go back to your lawyers and to ask them, well, the bank said it would be more prudent to go back 20 years, could you do that for me also?
THE WITNESS: Well, no, the other thing is that this was, in 2000--this was the end of 2015, our due diligence had already been done, due diligence was a snapshot in a moment in time. We wouldn't even know to redo the due diligence, first off.
And then second off, we had a ton of other due diligence that we had done. We had the Fiscalía study which was ordered by Corficolombiana that went back 65 years. We felt pretty confident. We felt pretty confident that we were protected under the law and that we had done more than sufficient due diligence.
PRESIDENT SACHS: Okay. Thank you. Let's have the morning break now.
15 minutes? Meaning we will resume at quarter past 12:00.
[Page 482]
MS. BANIFATEMI: Mr. President, can the Witness be admonished, please?
PRESIDENT SACHS: Yes, I'm sorry.
You're still under testimony, and therefore you should not talk to anybody during the break.
THE WITNESS: Thank you.
(Recess.)
PRESIDENT SACHS: Let's resume, please.
MS. BANIFATEMI: Thank you, Mr. President.
BY MS. BANIFATEMI:
2. Mr. Seda, we have been asked by the Court Reporter and the Translators to make a pause between our respective questions and answers so that they can pick it up. So I will wait after you've spoken, and please wait after I've spoken--
A. Sorry about that.
Q. You just did what I asked not to do so...
A. Ah.
2. Let's pause in between. Thank you very much.
So, you referred before we went to the break, you referred to the--I don't know how you call
[Page 483]
it, the certification. You know our position, of course. You were here yesterday. You call it the "certification" or "certificate of legality" or "clean title," and what this is, as we explain, is that it's a response by the Fiscalía to whoever is asking--using their rights of petition.
So, you referred to the response provided by the Fiscalía to Corficolombiana. I want to show it to you now. It's not in your binder, but my colleague will now give it to you. It can go--we have one tab spare, so it can go under Tab 45. And so it's for the record it's C-32bis. You should have both the English and the Spanish version. So it's dated 17 September, 2013.
And so, what we see is that, on the first page, it's a response provided to Mr. Sintura, the Corficolombiana lawyer, right?
A. Correct.
2. Thank you.
And it says--so the first paragraph you see what the request is: "I am pleased to provide you with the response offered by the National Prosecutor's
[Page 484]
Office through the publication number, et cetera, in response to the request raised by my office, aimed at establishing whether in relation to the property identified as real estate file number"--and the number"--of the Registry Office of Public Instruments of Medellín, or in relation to its former and current holders, the national anti-money-laundering and Asset Forfeiture Unit carried out an investigation of money-laundering and/or extinction of ownership proceeding. As can be seen in the attached document, there is no evidence of any type of investigation related to this property or its owners in the database of that unit." Right?
So, this is what you refer to when you say the Fiscalía, itself, gave a certificate that the title was clean, right?
A. That's correct.
2. Okay. So, if we go to the next page, this SPP1, SP--sorry, SP1, SP2, you see that the response, so it says: Subject matter right of petition response, right? And it says: "With the purpose of responding to the referenced request, I hereby state
[Page 485]
the following." And it then says: "Having consulted the consolidated system of information this unit manages, to date, there is no record of the people or entities listed below."
So, when it says "to date," this means 9 September 2013, right? This is as of 9 September 2013, correct?
A. Yeah. As of the date of due diligence, yeah.
2. Right.
And then you see there's a list, and this is the list that was provided by Corficolombiana, right? And they take the list and they say for each of the names and companies listed if they have observations or not, correct?
A. What was the question?
2. That they take the list provided by Corficolombiana and for the list provided, therefore each name or each entity, they then say their observations. That's what we see on the table.
A. My understanding is that it is more or less how it's done.
[Page 486]
2. Well, they are being asked to provide responses to a list, so this is the list that they have in front of them, right?
So, if we look at the next page, we see that there is a reference to Sebastian López, and it's in the middle. This is the son of Iván López, right?
A. Correct. I assume, though. Yes.
2. Well, you discuss him in your statement.
A. Yes. After all of the investigations and newspaper articles, yes, I assume it's his son, yeah.
Q. And on the last page, there is a reference on the penultimate box, Inversiones Nueve S.A. corporation.
That is the name previously known as Sierra, the company of Mr. Iván López; you're familiar with that? Sierralta.
A. Yeah, that company rings a bell, yes.
2. So, what they're asked to do essentially is to provide and to give an answer on the list. It's an exhaustive list, and this list that we see, doesn't say "Sierralta." It doesn't say "Iván López", right?
A. Was the company Sierralta, its name changed?
[Page 487]
Q. Yes.
A. So it was-it changed to Inversiones Nueve; right?
2. Well, you tell me. What's your understanding?
A. I don't know.
Q. Yes.
A. I'm not a title study professional. I'm just asking a question.
2. No, neither am I.
(Overlapping speakers.)
A. So, again, with that, taking that in consideration, I mean I think this document for me stands on its own. It's--
2. No, that's what I said earlier. This is--
A. I don't want to try--
(Overlapping speakers.)
2. We're not going to talk over.
A. Oh.
2. There is a change of name, so Inversiones is the former Sierralta, right?
(Nods in agreement (yes). No audible
[Page 488]
response.)
Q. So, the Fiscalía, when they respond, there's two limitations in their response: One, they're responding only to this list. This list doesn't say Iván López, and it doesn't say Sierralta. They're looking--they're not doing a corporate search. They're looking at their files and whether there is anything in their files in relation to the entities and to say on these entities we have nothing, right?
And then they say, "to date"; that's as of 9 September. So, that's what they say, right?
A. Correct. That's what it says, the document says, correct.
Q. Yeah. So, when you say that you were very comfortable because everything was confirming that the title was clean, every time you see that there's limitations. There's answers provided to certain questions. It's Corficolombiana defining the list, and there is disclaimers, as we saw in the second lawyer, in the Osorio, right? So, the due diligence requires that there is something going beyond, right? That's the purpose of due diligence, right?
[Page 489]
A. Can I answer your--I thought your question is was I comfortable with--what exactly is the question?
2. The question is: When you have documents that have disclaimers or have limitations, by definition it means that you have either to double-check or to renew. If they say "to date," that is as of 2013. It may well be that something changes later. When Osorio says that they do not have--the language, these, they have not looked at the asset-forfeiture processes, not yet recorded on the deed of title, that means that that's the status at the time. So "due diligence" means that you have to update, double-check and make sure that due diligence is conducted fully, correct?
A. I think I have to answer this question in two parts because I think there's almost two questions. Okay?
So I think we have a difference of opinion with regards to what is required with due diligence. I'd like it put out a disclaimer. I'm not a title expert. This is not what I do. My expertise is
[Page 490]
understanding real estate, understanding what consumers want, what the right thing is to do, the right property, project, hotel, et cetera. When it comes to technical issues such as this, engineering, title studies, I rely on the professionals that we hire.
With that said, my understanding is title research is--it is a snapshot in time, okay? We signed a Contract, which bound us to acquire this property barring that if after we had done our title research, if we didn't find any issues and we did this with good faith and with good conscience, and we did that in 2013.
And I relied on--I hired the most premier companies, financial institutions, banks to do this research for us, and we went as far as writing the Attorney General's Office to ask them.
So, I looked at the universe of all of these pieces of evidence, and I said, I feel great. I feel comfortable. It was not my intention to request to the--to Corficolombiana team and ask for this 65-year certificate or whatever we'd like to call it, but it
[Page 491]
definitely made me feel good at the end of the day when I got it. I was very proud of it. I didn't know any other projects that had this.
So, what you're referencing in regards to shouldn't I have kept doing title research? I don't know. It kind of brings about a question to me that, well, that then concerns me on the legitimacy of any title. If you buy your home, are you doing title research every year? And if you find something in the future, does it mean you lose your home? My understanding of the law is--my limited understanding of the law is "no"; is that a bona fide good-faith buyer is you look at things at a moment in time. You get comfort with everything the world of going more and beyond, as you said, which I feel that we strongly did, and then you move on, and you hire your architect and you build the beautiful home that you want to live in with your significant other or whoever that is, and you move on. You don't do an annual title study, as you're mentioning to do, continued research to see if you find something in the future.
That's my understanding.
[Page 492]
2. So, your answering a question I did not ask. I did not say or ask whether the due diligence has to be renewed every year. That's not the question.
There's two questions. Question 1: When you are asking, either directly or indirectly, a title study, this is important, right? This goes to the validity of the transaction and whether you can continue and build the parcel, correct?
A. And I greatly apologize. Please repeat the question one more time for me.
2. The exercise is an important exercise. The title study determines the ability afterwards to proceed with the building and the construction; right? This is your--you're in the project. You want to make sure that your project moves on on a good basis, right?
A. It's an important step to do exactly what the law says. Do the steps that are taken for you to create protection under the law to be a bona fide or qualified good-faith buyer without fault. It's--if you don't do those steps, well, then you don't create that protection.
[Page 493]
2. Right. But it's an important step, right? In your line of business, it's a very important step.
A. Yes.
2. So, due diligence as a result is a very important milestone in that process, right?
A. I agree with you.
2. So, Question 1: When you said earlier in response to the President's question, that you said that at the time, with the Osorio lawyers, went through the findings with them. This means that you can't--even though they were retained, as you say, by Colpatria, you always have the ability to sit down and double-check and make sure and get comfortable on the due diligence; correct?
A. I don't know if you're referencing that you have time to get comfortable or time to get uncomfortable because I--again, the time, the way I understand the law, the way individuals rely on the law is--you gentlemen, I don't know if you own homes or you don't, you go and you buy a home five years ago, and you do--you hire a company--I don't know if you guys actually read the title reports yourself. I
[Page 494]
normally don't go that much into detail on them. I look at conclusion, but you buy a home five years ago, you receive a favorable title research report, you receive another one, you hire a bank, you receive a favorable report from them or finding. You run it through an escrow or a fiduciary, that comes out favorable, and you're in the middle--five years down the road and you decide to build a pool, if someone comes and says something, I don't think that you stop building the pool because someone says 20 years ago I lived in that house, and I was displaced from that home.
And--if that's what you're getting at. I'm not sure exactly what you're getting at, but I definitely say we don't agree on when you're supposed to do due diligence. My understanding of the law is due diligence is done at the acquisition of the property, on the onset of the acquisition. And any diligence done after the fact, the way I understand the law is useless. I believe the law pretty much states is you can't do due diligence after you acquire the property and have it serve you and do good for
[Page 495]
you.
Q. So, if new circumstances arise you don't
have to update your due diligence, for example.
A. Again, I'm not an expert on the law, but my
understanding is no.
Q. So, you--and thank you for the full
narrative and monologue. I will ask you to be
shorter, even if you want to give context because
again, we don't have the time. So, my question went:
To the time at which this due diligence was conducted,
so when you sat down with Osorio, you sat down with
Osorio for a purpose; right? You wanted to make sure
that they had done what they were supposed to do,
correct?
A. I never sat down with Osorio and Palacio--
Q. That was my understanding, in answer to the
Tribunal. At the time, I discussed with them. How
did you discuss with them?
A. Are we talking about Otero & Palacio or
Osorio--
Q. Osorio.
A. Oh, okay. So, again you said at the time of
[Page 496]
the acquisition of the property or the time of the--
Q. At the time of the due diligence. This I
understand, was your testimony earlier. That at the
time when the study was done in 2016, you had
discussions with them, right? That's what you said.
A. To be clear, the title research that we're
talking about was not due diligence for title research
for acquisition of the property. This was not title
research that was contracted by us. This was title
research that was contracted by an entity, Scotiabank,
that was interested in financing the property, the
Project. So, for example, if I had bought this
project--if I had bought this property 40 years
before, yet I wanted to get financing today, even
though I've already bought the property 40 years ago,
the Bank would still run title research today for
their own requirements under Federal law.
Q. So, when you say that you were comfortable
with all of certifications and title studies and all
of the comfort that you received, now you're saying
the only due diligence that mattered was the one that
you commissioned to Otero? Is that what you're
[Page 497]
saying?
A. No, that's not what I'm saying.
Q. So, which due diligence was the right one,
then?
A. The due diligence, the way I understand the
law, for example, my understanding is a bank or a
financial entity, they have their own internal
processes. We, Royal Property Group or Newport, we
don't have those systems, and so what we do is we hire
the individuals that do have those system. So, the
due diligence that I did--or let's say that I did in
representation of our investors was to hire a
prominent well-known title research firm and tell them
to please research the title. Whether it was--however
many years it was going to be, they're the
professionals. I relied on their professionalism and
their knowledge. We hired a premier and what we
thought is the best fiduciary in the country, owned by
the largest financial conglomerate, 50,000 employees,
and they did their processes. They recommended
writing to the Attorney General's Office as part of
that package of due diligence that we're discussing
[Page 498]
now that I relied on, and I was shocked. I didn't
even know you could do that. And when we got the
conclusion back, it made me feel very comfortable.
Q. So, it's not--
(Overlapping speakers.)
A. I apologize, let me just finish the last
thing. So--
Q. I will ask that you give quick answers.
A. So, what I relied on--to get to the
point--is I relied on the combination of all of those
elements. That's what I relied on for my due
diligence.
Q. So, you're a moving target, right? If you
say, I'm relying on all of that universe, and then I
show you the one asked that is not a due diligence is
the Petition by Corficolombiana to the Fiscalía, you
say but this is Corficolombiana, if we discuss the
Osorio one, you say this is Colpatria.
So, which are you referring to? Your due
diligence, the one that you commissioned was the
Palacio, right? Otero & Palacio? That's the one that
you commissioned in 2013?
[Page 499]
A. So, I think as we know, we didn't--we were
under Contract to purchase the property, but the
acquirer of the property is Corficolombiana, so
they're doing the due diligence that's required by
them, and I'm relying on them doing that due
diligence, so I have a reliance on that they're going
to do that work right. They're going to acquire the
property, that property's going to get deposited into
a Trust structure, so they have to do it. They have
to do it.
(Overlapping speakers.)
Q. So, let's take now the three documents we've
seen, Otero & Palacio, they do a ten-year search.
They have no disclaimer. They just look at OFAC and
Google, and they say, "I haven't seen anything."
Osorio, they actually do see the deed of '94, which is
purchased by Mr. López Vanegas. They have the
disclaimer that says we have not looked at Asset
Forfeiture Proceedings, not yet recorded on the deed
of file. And then we have the Petition to the
Fiscalía in 2013--I'm going back in
time--right?--where Corficolombiana gives a list to
[Page 500]
the Fiscalía. The Fiscalía responds, as of the time
9th September, this is what I have, and what I have is
a response to Corficolombiana on the list that
Corficolombiana gave; right? I'm just establishing
what was seen at the time. We agree on that, right?
A. At the time is 2013--
Q. Yes.
A. --so the problem is you're adding in a
document from a lapse of time, not at the time.
What I'm referring to--what we relied on, to
apply and be protected by the law as qualified
good-faith buyers was the diligence, the realm and
world of diligence that we did at the time of the
acquisition of the property. Those items are: (1)
the study by Otero & Palacio that we contracted; (2),
the petition, certificate, whatever we will call it,
that was positive--received a positive response from
the Attorney General's Office, money-laundering and
Asset Forfeiture Unit.
No. 3, the hiring of a nationally recognized
fiduciary that had strict guidelines under the banking
and finance superintendency and which we knew, even
[Page 501]
though we hadn't necessarily seen their manuals
because they're proprietary in their in-house
documents, we know that they have to do this because
it's regulated by law, but they have to scrub not just
the property, but the counter-party for--who we're
dealing with. That's not just the asset itself but
La Palma, the counter-party who we're buying it from.
And so, considering that they're extremely well-to-do
professionals, all of those elements that I just
described to you, that are those three elements, gave
us a high level of certainty and comfort that we were
doing what was right, what was required by the law.
Q. So, there were two, 2013 documents; right?
One from Otero & Palacio, that's the title study that
you asked. One is the petition by Corficolombiana to
the Fiscalía, with the limitations that we saw. And
another one later in time, Colpatria in 2016 is the
Osorio one, right? Which--with also the disclaimer
that we saw, right?
A. Yeah. I just want to be clear that--
PRESIDENT SACHS: I think we're now turning
in circles because the three elements that Mr. Seda
[Page 502]
mentioned did not include the 2016 study. But the
fact that they--
MS. BANIFATEMI: I do not know what is the
third element--
PRESIDENT SACHS: Well, I think he was clear
on that.
BY MS. BANIFATEMI:
Q. What is your third element?
A. The third element, while we did not receive
a report, was the mere hiring of a federally regulated
financial institution which had impacted guidelines
and regulations which require it, by law, to run KYC.
The same as if you--
Q. The fact of--
A. Please let me--
Q. The fact of having Corficolombiana--
A. Please let me just finish.
Q. I would like to have shorter answers.
A. Sure.
Q. You're having very long ones--so, the fact
of having Corficolombiana--
MS. BANIFATEMI: I'm trying to establish,
[Page 503]
Mr. Arbitrator, what we're talking about.
BY MS. BANIFATEMI:
Q. So, it's the two documents we saw and the
fact of having Corficolombiana, that's what gives you
comfort? That's your testimony?
A. Having hired Corficolombiana.
Q. Right.
A. Yes.
Q. And then you do rely, later in 2016, on that
title study because you refer in your statements to
multiple type of studies. These are the two title
studies that we've seen. This the second one in 2016,
right?
A. So, I'm not relying on the title study. I'm
merely drawing your attention to the fact that this
title study, the Project Quartier which we discussed,
and I could go through a list of, I don't know, maybe
five, six, seven, eight, ten other financial
institutions that have all run diligence on Mr. Iván
López, and not a single one has ever had a negative
finding with regards to this gentleman.
Q. We'll come back--
[Page 504]
A. So, I'm not relying--
Q. Well, you are.
(Overlapping speakers.)
Q. Paragraph 88 of your statement, Number 1,
which I quoted earlier that that's in the context of
your discussions with Mr. Mosquera and Iván López.
"Newport had transacted in good faith, and extensive
due diligence had been done on the properties included
four title studies and the certification from the
Fiscalía," so you are relying on the title studies;
right? And that includes Osorio.
A. I said four title studies.
Q. Okay. But this is one of them?
A. This is not one of them.
Q. What are the three others, then, if it's
Otero?
A. So--
Q. Because you don't mention anything.
A. We performed an in-house title study, which
we always do. I had my in-house legal counsel, so we
don't--so we don't waste money. The first thing we do
whenever we're going to go into a purchase and sale
[Page 505]
acquisition is, rather than hire an expensive law firm
to do a title study, we do an in-house title study.
That's important for us.
PRESIDENT SACHS: Is that title study on the
file?
THE WITNESS: No. It's just--it's an
informal title study we do in-house, so we'll have our
in-house counsel, we will say please review the title,
look at it, make sure it's okay. Once I get the word
back that it's okay, then we go okay, now let's hire a
law firm that's going to do this extensive review.
Q. So, we do not have that on record, right?
A. No, we do not have that on record.
Q. And how did you conduct that due diligence?
Was it a Google search? How did you do that?
A. I gave it to our in-house counsel, and he
did whatever I assume is his policy and processes.
The same, I think, that we performed, for example, the
title study on Charlee, and I think Luxé. Charlee we
then subbed out and had a title study done after the
fact. Luxé, I don't remember if we relied on our own
or if we relied on the fiduciary's. I don't remember.
[Page 506]
Q. And, of course, we don't have the benefit of
that but we have the benefit of another title study
which is not in relation to Meritage. I would like
you to look at Exhibit C-144, that's Tab 15.
And this is a title study by the law firm
Rodríguez Azuera--right?--regarding the land for your
Project in Sante Fé de Antioquia. Right?
A. That's correct.
Q. And it's dated November 30, 2015, as we see.
So, if we look at the first page, they say how they do
it, right? It's a bit different from those that we've
seen so far. "This study is based on the legal
verification or analysis of the legal situation and
background of the premises, obtained from data
extracted from the properties' Public Registry and
from the analysis of the acquisition titles thereof.
The study accomplished with regard to the background
title situation of the premises includes the last 20
years, since any anomaly evidenced before such term
would not affect the legal situation of such
properties given that, should a cause of action arise
based on an act entered into or occurred prior to such
[Page 507]
term, is bound to be objected adducing the status of
limitations to defend the current legal situation of
the plots."
So, they explain the process and here we see
that they do 20 years--right?--in relation to this
property. Right?
A. That's what the document says, correct.
Q. Do you remember this document?
A. Yeah, vaguely, but yes, I remember it, I
reviewed it, yes.
Q. And if we look at the next page.
And they actually have a disclaimer, or what
they call here in the English version "Reservation,"
which is much more substantial and substantive than
what we had in the Osorio one. So, I quote from the
Page 2: "The land restitutions civil division of the
highest court of Antioquia Judicial District in
Decision dated 13 February 2014, indicated that a
title study does not suffice to infer good faith
without fault to acquire a premise, and that there
should be extremely diligent inquiries regarding the
social and political context and the effects caused by
[Page 508]
the internal armed conflict in order to have certainty
that none of the holders of the ownership real rights
was kicked out or forced to abandon their land or that
any of the grounds described herein below have been
configured."
And then you see there's a reference to two
laws, first is a victims law, in relation to ownership
real rights that have been deprived or forced to
abandon. And then have you reference to Asset
Forfeiture Code and the Law of 2014, which refers to a
number of illegal activities that are listed here.
And you finish on that page: "Our firm Rodríguez
Azuera Contexto Legal makes a disclaimer consisting in
that the Report of the title study herein submitted
reflects all relevant legal acts in the ownership
background chain of the premises, without having
inquired on the occurrence of any of the above stated
grounds that may lead to possible asset forfeiture of
the premise subject matter of the study." Right?
So, my first question is, you see from the
reservation, if we go back to the previous page, that
sets out the standard for due diligence, and that's
[Page 509]
based on a judicial decision of February 13, 2014,
right? And it says: There should be extremely
diligent inquiries regarding the social and political
context and the effect caused by the internal armed
conflict in order to have certainty that none of the
holders of the ownership of rights was kicked out or
forced out; right? That is exactly what Mr. López
Vanegas is complaining of, isn't it?
A. And apologies, I just want to look at the
Spanish version.
Q. Sure.
A. Give me one second. Thank you very much.
And, I apologize. What page is this where
it says "Reservation"?
Q. Two. The second page.
A. So, a few things.
I agree, if you look at 20 title searches,
they're all going to have different clauses and
qualifiers, and they're going to look quite different.
Number 2, what this is referring to is not
EDD. This is a different law. It's restitution of
lands. And it has to do with people being pushed off
[Page 510]
of lands due to the armed conflict, and it is a huge
problem that's occurring in Colombia. A huge issue.
Q. But next you have Asset Forfeiture Code;
right? That's the second one.
A. And sorry, I'd like to just make a
correction, when I say "a huge issue," I've seen
similarly a lot of fraud, a lot of people coming back
50, 60, 70 years after the fact and saying-I want--I
want to take that land back. So yeah, of course,
attorneys are very cautious, they're very careful
because as I think you guys mentioned yesterday, you
could even go back 20 years. But apparently you're
saying that even that's not enough. It's not--it's
not prescribable a lot, so.
Q. My question again is: If you look at
"Reservation," it's not what the lawyers said. The
lawyers indeed have this disclaimer saying what they
have not and will not certify. What's important here
is that, it's the standard of due diligence and it's
based on a Judicial Decision of '14 where it says that
title studies should be extremely--there should be
extremely diligent inquiries into the social and
[Page 511]
political context and effect caused by the internal
armed conflict. So this is a very high threshold.
You have to, when you do due diligence is not enough
to just go through a list of names and stop there or
to limit yourself to a number of years, 10 years when
you may have something beyond. You actually have to
be extremely diligent. And the reason for that is the
social and political context, and effects caused by
internal armed conflict. This is the context we're
talking about. We're not in France. We're in
Colombia, Medellín, right?
A. Yes, we're in Colombia.
Q. So, the high threshold you were familiar
with, right? By definition, if you do so many titles
that is Antioquia, you know what the standard is,
right?
A. If your question is when this title study
was done in November 2015, if I remember this
paragraph--to be completely honest with you, no, I
didn't read this particular paragraph. I ordered the
title study, like many title studies in the past, look
over it briefly, get to the conclusion section, see
[Page 512]
that it's favorable, trust that the professionals I'm
hiring know what they're doing, they're top caliber,
and that gives me comfort.
Q. Potentially having discussion with them when
they give disclaimers such as this?
A. Again, I just said, I do not remember
reading this specific paragraph.
Q. No, I'm asking you what the process is for
you. You do not discuss with them or do you discuss
with them? For you--When you have a law firm saying
I'm doing this title study but you have to be--the
standard is extremely diligent, nobody brings it up to
you, even if you don't read, nobody tells you, this is
serious, we have to be extremely diligent, so we have
to go beyond normal circumstances?
A. I can affirm to you as a matter of fact,
when this law firm, Rodríguez Azuero Contexto Legal,
performed this work and gave us this title study, not
a single person came and said here is this title
study, but I would like to add a qualifier to this,
and said any of the things that you said. This thing
was sent to us via email. I called the attorney, and
[Page 513]
I said, so all is good? And he says, yeah, title came
back great. Clean.
Q. And you don't look at the standard and you
don't look at the disclaimer?
There is a disclaimer about Asset Forfeiture
Proceedings.
A. So, I also don't look at when I get an
engineering report, I don't re-run the calcs, I don't-
-I wouldn't even understand how to do it. I call the
attorney, I said I got the title study. Was it good?
Are we good on Title? And the attorney says, yeah,
ran the title, it's good, we're good to do. And that
makes me comfortable.
Q. The question is not you personally,
Mr. Seda. The question is your company, is the
process through which you collectively go. So,
whether or not if you're not satisfied and fully
relying on a lawyer, you lawyer should do that, and
your lawyer should be familiar with disclaimers and
standards established by court decisions, right? So,
this is, as we agreed, this is an extremely important
milestone when you acquire a land in Medellín, in
[Page 514]
Colombia, against the background of drug-trafficking
and asset forfeiture procedures which is the law. You
know the law when you go to Colombia-right?-the law is
there, you know that there's asset forfeiture
procedures; don't you?
A. I do know there's asset forfeiture
procedures. That's why we hire the professionals to
make sure we don't become enshrined in one.
Q. Right.
And, so, if we look at the law, since you
raised the limitation issue, that's Exhibit 3bis,
Tab 16. And that's the Law of 2014, "Asset
Forfeiture," you see Article 21, Page 6. Right? It
says "Prescription. The Asset Forfeiture Action is
not barred by statute of limitations. Asset
forfeiture shall be declared regardless of whether the
grounds for its applicability have occurred prior to
the entry into force and effect of this law."
This shows, if anything, that it is a very
serious matter. If there is no statute of limitations
because it goes to criminal action, correct?
A. You're asking me to interpret law.
[Page 515]
Q. No. I'm asking you if this is--I'm
just--you say I don't know if there is a statute of
limitations, and I'm saying well, this is--this law
says there is no statute of limitations.
A. I agree that that's what the text says
there. I agree that there are individuals that view
it that way. I'm not going to try to opine or dissect
the law and give you a professional opinion. I think
we should leave that to the professionals. I'm not
well equipped to do that.
Q. I understand, and that's fair. The question
is not whose view it is, it's the objective law. The
law says there's no statute of limitations, so my
question is: Did you know that there's no statute of
limitations for Asset Forfeiture Proceedings?
A. No, before these proceedings, no.
MS. BANIFATEMI: Mr. President, shall I
continue? I'm in your hands as to when you want to
have the break.
PRESIDENT SACHS: I think we should have our
lunch break now and resume at 2:00.
MS. BANIFATEMI: I'm happy with that. Thank
[Page 516]
you.
PRESIDENT SACHS: Thank you.
Again, please do not talk about the case,
with anybody during the break.
THE WITNESS: Thank you.
(Whereupon, at 12:56 p.m., the Hearing was
adjourned until 2:00 p.m., the same day.)
AFTERNOON SESSION
PRESIDENT SACHS: Okay. I guess we are
ready to continue.
So, please proceed.
MS. BANIFATEMI: Thank you, Mr. President.
BY MS. BANIFATEMI:
Q. So, Mr. Seda, can you please take your First
Witness Statement, Paragraph 62.
This now is--we're in 2014, early 2014, and
you describe here the first time that you hear from
Mr. Iván López Vanegas. So, here just to summarize,
62 you say that you received phone messages from an
individual, Iván López Vanegas, who claimed to be the
rightful owner of the land on which the Meritage
Project was being built.
[Page 517]
On the same topic, I think, if you take now
your Second Witness Statement at Paragraph 7. It's a
long paragraph, so I will start with the second half.
In the middle starting with "thus," so we're in the
same period when--early 2014, so I quote: "That's
when López Vanegas surfaced in 2014 with his claim to
be the rightful owner of the Meritage Property. I
tried to assess what possible basis there could be for
his claim because I had never heard his name before.
It did not appear on the title study. And when I
asked Juan Pablo Lopera, our in-house counsel, to
conduct an internet search of López Vanegas's name, it
revealed that he had previously been convicted of
drug-trafficking charges in the United States. This
gave me further reason to dismiss his claims, as they
came from what I considered to be a highly discredited
source."
So, essentially this is straightforward. So
he says he's the rightful owner, right? This is what
he says to you. And then you establish for
yourself--this is your own due diligence, I assume-
that he's a--what you say "convicted of
[Page 518]
drug-trafficking," right? Drug trafficker,
essentially. That's what you think at the time.
A. Just to add clarification. I never spoke
directly to him. He called my offices, and he left
messages with our secretary. Whether it was him or a
representative of him, I can't tell you cause I didn't
talk to him.
And the--regarding the diligence or, let's
say, inquiries made, I asked our in-house counsel,
Juan Pablo Lopera, to look at the documents and see if
he was on title. He responded back to me that he
wasn't. I asked him to look--to look and find out--I
didn't say, for example, do a Google search. I said,
figure out who this guy is. And he says, well, this
may be--this may be him. And there was an
article--there were two articles. There was one
article referencing that he had been extradited to the
United States on drug charges, and then there was
another article that said he had been exonerated after
the fact. Nonetheless, he seemed quite shady.
Q. Right.
But what you established for yourself at the
[Page 519]
time is that he's based on that search, is that he's a
convicted drug-trafficker, and then it's a highly
discredited source, I'm just reading from your
testimony.
A. Yes, I wasn't completely sure what to think
or put together with the whole--he was extradited and
then exonerated. I wasn't sure what to think, but
this wasn't the first extortion claim that we had
received. In every project we receive at least--I
don't know 5 to 10 extortion claims, most very small,
very silly things, run-of-the-mill things, and this
just seemed like another one of those same old things.
Q. Okay. So, then, if we look at your First
Statement, if you could go back to it, at
Paragraph 65.
A. I'm sorry, paragraph what?
Q. 65.
A. Thank you.
Q. This is where you state that Mr. López
Vanegas went to see the President of Corficolombiana,
right? We have that at the bottom of the page and top
of the next page. That's what you discussed, I
[Page 520]
presume, with Corficolombiana, that--and you say, I
quote: "We discussed and agreed that López Vanegas'
claim had no merit, that the diligence done had been
more than sufficient, and that such blatant extortion
attempt should be ignored." Right? And then you say
that the harassment ceased for the time being.
When you say "we discussed," with whom did
you discuss that at Corficolombiana?
A. I'm sorry, what paragraph are you
referencing?
Q. 65, top of Page 32.
A. I think it's pretty clear that I'm talking
about when I say "we," it's referring to Jaime Toro
and myself.
Q. Okay, so the president--right?--of
Corficolombiana.
A. Not of Corficolombiana--sorry for
interrupting.
Not of Corficolombiana. Of the--at that
time I think he was the head of the real estate--what
does it say here?
Q. Right.
[Page 521]
A. Real estate, National Director for Real
Estate for Corficolombiana.
Q. Okay. So, you decided to ignore and that
was it, right? That's your testimony in 2014.
A. No.
Q. Actually this is middle of 2015, I'm sorry.
Okay. I look--if I--I want to get the dates right.
So is it the middle of 2015?
A. I believe so that--my recollection is more
or less that.
Q. Okay. We don't have testimony from
Corficolombiana in this case, do we? We don't know, I
mean, we have to take your word for it; right?
A. You have to believe my testimony? I mean, I
don't know if you reached out to Corficolombiana, no.
I've spoken to them, and they stand by these
statements as well.
Q. Did you ask them to provide testimony?
A. No, we didn't ask them--well, that I know of
we didn't ask them to provide testimony. I know they
were spoken to by--well, I don't know if I'm supposed
to even speak about attorney conversations.
[Page 522]
Q. Well no, if it's attorney-client privilege,
I don't want you to disclose it.
A. Okay.
Q. So, now, your Second Statement, Paragraph 9?
A. Second statement?
Q. Yes.
So, this is essentially the reactions after
López Vanegas contacts you; right? So here we have
now La Palma, and you discuss here no more, I quote:
"No more than 24 hours after López Vanegas contacted
Royal Realty, I also reached out to Fanny Giraldo, the
legal representative of La Palma. Giraldo informed me
she had never heard of López Vanegas before either.
La Palma, as the land sellers, looked into López
Vanegas. After this, Giraldo told me that they had
made inquiries with the Fiscalía, which informed them
that López Vanegas had approached them but his claims
were baseless and would not go any further, and that
they were interested in bringing extortion charges
against him in connection with the threats he was
making."
So, again, just like for Corficolombiana,
[Page 523]
you discussed with Ms. Giraldo and she says, not a
problem, you should not be concerned about this,
right?
A. So I contacted La Palma, considering they
were the sellers who were conveying title to us, and,
as it says here in my Witness Statement, they said
they had never heard of this individual before. They
advised me that they were going to reach out to the
Attorney General's Office to make further inquiries.
They did, and I believe there's a lot of stuff said
about Mr. López, that he was a criminal, that he
escaped the hands of Colombia, so on and so forth, and
they said that they were looking to go against him.
Yes.
Q. So, did you see to--did you ask to see the
response that Fiscalía had provided to Ms. Giraldo?
A. My understanding is it was out of a
conversation between their attorney and someone within
the Attorney General's Office.
Q. You don't have any details on that. She
just told you that she had spoken to someone at the
Attorney General's Office, right?
[Page 524]
A. No. They didn't provide me with a letter or
written response of their oral communication with the
Attorney General's Office, no.
Q. So, you don't know if that was a formal
request to Fiscalía or just an informal discussion
with someone who's unnamed and you don't know who it
is.
A. My understanding was that they went and
spoke to someone at the Fiscalía, and this was the
response that was given to them. I didn't ask what
department, what--all the things that you're advising.
This timeline happened very quickly.
Very soon after that matter, I was on
national radio providing all kinds of proofs of what
we had done and addressing the entire world, let alone
the Fiscalía.
Q. That's not my question. My question is when
you discussed with Ms. Giraldo, what did you ask her?
She told you that she had discussed with somebody at
the Attorney General's Office, but you don't know who,
you don't know if it was formal or informal. We're in
the world of hearsay now. We just don't know who and
[Page 525]
how and when, right?
A. That's correct. I do not know exactly who
they spoke to, exactly what the conversation was. It
was a--they gave me a summary of what they had spoken
to their attorney about.
Q. And you didn't ask Ms. Giraldo to give an
affidavit in this case, did you?
A. I believe--I spoke to her. I
believe--again, I'm not a well-versed attorney. I
don't know how to put this. Without breaking
privilege, I believe my counsel spoke to her?
Q. Okay. Let's leave it at that.
Now, next paragraph, 10, here you say, and
I'm quoting: "I also disclosed the threats I had
received from López Vanegas to Corficolombiana. I
further arranged meetings with all existing unit
buyers in the Meritage Property and gave them copies
of the Otero & Palacio title study"--that's what we
discussed earlier--"and the Fiscalía's Certification
of No Criminal Activity." That is also what--the
document that we saw earlier, right? The 9th
September 2013.
[Page 526]
A. Sorry, one moment. One moment.
Okay. Just to put this in context, we were
first talking about immediately hearing from
Mr. López. Then now we're talking about this between
these two moments in time, there is a W Radio
interview, so just to give context so--
(Overlapping speakers.)
Q. I'm following what you're saying in your
statement so--
A. Yeah.
Q. --here you discuss--in nine you said that
you discussed with Ms. Giraldo, and then you say that
you discussed that with the buyers; right?
A. Correct.
Q. And that to give comfort to the buyers, you
showed them the Otero & Palacio and the Fiscalía's
response to the Right of Petition, right?
A. That's correct.
Q. And then if we go back to Paragraph 7, just
a page before, so essentially to summarize what you
said before, you hear from López Vanegas, you discuss
with your in-house lawyer, he determines based on what
[Page 527]
he can find that he's a conflict--convicted
drug-trafficker, not exonerated. In fact, just for
the record, he--the court found that they didn't have
jurisdiction, so--but in the U.S., with charges in the
U.S., so you talked to Corficolombiana, you talked to
Giraldo, and you talked to the buyers, right? So
that's what you do, following the charges, right?
Sorry--the contact by López Vanegas--
A. Yes. And just to add context, I am not
saying that he was exonerated. I'm simply giving
reference to an article that we found which says that
he was exonerated and/or absolved. That's it.
Q. Okay.
A. But more or less the chronological order of
what you just said sounds about right.
Q. Okay. Now let's look at Paragraph 7, now
this time the top part of the paragraph, and here you
respond to Colombia's Counter-Memorial, and you say, I
quote: "And no, I did not immediately report this to
Authorities in Colombia in 2014 for several reasons.
As a developer"--and that now is what you mentioned a
bit earlier--"as a developer in Colombia, it is a
[Page 528]
harsh reality that on every project, you will receive
extortion threats from opportunistic individuals,
whether neighbors, city employees, state officials who
claim to have the power to interfere with your
project. If you stopped every project because of
these threats, you would never get anything built. If
you paid every demand, you would never get anything
built as well as likely break the law. And the fact
is that reporting such threats to Authorities can
often make things considerably worse because public
officials are involved in the threats in the first
place or may become so once they are reported. So the
first course of action is almost never to report such
demands to the Authorities, but to reject such demands
and if the perpetrator will cease of" the--"of his own
accord." Right? So these are the reasons for not
reaching out to the Authorities in Colombia, right?
A. Correct.
Q. So, essentially the course of action is to
ignore and not do anything.
A. No. Definitely the course of action is not
to ignore and do nothing. Again, I gathered the due
[Page 529]
diligence that we had done. I spoke to La Palma. I
made a decision to address the entire nation. I went
on W Radio, which is the largest syndicated radio show
in the country, has the largest viewer base, and I
said look, rather than hide from this, I want to
confront this head on. And I said, I'm going to talk
to every single person that there is. I'm going to
make this as clear as possible. We're not running
from anything.
Q. Earlier, Mr. Seda, you responded that you
had your own due diligence in-house, correct?
A. Yes, that we had performed preliminary title
study ourself, yes.
Q. Yes. So, in 2014, when an individual
approaches you and makes threats and says that he's
the rightful owner of a property that you're building,
that you have not started to build yet but you're
preparing to build, if you are a good-faith,
without-fault buyer, wouldn't the normal course of
action be to check perhaps with a renewed due
diligence? You could have asked your lawyers or
outside lawyers who's this person? Can you do a check
[Page 530]
on him? Did you do that, other than the Google search
by your in-house lawyer?
A. So, again, what we did is we looked at the
title information that we had in the records of the
due diligence that we had done. My in-house
counsel--my in-house counsel reported to me that they
didn't find Mr. López Vanegas on title, that he was
not an owner of the asset. We went on national radio.
I went personally on national radio, and I addressed
the entire nation on the matter, and the due diligence
that we had done was already--I'm not sure what we
were supposed to do. Just simply walk away from the
Project? We had already invested a considerable
amount of money into the Project.
And this gentleman seemed like a fraudster,
and he didn't mention extinction of domain. He
actually mentioned bringing reputational damage to our
property, to our project. He said, I'm going to go to
the press. If you don't do this, I'm going to harm
your project by going to the press.
And I just simply would like to add one
additional thing. I'm viewing this from the lens of a
[Page 531]
developer who has been approached by a long list of
people who tried to extort us. This is all kinds of
extortion attempts. None necessarily like this, but
they all come in their own different package. And he
didn't seem credible. He disappeared for an entire
two years after he did what he wanted to do, which is
get this thing on the radio. We confronted it. We
didn't hide. He went away.
Q. Did you really confront it? The question
is--and I will ask it again--the question is: When
you have someone claiming to be the rightful owner of
a land on which you're preparing to build, you are
building in Colombia in the region Medellín, in the
context--regulatory context of asset forfeiture, you
know the law, your lawyers certainly know the law, and
you know that there's always a risk that if there's a
title--a claim to the land, that may stop the process.
This is the nature of Asset Forfeiture Proceeding.
So, isn't the normal course of action to do
a further due diligence, to look at other than Google,
to ask your lawyers to ask another law firm, maybe, to
do a Google search--sorry, a title study search to
[Page 532]
make sure that he is, indeed, who he says he is, which
is a prior owner or current owner? Wasn't that the
normal course of action, rather than just ignoring
things?
A. So, I did check with counsel. I did check
with out--with in-house counsel and out-house counsel,
and I asked what should we do. And they advised us.
They said, this guy is a fraudster. You guys did
everything within your capacity here. Your diligence
goes far beyond what's necessary. You guys are
good-faith buyers. This guy is talking about a
kidnapping attempt--or excuse me, not attempt. He's
talking about this while he was wrongfully extradited
and in jail. His son was kidnapped and some issue
that had happened more than 10 years before the moment
we're talking about, and our view was, and as I said
on national radio, we are qualified good-faith buyers.
We've done everything that we could have possibly done
on this title.
I believe his issue is with whoever the
perpetrators are, if this is even true, who--who did
the crime against him as he supposedly is saying. I
[Page 533]
said on national radio, he should go to the
Authorities. We said that.
Q. The documents that you showed to the buyers,
right? You give them comfort, right? You go on
national TV, like presidents who address the nation.
So you're saying, I'm a good-faith buyer. And you
have two pieces of document that you show to the
buyers, the Otero study, right? Which we saw was 10
years. It actually doesn't look beyond when we know
that asset forfeiture is not subject to statute of
limitations. Your lawyers should have told you that,
correct? It can go beyond 10 years. Did you ask your
lawyers about it at the time?
A. I asked my lawyers--
MR. MOLOO: Mr. President, if I just may, we
don't want to look defensive in any way, but there are
a lot of questions about what did you ask your
lawyers, what did your lawyers say. I just want to
note that we're getting awfully close to trespassing
on privilege.
MS. BANIFATEMI: I'm very sorry. This is
not about these lawyers in this room regarding
[Page 534]
arbitration. I'm talking about the facts of the case
at the time and how Mr. Seda reacted to what he said
to be extremely serious threats, and I'm not asking
about the substance of the advice.
PRESIDENT SACHS: So far, it's still
permissible.
MS. BANIFATEMI: Thank you.
PRESIDENT SACHS: But we will continue to
observe the further content.
THE WITNESS: Again, I believed he was a
fraudster. I wanted to check with counsel. I did.
They made an assessment. They looked and said,
"Listen, we did this due diligence. We believe we did
it honestly. We did it in good faith. This
gentleman--this gentleman doesn't have any true claim
to this title." I did all the things that I told you,
going on the radio. I talked to Corficolombiana.
I mean, we didn't simply--I didn't simply go
on the radio and say, this guy's a fraudster, that's
it. I did a lot of work.
SECRETARY MARZAL: Sorry for the
interruption, but the Transcript, English Transcript
[Page 535]
1 seems to be off.
2 (Pause.)
3 SECRETARY MARZAL: It's working now. Okay.
4 Sorry.
5 (Comment off the record.)
6 THE WITNESS: And then to add one final
7 thing. I didn't--we didn't receive this information
8 in mid-2014 and we ran out and started constructing on
9 a project. We continued with the normal course of
10 business. We continued to sell units. Those funds
11 continued to be deposited in a very safe manner in the
12 fiduciary trust, not used by us. We continued to use
13 our own capital to further the Project along, and
14 years went by before anything transpired. Two years.
15 BY MS. BANIFATEMI:
16 Q. So, you just continued with the normal
17 course of business, continued--you assured the buyers,
18 you continued to sell, you continued to prepare the
19 construction, right? That's what you're saying.
20 A. I continued to move along with the Project
21 after doing careful analysis. I continued to sell
22 with the caveat that any of the units sold, any of the
[Page 536]
1 monies that were being given to us by Unit Buyers were
2 given directly to the fiduciary. They were
3 safe-guarded by the fiduciary. We didn't start
4 construction for at least a year--well, more or less a
5 year after this issue transpired.
6 Q. You did not deem necessary, given the
7 situation, and that you have a claim by someone who
8 says, I'm the rightful owner, to restart maybe a due
9 diligence, a serious one, not a Google one, to have an
10 attorney maybe look at the chain of title, to go as
11 far as possible far back in time. You did not do
12 that, right?
13 A. We did not redo diligence. Again, no.
14 Q. Okay.
15 A. We stood by the diligence that we had done.
16 Q. Okay. And what you did not do either is to
17 actually go and see the Authorities and go see the
18 Attorney General's Office, right? You didn't do that
19 either?
20 A. Colombian Authorities scare me profusely.
21 Q. Do they?
22 A. They do.
[Page 537]
1 Q. You say that with a straight face when you
2 invest in Colombia, and you've been there for
3 15 years?
4 A. I'm saying that with a face of today, 2022,
5 understanding everything that's transpired in this
6 situation.
7 Q. For which you have no evidence, do you?
8 Do you, Mr. Seda?
9 A. I think we have a difference of opinion.
10 Q. Well, I'm looking at the facts and the
11 evidence on the record.
12 A. I have my testimony. I have the testimony
13 of Felipe López. I'm not sure what other evidence you
14 want--
15 Q. So, what you're saying is that you simply
16 will not raise the matter with the Attorney General's
17 Office, who is competent to determine when you have
18 somebody who says they're the rightful owner, to
19 determine if that is, indeed, a Claim that's valid.
20 You didn't deem it necessary? As a legal matter.
21 A. No. 1, La Palma Argentina advised me, the
22 land seller, that they approached the Attorney
[Page 538]
1 General's Office.
2 No. 2, Iván López Vanegas wrote a
3 tutela--which I don't know how to say tutela in
4 English--lengthy, large, and we responded, our counsel
5 responded in a fulsome manner to that tutela. I went
6 on national radio and told the entire world what was
7 going on. That this gentleman was extorting us. He
8 was trying to extort us. I don't know what else I
9 could have done beyond that to alert the whole nation
10 of Colombia about this. I don't know.
11 Q. Can you look at Paragraph 125 in the First
12 Statement. I'm jumping a couple of years. We're in
13 December 2016, still talking about Mr. López Vanegas
14 and at the end of the Paragraph 125, you say. "On
15 19 December 2016, I filed a formal complaint with the
16 Fiscalía reporting López Vanegas' extortion attempts
17 and his claims of influence over persons in the
18 Fiscalía."
19 That is C-181 that you refer to, your
20 complaint of 19 December 2016.
21 So, in fact, you do go to the Authorities,
22 right? And you know how to file a complaint, right?
[Page 539]
1 A. Yes, with context.
2 Q. 2014 is not context?
3 A. Is this not 2016?
4 Q. Yes, but 2014 is also the first time you
5 hear from Mr. López Vanegas.
6 A. Definitely not context with regards to this
7 situation.
8 Q. But my question is: You know how to make a
9 complaint, and you know how to go to the Colombian
10 Authorities when you feel that they need to hear about
11 extortion attempts, right? You know how to do that?
12 A. In actuality the Colombian Authorities had
13 come to me in this specific scenario.
14 Q. And you file a formal complaint to the same
15 Authorities that you did not trust? Is that what
16 you're saying?
17 A. Again, I believe this singular sentence
18 requires context for the Tribunal to understand
19 exactly what happened.
20 Q. Let's look at Paragraph 77 of your First
21 Statement. So, this is context, Mr. Seda, for you. I
22 quote: "Also I knew that López Vanegas' claim were
[Page 540]
1 false" now it's 2016, "and I believe Mosquera was part
2 of López Vanegas' scheme to extort us. I felt I had
3 the duty to inquire into the proof of evidence.
4 Mosquera claimed to have, in order to protect the
5 other investors, the Unit Buyers, the Project and
6 myself. Accordingly, on 3 May 2016, I told Mosquera
7 that I was available for a meeting."
8 So, after some back and forth you decide and
9 that here you refer to Exhibit C-157, right? And I
10 don't know if I have, but anyway, let me see if I have
11 it. Yes, Tab 40.
12 40. 4-0. Mr. Seda, Tab 40.
13 A. Yeah.
14 Q. So, the same shady person you decide to
15 meet--right?--and here you have this exchange of email
16 with Mr. Mosquera, his lawyer, and you say in your
17 testimony that you said that you were available for a
18 meeting. He responded abruptly a few hours later
19 stating that López Vanegas was no longer interested in
20 pursuing discussions with me, and that instead he
21 would proceed with his defense, right? This is the
22 context we're talking about, right?
[Page 541]
1 A. To clarify your statement, I didn't meet
2 with Iván López nor did I suggest to--
3 Q. Precisely. That would be my next question.
4 Did you meet with Mr. López Vanegas? You
5 did not?
6 A. No, did not.
7 Q. Following this email.
8 So, this email is 3 May 2016, right?
9 6 May 2016, Mr. Seda, is about a month after
10 the Fiscalía launched investigations against the
11 assets held by Mr. López Vanegas. Are you aware of
12 that?
13 A. I'm sorry, where are you reading from?
14 Q. I'm asking you a question.
15 A. Oh, I thought you were reading from--sorry.
16 What's the question?
17 Q. 6 May 2016, is about a month after the
18 Fiscalía launched investigations against assets held
19 by Mr. López Vanegas.
20 A. 6th of May?
21 Q. 2016.
22 PRESIDENT SACHS: 3 May, no?
[Page 542]
1 MS. BANIFATEMI: I'm sorry, 3 May. Thank
2 you, Mr. President.
3 THE WITNESS: Is about a month after and I'm
4 sorry apparently I got confused.
5 BY MS. BANIFATEMI:
6 Q. After the launch of the investigations by
7 the Attorney General's Office, let's look at it.
8 Maybe that will help you. That is C-153 in
9 Tab 41--44, I'm told. I'm sorry.
10 Are you with me?
11 A. Yes.
12 Q. So, this is a resolution No. 125, dated
13 8 May 2016, and you see in the English version, second
14 paragraph--what did I say? April, I'm sorry. 8
15 April 2016.
16 So, looking at the paragraph in the middle,
17 in English: (Reading.) In a report dated April 8,
18 2016, the Criminal Investigation Division of the
19 Superintendence of Notaries and Recordation--land
20 asked this Office--this National Office to assign a
21 filing number for an investigation into the assets
22 held by Iván López Vanegas, a member of the Envigado
[Page 543]
1 Cartel.
2 In view of the above, and taking into
3 account Meeting Minutes No. 35 dated 6 April, which
4 corroborate the pertinent presentation of the case by
5 the Criminal Investigation Division to the Internal
6 Working Group on information analysis, prioritization
7 and statistics led by the Director of the specialized
8 Attorney General's Office for asset forfeiture, at
9 which meeting the determination was made to assign a
10 filing number and priority to this investigation,
11 given that it involves a criminal organization--
12 REALTIME STENOGRAPHER: I'm sorry. This is
13 the Spanish Court Reporter. Can you read a little bit
14 slowly, please?
15 MS. BANIFATEMI: I'm sorry, yes.
16 BY MS. BANIFATEMI:
17 Q. At which meeting the determination was made
18 to assign a filing number and priority to this
19 investigation given that it involves a criminal
20 organization related to the Envigado Cartel.
21 Accordingly, the assigned prosecutor may attend to the
22 needs of the present investigation, given that it
[Page 544]
1 falls within the central subject matter of emerging
2 criminal organizations, and may therefore carry out
3 the pertinent actions related to the specific case and
4 may also report for this assignment in the month of
5 April.
6 That's signed by Ms. Ardila, and this is
7 the--Ms. Malagón, it's filed by Ms. Ardila, I'm sorry,
8 and signed by Ms. Malagón.
9 So, this is the launch of the investigation
10 against Mr. Iván López Vanegas, right? His assets;
11 right?
12 A. I don't know if this is the launch or the
13 reassignment. I'm not sure. I don't know.
14 Q. Okay. So, let's--I represent to you it's
15 the launch of the investigation; okay? From a legal
16 standpoint.
17 So, this is one month before your email
18 exchange with Mr. Mosquera to meet with Mr. Vanegas;
19 right?
20 A. Before Mr. Mosquera contacted us via email,
21 correct.
22 Q. And you referred to the tutela filed by
[Page 545]
1 Mr. López Vanegas. I would like to look at it now.
2 That's Tab 41, but I would need to complete it because
3 the version that I have in the binder is not the
4 complete Spanish version, so you will have--
5 MS. BANIFATEMI: And for the record,
6 Mr. President, there's--and you will be given also the
7 full document, so it bears 037bis, full document in
8 Spanish, which will be given to you now.
9 (Pause.)
10 MS. BANIFATEMI: Yes, I don't think it's the
11 complete version that you have, so now it will be
12 given to you, the complete version in Spanish. I will
13 wait for it to be given.
14 Thank you.
15 BY MS. BANIFATEMI:
16 Q. So, there's--what you're receiving is one
17 complete file in Spanish version and two
18 interpretations, two translations into English, one by
19 the Claimants, the other by the Respondents. They
20 correspond to different sections, to different parts.
21 So, the one that is provided by the Claimants is the
22 one that start with SP-0001 and continues with 0017.
[Page 546]
1 And the one by the Respondent is SP-001, and
2 then the next page is 49.
3 So, the tutela is essentially a measure of
4 protection--right?--as you understand it. Or if you
5 don't want to--
6 (Overlapping speakers.)
7 Q. If it's legal and if you're not comfortable,
8 I'm more than happy to--
9 A. It looks like something that-and I'm giving
10 you a very general understanding of how I understand
11 it, like, to protect constitutional rights like that
12 are-- Again, I'm not an attorney. I don't know. More
13 or less, like, to protect, like, some right that may
14 be taken from you very quickly or that needs to be
15 remedied quickly.
16 Q. You raise the tutelas. Are you familiar
17 with it, with the tutela of Mr. López Vanegas?
18 A. I reviewed it, I mean, it was a big
19 document, but in general--well, my attorneys handled
20 it for the most part.
21 Q. You reviewed it at the time, or did you
22 review it in the context of the Arbitration?
[Page 547]
1 A. No, more so after the fact. It was a huge
2 document. I think the response time was something,
3 like, just a few days.
4 Q. So--so, the date is 6th of May 2016, right?
5 So, the exchange you have with Mr. Mosquera is 3 May,
6 correct? We just saw it.
7 A. I mean, I'm trying to remember. We're
8 talking about literally a difference of a day or two,
9 if you could bring up the email again.
10 Q. The email is C-157, which is Tab 40.
11 A. Sorry.
12 Q. You can look at the top.
13 A. This is the date that Victor Mosquera
14 emailed us?
15 Q. Yes.
16 A. Okay.
17 Q. And in your testimony at Paragraph 77,
18 that's what you explain probably why you did not meet
19 him. You say that López Vanegas was no longer
20 interested in pursuing discussions, and instead on
21 López Vanegas' instruction Mosquera would proceed with
22 his defense.
[Page 548]
1 So, presumably this is the tutela we're
2 talking about, because this is three days later, 6th
3 of May--right?--presumably.
4 A. Are you saying 6th of May was the date of
5 the tutela or the date of--
6 Q. It's the date it's submitted--right?--filed.
7 A. I don't know. My recollection is I did not
8 respond to Victor Mosquera's email until after the
9 tutela. That's my recollection. I don't know the
10 exact date but I'm happy to review.
11 Q. Okay. The dates are in the documents.
12 A. Yeah.
13 Q. It's not a big issue anyway, so I'm just
14 trying to establish the chronology.
15 So, if you look at the Spanish version, and
16 it's probably the best, because you read Spanish and
17 it's the most complete version. So, if you look
18 at--and since you have seen it before, Page 18,
19 SP-0018, in the Spanish version.
20 A. I'm sorry, where are we--what are we looking
21 at?
22 Q. SP-0018 of the Spanish version of the
[Page 549]
1 tutela, which is just handed to you.
2 A. This document?
3 Q. I don't know, if you put it in the binder--
4 A. I didn't put it in the binder. Apologies.
5 SP-0018?
6 Q. 18, one-eight.
7 A. All right.
8 Q. So, you see that here he starts discussing
9 the actual case, right? He describes himself, you see
10 on the next page at Paragraph 67 he refers to 1995,
11 the Year 1995, and he describes what happened then.
12 If you go to the next page, Paragraph 68, that's where
13 he discusses the consolidation of the parcels. We
14 discussed that yesterday.
15 Moving to the next page, Paragraph 73, we
16 discussed that earlier, that's the renaming of
17 Sierralta López Compañía to Inversiones Nueve. He
18 discusses that. And then if we go a bit further, Page
19 SP-0036, that's where he discusses the system of
20 financing of the "Envigado"--right?--"crimen
21 organizado," and here he discusses the facts.
22 If you go to Page SP-0039, you see that here
[Page 550]
1 there is a recording of a conversation with
2 Mr. Arboleda, this is the mango seller, the frontman
3 for the property that's obtained by Mr. López Vanegas
4 through a private investigator.
5 [Redacted]
6 [Redacted]
7 [Redacted]
8 page, SP-0057, these are the annexes and exhibits and
9 you see that there's a number of deeds he provides:
10 Escritura, Exhibit 7, 8, 9, 10, et cetera.
11 [Redacted]
12 [Redacted]
13 [Redacted]
14 [Redacted]
15 [Redacted]
16 [Redacted]
17 [Redacted]
18 what is submitted to the Attorney General's Office-
19 right?-and this is 6 May.
20 You've read this document before-right?-so
21 you're familiar with it.
22 A. I've reviewed this document in general. I'm
[Page 551]
1 not sure what you're asking me to take at fact the
2 testimony of, as you've proclaimed it, a known
3 drug-trafficker who says that he's never
4 drug-trafficked before, that he's a simple businessman
5 and an abiding citizen who has been wrongly prosecuted
6 and has never done drug-trafficking before. You're
7 asking me to take his written statement and take it as
8 fact? I don't know what you're asking.
9 Q. No, I'm not asking you to testify to his
10 facts at all. I'm asking you, first of all, if you're
11 aware of this, and what you see is that when he files
12 with the Courts his tutela, he's describing very
13 specific facts about the chain of property in relation
14 to what is now the Meritage, right? That's what you
15 see in the documents.
16 A. He's describing--first off, to be clear, I
17 don't know this document in depth, okay? There have
18 been so many documents in this case, it's insane.
19 With regards to what he's describing, he's
20 describing a narrated story of individuals who are not
21 on Title.
22 [Redacted]
[Page 552]
1 [Redacted]
2 [Redacted]
3 [Redacted]
4 [Redacted]
5 [Redacted]
6 So, I'm not sure what you want me to get out
7 of this document.
8 Q. I'm trying to establish facts, Mr. Seda.
9 A. You're trying to establish what?
10 Q. Facts.
11 So, if we look at--
12 A. I don't take these as facts, that's for
13 sure.
14 Q. Well, it's a fact that a tutela was filed
15 with the Courts in May 2016--right?--that's a fact.
16 A. That is a fact.
17 Q. This document is a fact.
18 A. The fact it exists, correct.
19 Q. And that the Courts were then seized of this
20 matter, and that the Attorney General would become
21 aware of the substance in this tutela that's also a
22 fact, right? As of then, it's all out.
[Page 553]
1 A. My--Yes. I believe this tutela after the
2 fact the Judge made the determination that he was not
3 going to stop construction, was not going to revoke
4 our construction license, was not going to take the
5 property from us.
6 And I believe--I don't want to
7 mischaracterize this--he said Fiscalía, I turn this
8 over to you, and do what you guys are going to do with
9 it, but do something quickly.
10 Q. Who? Mr. López Vanegas?
11 A. The Judge.
12 Q. The Judge turns over what to whom?
13 A. I believe his determination at the end of
14 this was I'm not, with regards to the request of the
15 tutela, of Victor Mosquera, the attorney acting on
16 behalf of Iván López, the requests were to cease
17 construction, revoke the construction license and take
18 the property from the existing titleholders or
19 property holders and give it back to Mr. López. He
20 denied, Number 1 and Number 2 and Number 3, and he
21 took--from my recollection of this, my very, let's
22 say, high level recollection of this--and he referred
[Page 554]
1 it to the Fiscalía and said, here, look at this.
2 Q. And, as we saw, the investigation had been
3 launched a month before; right?
4 A. I can't confirm if it's been--I don't know
5 that level of detail into the investigations and when
6 exactly, and--I don't know.
7 [Redacted]
8 [Redacted]
9 [Redacted]
10 [Redacted]
11 [Redacted]
12 [Redacted]
13 A. What--what is the point of your question? I
14 don't understand. Q. That's my question, it
15 would not have started if they were so friendly to
16 Mr. López Vanegas. If they wanted to help Mr. López
17 Vanegas, no investigation into the assets would ever
18 have started, isn't that correct, Mr. Seda?
19 A. I think we have a difference of opinion on
20 how the Fiscalía works.
21 Q. That's a fact, Mr. Seda. Investigations
22 were started against the assets of Mr. López Vanegas.
[Page 555]
1 "Yes" or "no"? You saw the documents.
2 A. I think that what we discussed is they were
3 looking into this particular asset based on the fact
4 of a trumped-up kidnapping story, not because he was
5 this drug-trafficker. I mean, I think we read the
6 Determination of the Claim yesterday, and it said very
7 clearly, they started this investigation because of a
8 kidnapping, a kidnapping that the Fiscalía, the U.S.
9 Government and many individuals have all said is
10 simply false.
11 Q. And because Mr. López Vanegas made a lot of
12 noise about this property being his, right? So, when
13 prosecutors are confronted with claims, they have--
14 they are duty-bound to look at those claims,
15 especially if those Claims come from somebody who is
16 associated with the cartel, correct?
17 A. I--I--I don't know exactly how the Fiscalía
18 works.
19 Q. So, you don't know. You cannot assume. You
20 don't know. You can say you don't know.
21 A. Again, I think that we have a difference of
22 opinion on why this investigation was started, on what
[Page 556]
1 the purpose of starting the investigation was and what
2 the outcome that the individuals that were involved in
3 this, including individuals from the Fiscalía, what
4 they expected.
5 Q. And again, the chronology is not in your
6 favor, is it? Mr. López Vanegas makes a lot of noise
7 from February, and that's in his tutela, from February
8 to April, he brings up new facts, new elements with
9 deeds that he apparently can find, if your lawyers
10 cannot find, his can find them. He brings that to the
11 Courts, he brings that to the Fiscalía, and on that
12 basis, the prosecutors are duty-bound to have a look,
13 and they do that exactly on 8 April they start
14 investigations into the assets of Mr. López Vanegas.
15 That has nothing to do with cahoots because then that
16 is not even before he has filed his tutela, so they
17 start, if they were so friendly to Mr. López Vanegas,
18 they would never have started investigations; correct?
19 A. I think the chronological order for the
20 timing of things speaks for itself, very clearly.
21 Very clearly. And why they would start this is
22 because this would be a tremendous lever of pressure
[Page 557]
1 against a developer like me.
2 Q. And what is exactly the interest of the
3 Fiscalía in doing that? They're investigating the
4 cartel. They're duty-bound, when somebody says that
5 this is a chain of property belonging from A to Z to
6 cartel people, they're duty-bound to investigate that
7 that's exactly what they do. What does that have to
8 do with you? If you are--if you find yourself in that
9 context because you have bought that piece, then the
10 natural thing would precisely to go to the Fiscalía
11 and say I'm a without-fault buyer. You didn't do
12 that, did you?
13 A. I think you have to understand the context
14 in which the Fiscalía has been an organization which
15 has been riddled with corruption, and I don't want to
16 mis--misspeak. I think we have an article on record
17 where the Attorney General himself says above
18 drug-trafficking, the number one issue that we have in
19 Colombia--this is said by two Attorney Generals, both
20 Nestor Humberto Martínez who was the acting Attorney
21 General at the time that this all happened, and
22 Barbosa who's the next Attorney General. He says,
[Page 558]
1 above drug-trafficking the number one issue that we
2 have in Colombia is corruption, particularly in our
3 public institutions.
4 So, I mean, he started a special Task Force
5 just to combat corruption within the Fiscalía. To
6 pretend that the fiscals are not doing these things
7 is--I mean, do you know what the DNE is, the
8 Departamento Nacional de (unclear, in Spanish)?
9 Q. If the Fiscalía is looking into any
10 wrongdoing or allegations of wrongdoing, they are
11 doing their job, aren't they?
12 A. If they are looking--I'm sorry, I'm just
13 going to repeat this. If they're looking into
14 allegations of...
15 Q. Wrongdoing.
16 A. Wrongdoing, then they're doing their job.
17 With a lens that they're not acting in an improper
18 manner, then yes, I would agree with you.
19 Q. So, you cannot say the entirety, the
20 universe of the Fiscalía and entire Colombia these are
21 corrupt people and, therefore, that entitles you to
22 not do anything, to not preserve your rights and not
[Page 559]
1 to abide by the law, which is that if you want to
2 establish that you're a good-faith buyer, you have to
3 play by the rules, and you have to go to the Fiscalía
4 and raise the matter with them. Otherwise, you run
5 the risk that there will be an investigation into the
6 chain of property by the cartel, and that concerns
7 your property.
8 A. I definitely don't think that everyone in
9 the Fiscalía are corrupt. God, I hope not. I hope
10 not, for the country's sake.
11 Again, as I've stated many times, I felt
12 that we made everyone who we could make aware, aware
13 of the situation. We responded to legal claims
14 against us, we went on national radio. We talked to
15 the fiduciary.
16 We--I mean, I honestly don't know what else
17 we could have done.
18 Q. Isn't it what you did, Mr. Seda, that you
19 actually rushed into making sure that the buyers are
20 comforted and you start the construction in 2015
21 because you just wanted to start construction? And
22 that was your risk, starting construction rather than
[Page 560]
1 making sure that you actually look into this with the
2 Fiscalía and make sure that what you say is your
3 property is taintless and cannot be taken away because
4 it is a chain of property by the cartel?
5 A. If you characterize going on national radio
6 and then waiting a year to start construction as
7 rushing into things, I think we have a difference of
8 opinion on that as well.
9 Q. Well, you did say earlier that you rushed
10 into continuing to sell and to prepare for the
11 construction. So, you didn't stop your business. You
12 just continued as normal.
13 A. I never said the word rushed into. I
14 promise you that.
15 Q. Yes, you said not rushed but you said "I
16 continued business as normal."
17 Is that normal, Mr. López Vanegas coming to
18 you and extorting you, is that normal?
19 A. Well, to clarify what I said to you was, we
20 did an analysis. We talked to the fiduciary. We
21 looked at the world of information that we had. Went
22 on national radio, and then, and only after then,
[Page 561]
1 after we made clear and transparent to everyone that
2 there was, we opened our doors. We received emails,
3 we sent out emails, I believe we sent out--and I hope
4 I'm not misspeaking--I believe we sent out or one of
5 our staff sent out a blanket email to all the unit
6 buyers with a copy of the title search and a copy of
7 the Fiscalía's Report.
8 Then after that, I sat down, I want to say
9 with at least at a minimum, 85 to 90 percent of all
10 the Unit Buyers. And we had hundreds of Unit Buyers.
11 This was--it was an undertaking that I have never done
12 on any project before. I sat down with every single
13 person, and I went through all the documents with
14 them, and I gave them copies of the documents. I
15 don't know what else we could have done.
16 Q. You gave them copies of a study, title
17 study, that was incomplete, and of a response to a
18 limited query, which was also incomplete, right? And
19 then at the very latest, with the tutela, you--which
20 it's public, so you should know, it's Mr. López
21 Vanegas bringing up a number of facts and
22 circumstances with evidence, and he actually refers to
[Page 562]
1 Deed 1554. That's at Page SP-0019 of the Spanish
2 version. And that is the one that was picked up by
3 Corficolombiana's lawyers.
4 So, you if had asked someone to look into
5 that again, you would see that there is a problem at
6 the very least, correct?
7 A. Are you stipulating that if we had found
8 that one individual thing and run Mr. Iván López
9 Vanegas' name through OFAC and the UN sanctions list
10 and INTERPOL lists and every other list that there is,
11 that we would have found something? I don't agree. I
12 believe a world of people have done this analysis that
13 you're talking about, and not a single one--please let
14 me finish--not a single one has ever found, including
15 a myriad of financial institutions, fiduciaries,
16 government agencies. No one has ever found an issue
17 with Mr. López.
18 This is my personal opinion. I'm not a
19 professional, a title-search professional, but I think
20 you're mischaracterizing--
21 Q. Mr. López Vanegas has found them, right? On
22 the last page you have the exhibits.
[Page 563]
1 Mr. Lopera. Mr. Lopera, who you referred to
2 in your statement, the lawyer for Mr. López Vanegas.
3 Oh, I'm sorry, yes.
4 (Pause.)
5 MS. BANIFATEMI: Sorry for that. I was not
6 finding the reference.
7 So, this is Paragraph 7, which we saw
8 earlier, so when you asked your lawyer Mr. Lopera to
9 conduct an internal search which is when it showed up
10 that he's a drug-trafficker.
11 So, the very basic Google search shows who
12 he is, right?
13 A. I'm not sure exactly what Mr. Lopera did to
14 find--I don't know how much time he spent. I don't
15 know if he spent an hour, two hours, 10 hours taking
16 the information given to find this individual.
17 I don't know. I don't know.
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[Page 568]
1 BY MS. BANIFATEMI
2 Q. There are closure orders, Mr. Seda, that
3 your lawyers have refused to have on record; okay? So
4 now if we can go back to this document--
5 MR. MOLOO: Mr. President, with respect to
6 that, we haven't reviewed the 2000 pages from last
7 week, so it's not that we refused a specific document.
8 I just want to be clear about that.
9 PRESIDENT SACHS: Let's proceed.
10 BY MS. BANIFATEMI:
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[Page 569]
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20 Now, I would like to go back to--actually,
21 no, it's a new document that is Exhibit C-33bis. This
22 is on Tab 18.
[Page 570]
1 A. I'm sorry, Tab 18?
2 Q. 18. Yes, one-eight.
3 You have it?
4 A. I do, thank you.
5 Q. So, this is a petition response from
6 Corficolombiana to Newport, dated 26 July 2017. Are
7 you familiar with this document, Mr. Seda? It's
8 addressed to you.
9 The answer is yes, Mr. Seda?
10 A. I just need a little time. I'm not--
11 Q. It's addressed to you. Are you familiar
12 with it or are you not?
13 A. I don't remember every single document ever
14 sent to me, no.
15 Q. This is an important one.
16 A. My memory is limited. Would you like me to
17 read it?
18 Q. For the record, I will say what this is.
19 So, this is Corficolombiana responding to your request
20 for information. And I'm interested at in the English
21 version, SP-0004.
22 So, reading for the record, in the
[Page 571]
1 particular case of establishing trusts related to the
2 Meritage Project, it is important to note that it was
3 not Fiduciaria, but the trust or Newport which
4 directly negotiated the acquisition of the Project's
5 plots with the company La Palma Argentina, without
6 intervention by Fiduciaria in said Pre-Contractual
7 stage. Nor must we lose sight that, according to
8 Decree 1023 of 2012 and external circular letter of
9 February 19, 2014, of the Superintendence of
10 Companies, non-financial companies operating in
11 Colombia are required to design and implement an
12 adequate internal system of self-control and risk
13 management LA/FT, which includes but is not limited to
14 due diligence in the knowledge of customers or
15 counterparts. In this regard for establishing trusts
16 related to the Meritage Project, the applicable
17 financial legislation does not contemplate the
18 obligation for the Trustee (Fiduciaria) to have any
19 type of approval issued by the Compliance Officer of
20 the entity, but rather to comply with each of the
21 aforementioned obligations set forth in Part 1, title
22 four, Chapter 4, et cetera, of the basic legal
[Page 572]
1 circular letter of the financial Superintendence of
2 Colombia obligations that were fulfilled by the
3 Trustee.
4 For the reasons stated, the approval that
5 you request to receive at this point does not exist.
6 So, that's three important points. The
7 first is that they referred to the negotiation for the
8 acquisition of the property with La Palma having been
9 done without their intervention, and they say that
10 Newport has to comply with, you see in the first
11 paragraph, design and implement an adequate internal
12 system of self-control and risk management, right?
13 A. I see the paragraph, yes.
14 Q. Do you remember reading this at the time?
15 A. To be honest with you completely, no. But I
16 understand what it says.
17 Q. So, what it says is that they will not
18 approve, and that the Responsible Party for checking
19 the identity of the contracted counter-party is
20 Newport and not Corficolombiana. That's what this
21 says, right?
22 A. It says a lot of legal terms, to be
[Page 573]
1 completely honest with you.
2 Q. Do you understand?
3 A. More or less.
4 Q. Required to design and implement an adequate
5 internal system of self-control and risk management?
6 Do you understand that?
7 A. I do understand that. I don't agree with
8 it. I do understand it.
9 Q. That's what Corficolombiana, your fiduciary
10 tells you. You like to rely on them, so here this is
11 what they say to you. It's not my responsibility,
12 it's yours.
13 A. So, what is the question?
14 Q. That's my question: That you rely on them
15 the rest of the time but when they say "it's not my
16 responsibility, it's yours," you choose to just ignore
17 it?
18 A. I'm not ignoring that. I would be taking
19 advice of counsel in the sense that what one has to do
20 for regulated and non-regulated entities, and then if
21 you are--I think it's--supervised or not supervised,
22 and if you become regulated, you have more than
[Page 574]
1 160,000 minimal salaries.
2 And we looked at this, and our counsel came
3 to the conclusion that we are not regulated or
4 supervised entities. And we don't have to--
5 Q. Did you show this--
6 (Overlapping speakers.)
7 Q. Did you show this to your lawyers when you
8 received this, since you say it's legal?
9 A. I give all my documents--
10 What attorneys are we talking about?
11 Q. Your in-house lawyers. I don't know.
12 A. I mean, I give all my documents to my
13 attorney. Most of the documents, every document that
14 comes through our office.
15 Q. So they could read this and understand that
16 it's a legal obligation for Newport to do due
17 diligence and to implement an adequate internal system
18 of self-control and risk management, right?
19 A. So, we have reviewed this, and the response
20 that came back from counsel was we do not, at that
21 period of time of 2014 and/or 2015, I believe, because
22 we didn't meet the thresholds, so Newport was not
[Page 575]
managing more than 160,000 minimum monthly salaries per month, and so we didn't meet it. That was the advice of counsel. You do not have to. They are simply wrong.
Q. So, essentially Corficolombiana is telling you we're not doing this, we're not responsible. It's your responsibility, so they probably know what they're talking about. And this is a legal requirement, and you choose not to do anything, even assuming that, under your interpretation, you don't have to. Nobody does any diligence, then on that basis?
A. That's not what I'm saying. You're mischaracterizing what I'm saying. What I'm telling you is, you're asking, do you have to do this? Do you have to implement this? Is that what you're asking? Maybe I'm answering a question I don't even have to answer.
Q. No, I'm not asking you--
A. Okay.
Q. --I'm telling you Corficolombiana tells you it's not their obligation, so they will not have an
[Page 576]
approval, because they don't have an obligation. It's your obligation by law.
A. Well, let me finish reading the paragraphs, the previous paragraph and the paragraph thereafter, and then maybe it will help me get context and understand exactly what they're saying. I don't view it the way you're viewing it. If you want me to read it, I can read it and tell you what my opinion is on it.
Q. I read what Corficolombiana told you, that's all, and I'm asking you did you actually do something about it?
A. Did I do something about what?
Q. What they tell you about your obligation, Newport's obligation.
A. Yes.
Q. -But you said that it was not--
(Overlapping speakers.)
A. Yes, yes, we... we talked to counsel. Hold on. You're asking me to answer a question, you're asking me if I did something with regards to this, and I'm trying to answer that. So, what I'm answering to you
[Page 577]
is we conferred with counsel, and counsel said this doesn't apply to you. You do not meet the minimum threshold, you didn't have to do it. It's not the situation.
Q. So, what did you do then? Did you go to Corficolombiana and say I don't agree?
A. We can discuss counsel conversations? I'm--
Q. No. I'm asking what you said, Newport says to Corficolombiana as a result. If you don't agree with the interpretation, what did you do? You just leave it there? Corficolombiana is telling you it's not my responsibility, it's yours, by law. You determine it's not your responsibility. On that basis, do you go back to Corficolombiana and say I don't agree with your interpretation?
A. What we were doing was simply having Corficolombiana and asking them, I believe--hold on. In order to even tell you I need to read the letter to understand.
Q. I'm sorry?
A. In order to tell you what we were trying to do--because I'm reading a response to you. Do you
[Page 578]
have our original letter?
(Overlapping speakers.)
Q. I told you, you should always take the time to read if you need to read. Go ahead.
A. Can you give us our original letter to this? Do you have it?
Q. It must be there. As usual, after the colored paper.
A. I don't see it. Can you refer me to where it is?
Q. We're checking if there's a Spanish. You don't have anything in the binder?
A. I mean, there's a lot of documents here. I just like--faster for you, faster for me.
(Pause.)
Q. You just need to turn the page, Mr. Seda.
A. Thanks.
Again, this is a response. I would like the communication that we are asking--you said we wrote to Corficolombiana, and this is their response, right?
Q. Yes.
A. This is also from Corficolombiana to us, so
[Page 579]
that wouldn't be the letter.
Q. This is Corficolombiana's response to you, yes.
A. Sorry.
Q. This is what we have been talking since five minutes ago.
A. What I'm asking about--
PRESIDENT SACHS: Mr. Seda wanted to see the letter to which this letter replies.
BY MS. BANIFATEMI
Q. You would like to see your petition of 4 July.
A. I would like to have context and understand what we were asking for and what they're replying to. It's hard for me to respond if I don't have that context.
Q. We're looking if it's on the record.
(Pause.)
Q. So, apparently it was not filed by your lawyers, so we don't have it on the record.
A. Then taking that into consideration, I
[Page 580]
apologize, but I just would like to read the entire letter to understand it, is that okay?
Q. Yeah.
A. Thank you.
(Witness reviews document.)
A. And this helps considerably. One more second.
(Witness reviews document.)
A. Okay. Would you like me to answer?
Q. Yes, please.
A. Okay, so what I understand from this letter is, without seeing the letter that we sent them, it seems like we were asking for some sort of concept or opinion; and, from my reading of this letter, what it says is we did, we'll tell you with regards to these transactions we did all of these studies, we did all of these things. We followed our internal SARLAFT system--(in Spanish)--sorry, sorry, if you could put the English version back up, please? And go to SP-0002. If you could go a little further down the page.
And they're saying it's in compliance and
[Page 581]
they've done all these things and they've gotten all these studies and they're basically saying that these are all the things that made us comfortable with the deal.
But then it seems like they're getting very narrow, and they're basically saying, you know--
(Witness reviews document.)
A. So, it says they're not issuing a concept. It doesn't say they didn't do the due diligence or didn't--I don't see where it says they didn't study the counter-party.
Q. If you look at the passage that I read, which is Page 4.
A. Yeah.
Q. They're simply saying that it is for Newport, who is the direct negotiator with La Palma, without intervention by Corficolombiana, no?
A. You're mischaracterizing--I'm sorry.
Q. I'm not mischaracterize anything, Mr. Seda. This says that Newport has an obligation by law, right?
A. It's saying we didn't do the deal with La
[Page 582]
Palma, you did. However, nor must we lose sight that according to Decree 1023 of 2012, and external circular, Superintendence of Companies, non-financial companies--so, one is not contingent on the other.
I'm not going to try to be an attorney here and say exactly what this--
Q. Right.
A. --means, but the way I understand it, you're asking my opinion. My opinion is it simply saying (a) we didn't do the deal with La Palma. You negotiated it, let's be clear there. And second, corporations of this who are regulated by this must have a SARLAFT system. I mean, those are --One doesn't require the other.
Q. What it says is that they will not give you any type of approval issued by the Compliance Officer of the entity and they conclude that the approval that you request does not exist, and they say that the requirement is the requirement on the Company itself, Newport.
A. Where exactly are you reading from?
Q. The two paragraphs that you have.
[Page 583]
A. Okay. When you say "doesn't exist."
Q. At the end, the last--last sentence.
A. Of the last paragraph? Okay.
(Witness reviews document.)
A. Yeah, they're saying the concept. They're saying you're asking for a legal opinion, a concept, and they're basically saying we're not going to give you a legal opinion, a concept.
Q. Why do you say "concept"? It says the approval that you request to receive does not exist.
PRESIDENT SACHS: It's difficult to further go on with this because we do not have the letter of the 4th of July, so I think if we had the letter, the answer will be clearer.
MS. BANIFATEMI: Which I do not have because it's not on the record.
PRESIDENT SACHS: Yes, so it is not so helpful to go on with this.
MS. BANIFATEMI: I'm happy to move on, Mr. President.
PRESIDENT SACHS: Yes, please, but let's have the afternoon break, then, and resume at 3:48,
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(Recess.)
PRESIDENT SACHS: So we are ready to proceed.
MS. BANIFATEMI: Thank you, Mr. President.
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[Redacted] And, of course, Ms. Noguera. You refer a lot to Ms. Noguera, so that's in Paragraph 28. And at Paragraph 28, that, I understand, is the first meeting with Ms. Noguera--right?--in December 2019.
A. That is correct.
Q. And if I look at 29, Paragraph 29, you say that you did not record that first meeting, [Redacted]
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A. That is correct.
Q. So, let's look at your Second Statement now at Paragraph 30.
I'm sorry, we're there.
So, this is the meeting we're talking about.
I'm sorry.
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PRESIDENT SACHS: Please proceed.
BY MS. BANIFATEMI:
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Q. Now, if we can look at Exhibit C-24, that's Tab 28. 24bis, yes. Thank you.
Tab 28, Mr. President.
That's from the Attorney General's Office, Asset Forfeiture Unit, it's a petition to Asset Forfeiture Court, dated 5 April 2017. And you see here, on the bottom of the first page, the Requerimiento, and then you see on the second page identification on top, identification and place for notifying the impacted parties and intervening persons and (1) there is a reference to Ms. Gladys Lucía Sánchez Barreto, Legal Representative of Sociedad Newport.
I'm sorry, that's Page 151 of the document of C-24bis, as you see on the screen.
So, you see that, in 2017, on 5 April, the
[Page 614]
Fiscalía actually recommends that Newport be admitted as an affected party, right?
A. Yeah--I don't know how to translate this in legal terms. I don't know if this means that they're recommending that these people are to be third parties. I don't know if it's saying these are individuals who are trying to become third parties. I couldn't give you a perspective on this. I just--I'm not well-versed enough.
Q. It says--can we look at the Spanish version? And you have it in the binder.
A. Oh.
Q. As usual. "Identification and place". (In Spanish).
A. Where would it be located?
Q. As every time, after the pink page.
A. Thank you.
Q. Identification and place of notification of the affected parties. (In Spanish).
Do you see that? So, it's a list with Newport on top, identified by the Fiscalía as "afectados".
[Page 615]
1 A. Just give me one minute to read it,
2 apologies.
3 Q. Yes, I'm just setting out the stage, and
4 then you can read.
5 MR. MOLOO: Mr. President, I think the last
6 word is important, I don't speak Spanish, but it's not
7 just affected parties. It's "and intervenors."
8 A.. So, with regards to this reading, now the
9 Spanish version--sorry, switching to Spanish now,
10 identification and place of notice served to the
11 affected parties and intervening parties.
12 Again, I'm not an attorney, an EDD attorney.
13 I don't know exactly what this means, but my
14 interpretation of it would be people who they think
15 are affected parties and people--and/or people that
16 want to be recognized, not necessarily they're saying
17 they are recognized as afectados.
18 BY MS. BANIFATEMI
19 Q. I'm trying--since I didn't hear him, I'm
20 looking at the transcript to see what you said.
21 It's a recommendation, is it, it's a
22 recommendation to the court, right?
[Page 616]
1 A. I can't--again, you're asking me legal
2 advice. I can't tell you what the--what would you
3 call it?--the interpretation of this from a legal
4 perspective--
5 Q. No, I'm asking you the very simple question,
6 and the rest can be done by your attorneys, as legal
7 matter, and so can we, and--but I can just say for the
8 Tribunal's clarification, intervening persons as per
9 the law, as to the Asset Forfeiture Law, concerns what
10 you have in three and four, the Attorney General's
11 Office and the Ministry of Justice, so these are the
12 intervening parties. And then, the actual affectados
13 would be here Newport and Corficolombiana.
14 PRESIDENT SACHS: That makes sense, yes,
15 but--
16 (Overlapping speakers.)
17 BY MS. BANIFATEMI:
18 Q. This is the recommendation--of the
19 Prosecutors. So, my question is very simple, not
20 getting into legalese: Are you aware that, in
21 April 2017, the Prosecutor recommended that Newport be
22 admitted as an affected party? "Yes" or "no."
[Page 617]
1 A. Again, I'm looking at--I understand the
2 document--
3 Q. Were you aware, at the time, Mr. Seda?
4 A. Was I aware of this document?
5 Q. Were you aware at the time--somebody told
6 you--"yes" or "no"--
7 A. No one--
8 Q. --that there was a recommendation that you
9 be admitted as an affected party?
10 A. No, no one has ever told me that the
11 Fiscalía recommended us to be an affected party.
12 Never.
13 MS. BANIFATEMI: And, Mr. President, just a
14 point of reference, it's Article 31 of the Law on
15 Asset Forfeiture Proceedings of intervening parties.
16 BY MS. BANIFATEMI:
17 Q. Then, if we can look at Exhibit C 436.
18 You're familiar with this, of course, your
19 lawyers--Tab 29--your lawyers extensively argued this
20 document yesterday. This is the Decision of
21 22 April 2022, by the Superior Court of Judicial
22 District of Bogotá admitting Newport as an affected
[Page 618]
1 party. That you're familiar with, right?
2 A. I'm familiar with the generality of this
3 document. I've read it, yeah.
4 Q. And when you say in your First Statement,
5 Paragraph 82, in a different context, admittedly, this
6 is in the context of López Vanegas, I would never pay
7 a bribe. I was confident that the Colombian Judicial
8 System and Authorities would reach the right
9 conclusion.
10 So, you were right in being confident,
11 right? Because the Bogotá Court has admitted you as
12 an affected party now.
13 A. Well, I'm saying that in the context--
14 Q. I did say it in a different context. I'm
15 just taking your statement that you're confident in
16 the Colombian Courts?
17 A. You haven't let me finish.
18 I'm saying that in the context, and we had
19 controls of legality out there. I'm saying this is in
20 the judicial system, not the court system, that the
21 Colombian Judicial System, and it's also referring to
22 the Fis--principally referring to the Fiscalía. I
[Page 619]
1 felt that the judicial system in speaking about the
2 Fiscalía, you know, was not going to--you know, it was
3 not going to come against us.
4 Q. The judicial system includes the Fiscalía,
5 right?
6 A. It does.
7 Q. Yeah.
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15 A. I'm sorry? Again, I don't--I can't contest
16 that this document is them saying, the Fiscalía is
17 saying or the Prosecutor saying that we should be
18 affected parties. I mean, you're asking me to come to
19 a legal conclusion. I just--I don't know.
20 Q. Let's say it differently. I will present it
21 to you that this is a document where the Prosecutor
22 recommends that Newport be admitted as an affected
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7 this means, isn't it?
8 A. I don't know.
9 Q. So now, let's look at your Third Statement,
10 Paragraph 2.
11 You referred to this--this is a--this is an
12 important paragraph. I want to spend some time on it.
13 A. Okay.
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18 BY MS. BANIFATEMI:
19 Q. So, I would like now to go to your First
20 Statement, Mr. Seda, at Paragraph 104.
21 A. Paragraph 104?
22 Q. Yes.
[Page 633]
1 This concerns your different approaches and
2 discussions with the U.S. Authorities. So, here you
3 say it's in relation still to Mr. López Vanegas, and
4 you say, I quote: "I was particularly concerned at
5 the apparent fact that corrupt actors in the Fiscalía
6 were complicit in López Vanegas' extortion and were in
7 fact extorting me themselves. Not knowing whom to
8 trust, I sent a desperate plea for help to the U.S.
9 Embassy and traveled to Bogota to meet with an Embassy
10 official on 6 September 2016."
11 And here you refer to two pieces of
12 evidence, C-171 and 172. These are essentially--we
13 can have a look at them. These are--I don't have any
14 particular question. I just want to, if you want to
15 see them, we can see them, C-171. That's Tab 31.
16 If you look at Tab 31, you see that there's
17 an email from you to the U.S. Embassy, and then on top
18 starting with the Page 1, they tell you "the American
19 Citizen Services Unit at the U.S. Embassy Bogotá is
20 available to meet with you on Tuesday morning
21 September 6th." So, this is the meeting that you
22 discuss at Paragraph 104, right? Yes, Mr. Seda?
[Page 634]
1 A. Correct.
2 Q. And you did meet with someone at the
3 Embassy, right?
4 A. Yes.
5 Q. Then if we go a bit further down, I'm
6 looking at it chronologically, so still statement one,
7 Paragraph 116, now we are in October 20, October 2016.
8 You say that: "On that day, Mr. Michael
9 Burdick, the Federal Bureau of Investigation, Legal
10 Attaché at the U.S. Embassy, requested that I meet
11 with him. I agreed, and in an effort to gather
12 evidence of the extortion which I had been subjected
13 to turn over to him. I contacted Mosquera to arrange
14 for another meeting."
15 And here we can have a look at the document
16 that you reference here. That's C-179. That's 33,
17 Tab 33. It's a very brief exchange with Mr. Burdick,
18 where he--well, you say first that you spoke with his
19 colleagues at the Embassy concerning the meeting--I'm
20 sorry, he says to you: "I spoke with my colleagues at
21 the Embassy concerning the meeting you had with them.
22 I would like to meet with you." And then further up,
[Page 635]
1 he says: "I will be in Medellín on December 13th.
2 Please advise if you have time to meet." I understand
3 that you did not meet Mr. Burdick, right?
4 A. No. He never--he didn't follow up for the
5 meeting.
6 Q. Then still going ahead in time, on
7 29 November 2016, that's Exhibit C-178, Tab 34, that's
8 a letter from Richard Walsh, the General Consul of the
9 U.S. Embassy in Colombia, and essentially he--he's
10 picking up on your complaints, and he says that he
11 recognizes that you have met with Ms. Elizabeth
12 Gracon, I think. And second paragraph he says: "As
13 you know, the Embassy cannot provide," and this is in
14 relation to the physical issues and threats that you
15 had discussed," the Embassy cannot provide physical
16 security. I understand that Ms. Gracon recommended
17 that you make arrangements for personal protection if
18 you believe that the Colombian Authorities cannot
19 adequately protect you."
20 And then last paragraph: "Regarding your
21 ongoing legal dispute, the U.S. Embassy can only offer
22 limited assistance in resolving your civil legal
[Page 636]
1 matters. In cases such as these, the Embassy
2 recommends that you hire an experienced attorney to
3 pursue your case in the local justice system. I
4 understand that you have representation in Colombia,
5 and are satisfied with your legal counsel. You have
6 alleged serious corruption in the judicial system, but
7 this too needs to be addressed with Colombian
8 Authorities."
9 So, that's the U.S. response to you, right?
10 In relation to those allegations of corruption, right?
11 A. That's the letter that was sent by the
12 Embassy.
13 Q. And the final approach, as I understand it,
14 is the December 2016, which I understand to be a
15 meeting with Mr. Neff, so that's your First Statement
16 still at Paragraph 126. I quote: "U.S. Authorities
17 also seemed interested in what I knew about Malagón's
18 corruption. On 22 December 2016, I received a
19 WhatsApp message from a person purporting to be a U.S.
20 Drug Enforcement Agency (DEA) official named William
21 Neff."
22 And then you go ahead and explain that you
[Page 637]
1 were not quite comfortable with that because one of
2 your colleagues had thought--recognizing Mr. Neff from
3 the WhatsApp identity, right?
4 And then you say at Paragraph 127, "I met
5 with Neff at the U.S. Embassy in Bogotá on 27
6 December 2016; and also present were persons from OFAC
7 and the FBI. These officials acknowledged that López
8 Vanegas's kidnapping story was false and the
9 Precautionary Measures had not been properly imposed
10 on the Meritage."
11 They also extensively questioned me about
12 what I could tell them about Malagón's corruption.
13 So, that is the meeting where you were
14 concerned about the identity of Mr. Neff and he met
15 you outside the Embassy and took you in, right? It's
16 my understanding of the context.
17 A. That's the only meeting that I had with
18 William Neff at the Embassy.
19 Q. And just to be clear, I'm referring to C-182
20 at your Tab 35. It's a quite long exchange, so, I
21 don't propose to go there, but it's--you really being
22 concerned, and saying I don't feel comfortable, I
[Page 638]
1 don't know who you are, I need you to clarify your
2 identity.
3 And then at the end, it stops at he's at the
4 gate.
5 So, that's when you actually met him and
6 went into the Embassy, correct?
7 A. Yeah. I had serious security concerns. I
8 wanted to make sure that who I was chatting with was
9 actually a DEA Agent, was actually from the Embassy.
10 I wanted to make sure that I was actually going to
11 meet--I didn't want to show up to an ambush, so that's
12 what concerned me more than anything else.
13 Q. And then that's the meeting where OFAC and
14 FBI were present, and you discussed what I just
15 mentioned, right?
16 At Paragraph 126, I don't know if it's still
17 on the screen.
18 A. Correct. It's the only meeting I had with
19 William Neff.
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16 BY MS. BANIFATEMI
17 Q. It's related to the land which is seized for
18 Asset Forfeiture Proceedings, isn't it?
19 A. It appears to be referencing the property,
20 yes.
21 Q. Let's look at one last one. This is Exhibit
22 R-123. That's Tab 38. It's a letter of 26 July 2017,
[Page 649]
1 and actually you have both the Spanish and the English
2 version. I would like to look at both because the
3 English version is, in fact, not a good translation.
4 And again, this time it's signed by
5 Mr. Burdick, the same, to the Colombian Authorities
6 again.
7 And it refers to--you see the first
8 paragraph. It refers to the "United Nations
9 Convention Against Illicit Traffic and Narcotic Drugs
10 and Psychotropic Substances" signed in Vienna and
11 ratified by the U.S., right? This is the basis for
12 the action. [Redacted]
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20 Q. Right.
21 And the normal understanding would be that
22 FBI, the OFAC, and all of the U.S. Authorities looking
[Page 651]
1 into drug-trafficking DEA, that they would actually
2 give this information and this is internal to the U.S.
3 What is the purpose of the U.S. feeding back to
4 Colombia information that Colombia is giving to the
5 U.S.? It doesn't make any sense, does it?
6 A. I don't know. I can't comment on that. I
7 can tell you that they looked into everything, and
8 nothing came out about it. [Redacted]
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12 Q. Now, you're talking about OFAC?
13 A. I'm talking about everything.
14 Q. You're talking about OFAC?
15 A. The world of everything.
16 Q. Well, there was an investigation by OFAC, as
17 you say in your statement, and you say that it ended
18 up with no result, right?
19 A. That's correct.
20 Q. That's the OFAC investigation, right?
21 A. That's what, well, I mean, you're
22 referencing this, so I'm--.
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10 A. Well...
11 PRESIDENT SACHS: Okay. I think we should
12 have now another afternoon break, unless you have an
13 ultimate question.
14 MS. BANIFATEMI: I have one ultimate
15 question, Mr. President. Thank you for your patience.
16 PRESIDENT SACHS: Please try to be short
17 because the Court Reporters now need a break.
18 MS. BANIFATEMI: I'm really sorry.
19
20 BY MS. BANIFATEMI
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21 MS. BANIFATEMI: I'm done, Mr. President.
22 Thank you very much for your patience.
[Page 659]
1 PRESIDENT SACHS: Very good. We will resume
2 at 5:45, please.
3 MR. MOLOO: Does that mean you're done your
4 cross-examination? Or?
5 MS. BANIFATEMI: Yes, I am.
6 MR. MOLOO: Okay. So, we would still like a
7 break, but I just wanted to make sure whether I should
8 be preparing some redirect questions during the break.
9 Okay.
10 PRESIDENT SACHS: You might ask the
11 question, and so 15 minutes, okay?
12 MR. MOLOO: Thank you.
13 THE WITNESS: And just to confirm that means
14 I'm still--okay. 15 more minutes, all right, all
15 right.
16 PRESIDENT SACHS: Mr. Seda, you're still
17 under the testimony, and the same rule applies.
18 THE WITNESS: Yes, sir.
19 PRESIDENT SACHS: Thank you.
20 (Recess.)
21 PRESIDENT SACHS: We then go to redirect.
22 Mr. Moloo?
[Page 660]
1 MR. MOLOO: Thank you, Mr. President.
2
3 BY MR. MOLOO:
4 Q. Mr. Seda, I just have a few questions for
5 you.
6 Can you see me okay?
7 There's been a lot of innuendo today, so I
8 just want to clear up a few things.
9 Have there any--have there ever been any
10 criminal proceedings against you brought in the U.S.?
11 A. Never.
12 Q. What about in Colombia?
13 A. Never.
14 Well--no, never.
15 Q. Had there--there been some investigations,
16 though--
17 A. Sorry, I'm confusing investigations with
18 criminal proceedings.
19 Q. But have you ever been charged with any
20 crime or anything like that--
21 A. Never.
22 Q. --in Colombia?
[Page 661]
1 [Redacted]
2 [Redacted]
3 A. Never.
4 And when I paused, I was referencing a fraud
5 claim with regards to the Meritage thing brought
6 with--yes.
7 Q. And have you ever been put on any black list
8 that you know of?
9 A. Never.
10 Q. OFAC?
11 A. Never.
12 Q. UN Security Council List?
13 A. Never.
14 Q. Interpol?
15 A. No.
16 I've never been arrested. I've never had
17 any issue in Colombia or in the U.S. Never--
18 Q. Or anywhere else in the world?
19 A. Anywhere, ever.
20 Q. You know, after all of this, it was
21 suggested that you still--Colombia hasn't kicked you
22 out, and you still go to Colombia. How do you still
[Page 662]
1 travel to Colombia?
2 (Comment off microphone.)
3 MR. MOLOO: It was raised yesterday. There
4 was a chart.
5 PRESIDENT SACHS: Let's proceed, please
6 (Comment off microphone.)
7 MS. BANIFATEMI: The re-direct is supposed
8 to be based on the cross examination not on--(comment
9 off microphone)
10 MR. MOLOO: I'm in the Tribunal's hands.
11 PRESIDENT SACHS: No, no. Proceed, please.
12 Rephrase the question in a manner that is more
13 acceptable.
14 BY MR. MOLOO:
15 Q. It's been suggested by the other side that,
16 you know, there are still activities that you're doing
17 in Colombia. There are many things that post-2016
18 that you were referred to, you still are doing several
19 things in Colombia. A number of them were discussed
20 today, including today.
21 [Redacted]
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[Page 663]
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3 A. Because I'm defending my name, and because
4 this is gonna follow me no matter where I go. No
5 matter how long it takes, no matter how long I run,
6 this will follow me until I close the chapter on this.
7 So, look, I ran with my children for two
8 years, and there was a moment in time where my
9 children said they wanted to go back to Colombia, and
10 I think--excuse me. I came to the realization that I
11 have to put the final nails in this coffin, this--this
12 issue, and running away is not gonna get this solved.
13 And whatever the consequences are, that's what they
14 are, but I want to put an end to this. I do.
15 MR. MOLOO: I think that's it.
16 PRESIDENT SACHS: Thank you.
17 Please.
18
19 ARBITRATOR PEREZCANO: Thank you, Mr. Seda.
20 I want to follow up on an issue that was raised
21 earlier today--this morning, actually. Counsel for
22 the Respondent took you to Exhibit C-160. This was-
[Page 664]
1 this is the Osorio & Moreno Abogados Title Study, so a
2 subsequent Title Study to the Otero & Palacio one.
3 This was done in 2016, so you recall that exchange
4 that you had with counsel for the
5 Respondent--correct?--this morning.
6 THE WITNESS: I'm sorry. I remember...?
7 ARBITRATOR PEREZCANO: You recall she showed
8 you--
9 THE WITNESS: Correct, yes, yes, of course.
10 ARBITRATOR PEREZCANO: --the document.
11 And I, I'm not going to take you to this
12 document, but I will take you, if counsel for the
13 Respondent can have--oops, sorry, I just closed it,
14 but the Otero & Palacio, I think it's C-30. Correct.
15 Thank you.
16 So, anyhow, the--Ms. Banifatemi took you in
17 the Osorio & Moreno Title Study to a paragraph that
18 says, and I'll read it in Spanish: In accordance with
19 the documentation provided, the real estate property
20 that is under study is free of any encumbrances or any
21 limitation on the ownership title.
22 Do you recall that?
[Page 665]
1 THE WITNESS: I do recall this.
2 ARBITRATOR PEREZCANO: What is, in your
3 understanding, a gravamen?
4 THE WITNESS: Like--
5 ARBITRATOR PEREZCANO: It was translated by
6 counsel-
7 THE WITNESS: I'm sorry.
8 ARBITRATOR PEREZCANO: --by counsel as a "lien."
9 THE WITNESS: Yeah, lien. Sorry.
10 ARBITRATOR PEREZCANO: And I appreciate
11 you're not a lawyer, but you are an expert in real
12 estate, and this is an issue--this is language that
13 comes up all the time in real estate, is it not?
14 THE WITNESS: The language with regards to
15 that paragraph?
16 ARBITRATOR PEREZCANO: Well, the language
17 with regard to "gravamenes" and "limitaciones de
18 dominio." This is something you see all the time in
19 real estate, in purchase and sale of real estate. Is
20 that correct?
21 THE WITNESS: That's correct.
22 ARBITRATOR PEREZCANO: And it also--it goes
[Page 666]
1 on to say, "gravámenes o limitación al derecho de
2 dominio, "lien or encumbrances or limitations to--
3 regarding the ownership title."--
4 ARBITRATOR PEREZCANO: And, this morning,
5 you gave us your understanding of what that language
6 "limitación al derecho de dominio" was.
7 And, now, I want to take you to C-30.
8 THE WITNESS: In this binder?
9 ARBITRATOR PEREZCANO: I don't know whether
10 it's in the binder.
11 (Comment off microphone.)
12 ARBITRATOR PEREZCANO: It's on the screen.
13 THE WITNESS: I'm sorry.
14 ARBITRATOR PEREZCANO: I apologize, that binder was
15 prepared by the Respondent. I don't have a binder for
16 you, so I'm relying on the arguments that are on the
17 record, but you recognize this document, correct?
18 THE WITNESS: Yes, I do.
19 ARBITRATOR PEREZCANO: And this is the Otero
20 & Palacio Title Study that the Claimants, including
21 you, submitted in this case before us; correct?
22 THE WITNESS: That's correct.
[Page 667]
1 ARBITRATOR PEREZCANO: Now, if I can take
2 you further down to the similar language-and I
3 apologize I had it on my screen but I closed it, so
4 Paragraph 4, so there you see in 4, the first bullet
5 we have very similar language, "El inmueble"--and I'm
6 switching to Spanish--"the property is free of
7 encumbrances," you told us those are liens, the
8 translation was accurate as "liens," conditions
9 subsequent.
10 Can you give us your understanding of what
11 are those?
12 And again, I don't want a legal explanation,
13 but your understanding as a real estate expert or
14 businessman.
15 THE WITNESS: What was--What does the
16 English translation say?
17 ARBITRATOR PEREZCANO: Well, I will tell
18 you, and these are conditions that would terminate an
19 agreement, such as a Purchase and Sale Agreement. It
20 may be subject to a condition that would put an end to
21 that Agreement. And it can be a Purchase and Sale
22 Agreement or other type of agreement dealing with real
[Page 668]
1 estate. Are you familiar with the term or the
2 concept?
3 THE WITNESS: I think I just saw the English
4 version, it said "subsequent conditions."
5 ARBITRATOR PEREZCANO: Well, resulotorio, I
6 haven't seen the-I relied on the Spanish documents. I
7 haven't seen the English translation, but resolutorio
8 - something that puts an end to, in this case, a
9 condition that would put an end to something, like a
10 contract.
11 THE WITNESS: And I-and I greatly apologize.
12 I will have to plead ignorance on that-
13 ARBITRATOR PEREZCANO: No need to apologize.
14 THE WITNESS: ---but I honestly don't know.
15 ARBITRATOR PEREZCANO: If you don't know,
16 that's fine.
17 THE WITNESS: And, I'm sorry, and I know a
18 lot about real estate, and I just am not familiar with
19 that specific term.
20 ARBITRATOR PEREZCANO: Okay. And again, we
21 see "limitaciones de dominio." So again, do you know
22 what are those?--
[Page 669]
1 THE WITNESS: Limitations to property title.
2 I mean, I think they could be-I think it's speaking in
3 a general sense, and it's saying--I believe what it's
4 saying is any limitations that would--for example--I
5 will throw an example out there--that within the chain
6 of title, there was a legal representative or the
7 wrong person signed on title or there was a legal
8 representative who didn't have--you sign with the
9 counter-party, and they didn't have the right to sign
10 because they're legal representative of the
11 corporation, and they only could sign to a million
12 dollars, and the property is 10 million dollars. Or
13 limitations to domain with respect to-I mean it could
14 be a list of things, I would think.
15 ARBITRATOR PEREZCANO: Okay.
16 THE WITNESS: Easements, you know like--
17 ARBITRATOR PEREZCANO: Now. All right.
18 That's fine.
19 And, but you also told us earlier this
20 afternoon that almost every document that you
21 received, you turned it over to your attorney, your
22 in-house attorney, and he would know for sure what
[Page 670]
1 this language means, would he not?
2 THE WITNESS: My assumption is, yes, he's an
3 attorney that understands real-estate transactions
4 decently well. He's not a super high-level attorney,
5 but he has to be well-versed in a little bit of
6 everything: corporate, real estate, employment. It's
7 an in-house counsel that can do the initial things. I
8 would think that he has a decent understanding, yes.
9 ARBITRATOR PEREZCANO: Are you aware--do you
10 know if these categories, "gravámenes, condiciones
11 resolutorias y limitaciones al dominio," encumbrances
12 and all conditions subsequent and limitations to
13 ownership exist in the Colombian Civil Code, are you
14 aware of whether they are or not?
15 THE WITNESS: Working on assumption, I would
16 assume they are--
17 ARBITRATOR PEREZCANO: Okay.
18 THE WITNESS: --but I--it's just an
19 assumption.
20 ARBITRATOR PEREZCANO: But your counsel
21 would know?
22 THE WITNESS: I would think so, yes.
[Page 671]
1 ARBITRATOR PEREZCANO: And when you received
2 this Title Study and others that contain very similar
3 language, did he advise you on what these categories
4 mean?
5 THE WITNESS: No. We never had a discussion
6 about these--about these individual things. If we
7 did, I definitely would have asked what they meant
8 exactly.
9 ARBITRATOR PEREZCANO: Okay. Fair enough.
10 All right. Thank you, Mr. Seda.
11 Mr. President, that was my question or my
12 group of questions. I don't have any others. Thank
13 you.
14 PRESIDENT SACHS: Thank you.
15 And this in-house counsel, is he a Colombian
16 lawyer or U.S. attorney?
17 THE WITNESS: Colombian attorney.
18 PRESIDENT SACHS: "Colombian attorney,"
19 okay.
20 And where is he based, or she?
21 THE WITNESS: In Medellín.
22 PRESIDENT SACHS: In Medellín. Okay.
[Page 672]
1 All right. This was it. Thank you for your
2 testimony. You are now released, but we understand
3 you will continue to be present during the forthcoming
4 days.
5 (Witness steps down.)
6 PRESIDENT SACHS: Are there any housekeeping
7 matters that we need to discuss? Claimant?
8 MR. MOLOO: Just a note, nothing by way of
9 ask from the Tribunal, but yesterday we did discuss
10 potential new documents by the Claimant. We have
11 sent, I think, five documents to the Respondent. It
12 was very late last night. I don't expect you will
13 have reviewed them, but I just wanted to tell the
14 Tribunal there are five documents. We'll try and
15 resolve it between the Parties.
16 But--oh, sorry, I'm informed it's about 10
17 documents.
18 PRESIDENT SACHS: "10 documents," okay.
19 MR. MOLOO: But hopefully we won't have to
20 trouble the Tribunal with it. But I wanted to alert
21 the Tribunal to that. But nothing else.
22 PRESIDENT SACHS: Respondent?
[Page 673]
1 MS. BANIFATEMI: Nothing on our side. Thank
2 you, Mr. President.
3 PRESIDENT SACHS: All right. And the
4 program tomorrow will include Mr. Hernández, then
5 Ms. Ardila, and then Mr. Caro Gómez. That's the
6 program for tomorrow. And just to remind me, will
7 they all testify in Spanish?
8 MR. MOLOO: Yes.
9 PRESIDENT SACHS: All three of them? So-
10 MS. BANIFATEMI: Yes, they will,
11 Mr. President.
12 PRESIDENT SACHS: We will do our best to
13 cover the whole program tomorrow, counting on the two
14 of you there, that and the Translators and
15 Interpreters.
16 Thank you very much. Have a nice evening
17 and see you tomorrow at 9:30.
18 (Whereupon, at 6:01 p.m., the Hearing was
19 adjourned until 9:30 a.m. the following day.)
[Page 674]
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