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CPA Case No. 2019-11

IN THE CASE OF AN ARBITRATION IN ACCORDANCE WITH THE AGREEMENT FOR
THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS BETWEEN
THE KINGDOM OF SPAIN AND THE REPUBLIC OF VENEZUELA, SIGNED ON 2
NOVEMBER 1995 AND ENTERED INTO FORCE ON 10 SEPTEMBER 1997

THE ARBITRATION RULES OF THE UNITED NATIONS COMMISSION ON
INTERNATIONAL TRADE LAW (1976) (the "UNCITRAL Rules")

FERNANDO FRAIZ TRAPOTE (Spain/Venezuela)
(the "Claimant")

v.

THE BOLIVARIAN REPUBLIC OF VENEZUELA
(the "Respondent", and jointly with the Complainant, the "Parties")

FINAL REPORT

The Arbitral Tribunal Dr. Enrique Barros
Bourie (Presiding Arbitrator) Mr. Alexis
Mourre Prof. Raúl Vinuesa

Secretary of the Tribunal Mr.
José Luis Aragón Cardiel
Permanent Court of Arbitration

Assistant to the Court Mr.
Andrés Germain Ronco

January 31, 2022

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INDEX

I. INTRODUCTION ... 1

A. THE PARTIES ... 1

B. THE DISPUTE ... 2

II. PROCEDURAL HISTORY ... 3

A. COMMENCEMENT OF ARBITRATION ... 3

B. CONSTITUTION OF THE COURT ... 3

C. PROCEDURAL ORDER NO. 2 ... 3

D. ADOPTION OF THE ACT OF INCORPORATION AND PROCEDURAL ORDER NO. 1 ... 4

E. TERCERO FINANCISTA ... 4

F. LAWSUIT MEMORIAL ... 5

G. BIFURCATION OF THE PROCEDURE ... 5

H. WRITINGS ON OBJECTION RATIONE PERSONAE ... 6

I. AUDIENCIA ... 6

J. EVENTS AFTER THE HEARING ... 9

III. FACTUAL BACKGROUND ... 11

A. THE APPLICANT'S ALLEGED INVESTMENTS ... 11

L Investments in the public street advertising sector ... 11

2. Investments in the telecommunications sector ... 12

3. Investments in the education sector ... 15

4 Real Estate Investments ... 15

B. THE MEASURES ... 16

IV. THE FORMS OF ORDER SOUGHT BY THE PARTIES ... 20

A. THE DEFENDANT 'S REQUEST ... 20

B. THE PLAINTIFF 'S PETITION ... 20

V. JURISDICCIÓN RATIONE PERSONAE ... 22

A. THE INTERPRETATION OF THE TERM INVESTORS IN ACCORDANCE WITH ARTICLE 31 CVDT ... 22

1. Rules of interpretation ... 23

2. Textual interpretation of the concept of investor ... 26

3. Context of the Treaty ... 27

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LIST OF ABBREVIATIONS

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[Page v]

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I. INTRODUCTION

To. THE PARTIES

1. The plaintiff in these proceedings is Mr. Fernando Fraiz Trapote (hereinafter, the "Mr. Fraiz" or the "Plaintiff"), with address at Calle Portugal 01 02 PBJ C, Pozuelo de Alarcón, Madrid, Spain. The Applicant is represented in the present proceedings by:

Nigel Blackaby QC
Noiana Marigo Lluís
Paradell Ezequiel
Vetulli María Paz
Lestido Alexandre
Alonso
Freshfields Bruckhaus Deringer US LLP

Jean Paul Dechamps Gustavo
Topalian Pablo Jaroslavsky
Juan Ignacio González Mayer
Florencia Wajnman Horacio
Risso Julieta Cappelletti
Dechamps International Law

José Humberto Frias
Daniel Bustos
D'Empaire

2. The Respondent in these proceedings is the Bolivarian Republic of Venezuela (hereinafter referred to as "Venezuela" or the "Respondent", and together with the Complainant, the "Parties"). The Defendant is represented in these proceedings by:

Reinaldo Muñoz Pedroza
Attorney General of the Bolivarian Republic of Venezuela

Henry Rodríguez Facchinetti
General Manager of Litigation of the Attorney General's Office of the Bolivarian Republic of Venezuela

Alfredo De Jesús S.
De Jesús & De Jesús S.A.

Alfredo De Jesús O.
Marie-Thérèse Hervella
Eloisa Falcón López
Pierre Daureu Erika
Fernández Lozada Pablo
Parrilla Nicolás Emilio
Bianchi

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Déborah Alessandrini
Alfredo De Jesús O. - Transnational Arbitration & Litigation

B. THE DISPUTE

3. The present controversy arises as a result of the measures allegedly adopted by the Defendant against the investments made by the Plaintiff in Venezuela in the television, advertising and educational sectors. Specifically, the affected investments cover four Venezuelan commercial ventures: the group formed by the companies Cablevisión C.A. ("Cablevisión"), Venezolana de Transmisiones y Satélites CA ("TVS") and Transmisiones Multisatélites C.A. ("TMS") (collectively the "Cablevision Group"); Advertising Vepaco C.A. ("Vepaco"); LaTele Television CA ("LaTele"); and American Academy (collectively, the "Companies").

4. According to the Claimant, Venezuela's measures resulted in the expropriation of its holdings in the Companies, as well as its operating permits, concessions, qualifications and assets in general (collectively, the "Measures") without the payment of prompt, adequate compensation

and in violation of the Agreement for the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Republic of Venezuela, signed on 2 November 1995 and entered into force on 10 September 1997 (the "Treaty" or the "BIT").

5. The Respondent has raised a number of objections to the jurisdiction of the Tribunal. In this Award, the Tribunal adopts a decision on the Respondent's objection ratione personae, relating to the Claimant's dual Spanish and Venezuelan nationality (the "Objection Ratione Personae").

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II. PROCEDURAL HISTORY

To. COMMENCEMENT OF ARBITRATION

7. By Notice of Arbitration of 16 October 2018, received on the same day by the Respondent, the Claimant commenced arbitration proceedings against the Respondent in accordance with the Treaty and Arbitration Rules of the United Nations Commission on International Trade Law 1976 (the "UNCITRAL Rules").

B. CONSTITUTION OF THE TRIBUNAL

8. On January 18, 2019, the Plaintiff notified the appointment of Mr. Óscar M. Garibaldi, a dual Argentine and U.S. citizen, as first arbitrator.

9. On February 4, 2019, the Defendant challenged Mr. Garibaldi.

10. On February 22, 2019, the Respondent notified the appointment of Prof. Raúl E. Vinuesa, of dual Argentine and Spanish nationality, as second arbitrator.

11. On 19 June 2019, the Secretary-General of the Permanent Court of Arbitration (the "PCA"), as the appointing authority in the present arbitration, accepted the challenge raised against Mr. Garibaldi.

12. On 22 July 2019, the Applicant appointed Mr Alexis Mourre, a French national, to replace Mr Garibaldi.

13. By Acting on the Appointment of the Presiding Arbitrator, dated November 7, 2019, the Secretary General of the PCA appointed Dr. Enrique Barros Bourie, a Chilean national, as presiding arbitrator.

C. PROCEDURAL ORDER NO. 2

14. On 25 November 2019, the Court sent the Parties draft Articles of Incorporation y of Procedural Order No. 1 and invited them to submit any comments they deemed appropriate thereon.

15. On 9 December 2019, as part of his comments on draft Procedural Order No. 1, the Applicant proposed that a discovery phase be carried out prior to the filing of the Statement of Claim.

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16. On 17 December 2019, the Court asked the Applicant to submit a letter detailing the full terms of his proposal and explaining the reasons for it, also inviting a the Defendant to respond to said letter.

17. The Applicant submitted its application in its entirety on 27 December 2019, and on 8 January 2020 the Respondent submitted its observations on it.

18. On 6 February 2020, the Court issued Procedural Order No. 2, rejecting the Applicant's application of 27 December 2019 and ordering the Applicant to file his Statement of Claim on 18 May 2020.

D. ADOPTION OF THE ACT OF INCORPORATION AND PROCEDURAL ORDER NO. 1

19. A first procedural meeting was held on 13 February 2020 and was attended by the members of the Tribunal and its Assistant, the representatives of the Parties and the PCA.

20. On 26 March 2020, the Tribunal issued Procedural Order No. 1, establishing the procedural timetable and rules of procedure for arbitration. Pursuant to Section 2.1 of Procedural Order No. 1, the legal seat of arbitration is The Hague, Netherlands. In addition, as provided in section 4 of the same order, the Tribunal, with the consent of the Parties, appointed Mr. Andrés Germain as Assistant to the Tribunal.

21. On 15 May 2020, the Court circulated the Articles of Incorporation signed by the Parties and by the members of the Court. In accordance with the Articles of Incorporation, the language of arbitration is Spanish (section 7) and the PCA acts as the Secretariat in these proceedings (section 8).

And. THIRD PARTY FINANCIER

22. On February 6, 2020, the Claimant informed the Tribunal and the Respondent that "subsequent to the commencement of this Arbitration, and in order to mitigate its damages and diversify its risks, the Claimant entered into an external financing agreement for the Arbitration with A&G Investment Holdings LLC."

23. On February 12, 2020, the Respondent requested: (i) the Claimant to provide "useful information to identify the third-party financier, for the purposes of the analysis of possible conflicts of interest" and to submit "the financing agreement made in connection with this arbitration"; and (ii) the Court, to order the Applicant to produce such information in the event that the Applicant did not do so voluntarily.

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24. On February 21, 2020, Plaintiff submitted additional information about A&G Investment Holdings LLC and requested that Defendant's request for disclosure of the financing agreement be denied.

25. On 25 February 2020, the Respondent requested the Court's leave to submit comments on the Applicant's communication of 21 February 2020.

26. On 27 February 2020, the Court adopted the following decision:

After taking into consideration the Parties' allegations and the information submitted by the Claimant in relation to the Financing Agreement, and having deliberated, the Tribunal finds it unnecessary, at this stage of the proceedings, to submit additional information in relation to the Financing Agreement for the purpose of determining potential conflicts of interest. Nor has the Court been brought to the attention of any exceptional circumstance that could justify an order to disclose the Financing Agreement or to take precedence over the confidential nature of such an agreement, prima facie, by its very nature.

Consequently, the Court: (i) considers satisfied the Defendant's request that the Plaintiff "provide useful information that allows the identification of the third-party financier, for the purposes of the analysis of possible conflicts of interest"; and (ii) it rejects Respondent's request that the Court order Plaintiff to file the Financing Agreement.

F. MEMORANDUM OF CLAIM

27. On May 18, 2020, the Plaintiff filed its Claim Brief (the "Claim Brief").

G. BIFURCATION OF THE PROCEDURE

28. On 17 June 2020, the Respondent filed a Request for Bifurcation of the Proceedings, in which it announced two distinct objections to the jurisdiction of the Tribunal: (i) the Objection Ratione Personae, as the main objection; and (ii) an alternative objection ratione materiae, based on the argument that the Applicant has not made an investment in the terms required by the Treaty.

29. On 2 July 2020, the Applicant filed his Response to the Request for Forking.

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30. By decision of 18 July 2020, the Court decided to bifurcate the Defendant's objection ratione personae into a single jurisdiction stage.

H. WRITINGS ON OBJECTION RATIONE PERSONAE

31. On 7 September 2020, the Court confirmed the procedural timetable for the phase on the Objection Ratione Personae.

32. On September 16, 2020, the Respondent filed its Memorial on Jurisdictional Objection Ratione Personae (the "Brief").

33. On October 26, 2020, the Applicant filed his Response Brief on the Objection to Jurisdiction Ratione Personae (the "Response").

34. On November 20, 2020, the Respondent filed its Rebuttal Brief on Jurisdictional Objection Ratione Personae (the "Reply").

35. On December 15, 2020, the Plaintiff filed his Rejoinder Brief on the Objection to Jurisdiction Ratione Personae (the "Rejoinder").

I. AUDIENCE

36. On August 28, 2020, after taking into consideration the comments and availability of the Parties, the Court reserved February 16 to 19, 2021 for the holding of the Hearing on the Objection Ratione Personae (the "Hearing").

37. On 29 December 2020, the Court requested the Parties' comments on the possibility of holding the Oral Hearing via videoconference, in view of the existing travel restrictions and the state of the global COVID-19 pandemic.

38. On 5 January 2021, the Parties agreed that the Oral Hearing should be held by videoconference.

39. On 8 January 2021, the Court circulated a draft of Procedural Order No. 3, concerning the holding of the Hearing, and invited the Parties' comments thereon.

40. On 13 January 2021, the Parties submitted their comments on draft Procedural Order No. 3.

Joe Arias Tapia (Freshfields
Bruckhaus Deringer)

Jean Paul Dechamps Pablo
Jaroslavsky Florencia
Wajnman Horacio Risso
Manuela Díaz (Dechamps
International Law)

José H. Frías
(D'Empaire)

The Defendant

Reinaldo Muñoz Pedroza Henry Rodríguez Facchinetti (Office of
the Attorney General of the Bolivarian Republic of Venezuela)

Alfredo De Jesús S.
(De Jesús & De Jesús, S.A.)

Alfredo De Jesús O.
Marie-Thérèse Hervella, Pierre Daureu, Erika Fernández
Lozada, Pablo Parrilla, Nicolás E. Bianchi, Magdalena Bulit
Goñi, Déborah Alessandrini (Alfredo De Jesús O. -
Transnational Arbitration & Litigation)

Permanent Court of Arbitration

José Luis Aragón Cardiel, Legal Counsel and Clerk of the Court
Clara Ruiz Garrido, Deputy Legal Counsel Magdalena Legris, Case
Manager

Stenographers

Leandro Iezzi Virgilio
Dante Rinaldi (D-R
Esteno)

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41. A pre-Hearing conference was held on 14 January 2021, attended by the Court, the Parties, the Assistant Court and the PCA.

42. On 21 January 2021, the Court issued Procedural Order No. 3.

43. On January 27, 2021, the Respondent indicated that it did not consider it necessary to call Mr. Fraiz to be questioned at the Hearing.

44. On February 8, 2021, the Defendant requested authorization from the Court to incorporate into the file "five additional documents of an evidentiary nature"¹.

45. On 11 February 2021, the Applicant submitted its observations on the Respondent's request.

46. On 14 February 2021, the Respondent requested additional authorization from the Tribunal to incorporate the Dissenting Opinion of Prof. Thomas Clay into the award of jurisdiction in the case of Sergei Viktorovich Pugachev v. Russian Federation, which is on the record under reference CLA-173.

47. On February 15, 2021, the Court (i) issued Procedural Order No. 4, partially granting the Respondent's request of February 8, 2021; and (ii) granted the Respondent's request of February 14, 2021.

48. The hearing was held between 16 and 17 February 2021.

49. The following persons were present at the hearing:

The Court

Dr. Enrique Barros Bourie (Presiding
Arbitrator) Mr. Alexis Mourre Prof. Raúl
Vinuesa

Assistant to the Arbitral Tribunal

Andrés Germain

The Plaintiff

Nigel Blackaby
Lluís Paradell
Ezequiel Vetulli

¹ Respondent's letter to the Court, 8 February 2021, p. 1. ↩

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J. POST-HEARING EVENTS

50. On 18 February 2021, the Court invited the Respondent to submit a brief commenting on certain documents and legal authorities introduced by the Applicant at the Hearing as part of its response to the questions posed by the Tribunal at Hearing² itself.

51. On February 26, 2021, the Plaintiff and the Respondent filed their respective statements of costs (the "Plaintiff's Statement of Costs" and the "Defendant's Statement of Costs", respectively).

52. On the same day, the Parties submitted the agreed corrections to the transcripts of the Oral Hearing.

53. On 15 March 2021, the Respondent submitted a brief comment on the documents and legal authorities introduced by the Applicant at the Hearing.

54. On 24 March 2021, after being authorised by the Court, the Applicant submitted his observations on the Respondent's letter of 15 March 2021.

55. On 19 October 2021, the Applicant requested the Court's permission to submit "the judgment handed down by the Paris Court of Appeal on 12 October 2021 in the case between the Republic of Senegal and Mr. Ibrahim Aboukhalil entered in the general directory under No. RG 19/21625".

56. On 26 October 2021, the Respondent submitted comments on the Applicant's 19 October 2021 application.

57. On 28 October 2021, the Court rejected the Applicant's request of 19 October 2021, finding that it was "in the process of finalising the award on jurisdiction and finds that each party has had sufficient opportunity to present its arguments and evidentiary background".

58. On December 6, 2021, the Applicant updated the Court on developments in the process of annulment of the Decision on Jurisdiction issued in the case of Serafin García Armas v. Venezuela, incorporated into the file as Annex CLA-2. The following day, the Respondent submitted its observations on the Complainant's submission.

² On 24 February 2021, the Applicant provided an index of these new factual annexes (C-375 a C-384) and legal authorities (CLA-158 bis, CLA-158 ter, CLA-174 to CLA-176). ↩

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59. On 8 December 2021, the Court acknowledged receipt of the communications from both Parties to the 6 December 2021, reiterating that it was "close to finalising its award on jurisdiction y did not therefore consider it appropriate to present additional pleadings or legal authorities at that procedural moment."

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ΙΙΙ. FACTUAL BACKGROUND

60. The following factual background has been prepared on the basis of the arguments presented by the Parties to date and is intended solely to put the Tribunal's decision on the Objection Ratione Personae into context. In no case do they constitute conclusions of the Court on the facts underlying the present controversy.

To. THE PLAINTIFF'S ALLEGED INVESTMENTS

61. Between 1988 and 2014, Mr. Fraiz carried out business activities in Venezuela, particularly in the sectors of street advertising, telecommunications, the education sector, and the real estate sector. The following is a description of these activities according to the Complainant's account.

1. Investments in the street advertising sector

62. In 1988, Mr. Fraiz founded with his father the company Imagen Publicidad C.A. ("Advertising Image") with the purpose of undertaking business in the public street advertising sector³.

63. In April 1998, with the aim of expanding their street billboard business, Mr. Fraiz, his father and another partner acquired Vepaco, one of the leading advertising companies in Latin America⁴. Since then, the operations of Vepaco and Imagen Publicidad have been unified⁵.

64. In 2004, Mr. Fraiz acquired his father's shares in Vepaco and Imagen Publicidad, as well as those of his partner in Vepaco, controlling 100 per cent of both companies⁶.

65. By 2014, Vepaco had 3,738 advertising structures distributed in different parts of the Venezuelan territory⁷, offices in the building known as Torre Imagen (the "Image Tower")⁸,

³ Complaint Brief, § 16. ↩

⁴ Notice of Arbitration, § 18; Complaint Brief, § 18; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis); "History", Vepaco website (Annex C-143). ↩

⁵ Complaint Brief § 19; Vepaco "Road Show" presentation, 2013 (Appendix C-256) pp. 4-6. ↩

⁶ Notice of Arbitration, § 19; Complaint Brief, § 23; Imagen Publicidad Shareholders' Book, April 30, 1990, (Annex C-20) p. 9; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

⁷ Complaint Brief, § 26; Inventory of Vepaco fences, 2013 (Annex C-257). ↩

⁸ Notice of Arbitration, § 20; Complaint Brief, §§ 19, 61. ↩

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eleven production workshops and a fleet of vehicles⁹. Its client portfolio included companies such as Procter & Gamble, McDonald's and Coca-Cola¹⁰ and, since 2006, it had lease agreements with telecommunications operators for the installation of telecommunications equipment on its billboards¹¹.

2. Investments in the telecommunications sector

66. With the aim of undertaking businesses providing subscription television services and wireless internet, Mr. Fraiz acquired in 1998, together with his father and other investors, 100 percent of the companies Cablevisión, TMS and TVS¹².

67. The Cablevisión Group provided subscription television services thanks to the permits obtained by TMS and TVS under the regime of the Regulations for the Operation of the Subscription Television System¹³. These permits granted temporary rights over the assigned frequency until the granting of the definitive concession¹⁴. In practice, operators were allowed to start commercial exploitation of the allocated frequencies even though the concession process was still ongoing¹⁵.

68. In particular, TMS and TVS had obtained, in 1990, DMS Letters 610 and 611 (the "Reservation Letters")¹⁶ which reserved for them 20 frequencies in the radio space in the sub-band 2.5-2.7 GHz (the "Spectrum Frequencies")¹⁷; in 1991 and 1992, regular transmission permits to provide subscription television service in Caracas (the "Transmission Permits").

⁹ Complaint Brief, § 26; List of vehicles owned (directly or indirectly) by Mr. Fraiz (Apéndice II). ↩

¹⁰ Complaint Brief, § 26; Vepaco "Road Show" Presentation, 2013 (Appendix C-256) pp. 12-13. ↩

¹¹ Complaint Brief, § 26. ↩

¹² Notice of Arbitration, § 8; Complaint Brief, § 36; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

¹³ Notice of Arbitration, § 8; Complaint Brief, § 31; Regulations for the Operation of the Subscription Television System, January 11, 1989 (Annex C-12). ↩

¹⁴ Notice of Arbitration, § 12; Complaint Brief, § 33; Regulations for the Operation of the Subscription Television System, January 11, 1989 (Annex C-12) art. 11. ↩

¹⁵ Notice of Arbitration, § 12; Complaint Brief, § 34. ↩

¹⁶ Notice of Arbitration, § 10; Complaint Brief § 35; Official Letter DMS 610 of the Ministry of Transport and Communications, April 2, 1990 (Annex C-17); Official Letter DMS 611 of the Ministry of Transport and Communications, April 2, 1990 (Annex C-18). ↩

¹⁷ Notice of Arbitration, § 10. ↩

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Regular")¹⁸; and, between 1997 and 1999, various permits for the installation of equipment¹⁹ (the "Installation Permits"). These permits allowed Cablevisión to provide subscription television service in Caracas and eleven other regions of Venezuela until the definitive concessions were obtained²⁰.

69. After obtaining in 2001 a general administrative authorization to establish and operate a telecommunications network to offer wireless internet services²¹, Cablevisión began to provide internet services in 2006²², also maintaining its subscription television services.

70. On November 12, 2004, Mr. Fraiz indirectly acquired 100 percent of TMS (by acquiring 100 percent of Imagen Publicidad Corporativa)²³. In October 2005, Mr. Fraiz indirectly acquired 100 percent of TVS (by acquiring 100 percent of Latinoamerican Media Group)²⁴. In turn, in 2007, Mr. Fraiz acquired all of the shares of Invesco, thus passing a be the sole indirect owner of Cablevisión²⁵.

71. In addition, in 2001, Mr. Fraiz began activities in the television production and open television business. To this end, it indirectly acquired (through Imagen Televisión C.A.) 59.5 percent of the shares of Marte CVT Producciones de Televisión S.A.

¹⁸ Notice of Arbitration, § 10; Complaint Brief § 35; Order No. PADS-GST-00268, May 20, 2013 (Annex C-84) p. 2; Ruling No. PADS-GST-00270, May 20, 2013 (Annex C-86) pp. 1-2. ↩

¹⁹ Notice of Arbitration, § 10; Complaint Brief § 35; Installation Permits of the Cablevisión Group held by TMS, various dates (Annex C-318); Installation Permits of the Cablevisión Group held by TVS, various dates (Annex C-319). ↩

²⁰ Complaint Brief § 35. ↩

²¹ Notice of Arbitration, § 13; Complaint Brief, §§ 36-39; General Authorization, February 7, 2001 (Annex C-56). ↩

²² Complaint Brief, § 40. ↩

²³ Reply, § 227; Shareholders' book of Imagen Publicidad Corporativa, 16 December 1990 (Appendix C-23) p. 3; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

²⁴ Reply, § 227; Shareholders' Book of Latinoamerican Media Group C.A., June 10, 1998 (Appendix C-41), p. 11; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

²⁵ Reply, § 227; Minutes of the meeting of Invesco A.V.V., November 12, 2007 (Exhibit C-71); Share Certificate No. 4 issued by Invesco A.V.V., November 12, 2007 (Exhibit C-72); Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

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("Mars CVT)²⁶, Marte CVT had several regular transmission permits with national coverage granted in 1999 that authorized it to provide open television services²⁷.

72. In 2005, Mr. Fraiz indirectly acquired 10.5 additional shares of Marte CVT²⁸, thus controlling 70 percent of the company²⁹. The remaining 30 percent continued to be indirectly owned by Sociedad de Inversiones Lileska C.A. ("Lileska")³⁰.

73. In 2007, Mr. Fraiz took control of 99.025 per cent of LaTele³¹.

74. In order to bring the permits into line with the new regulatory framework of the Organic Law on Telecommunications of June 2000³², in 2002 Marte CVT submitted the corresponding application for the transformation of its permits into concessions³³. This transformation was finally granted by the National Telecommunications Commission (the "CONATEL") on June 18, 2012³⁴. That same year,

²⁶ Mr. Fraiz acquired, through Imagen Televisión C.A., 70 percent of the shares of Inversiones Vistana 333 C.A., which in turn held 100 percent of the shares of Marte CVT. Notice of Arbitration, § 21; Complaint Brief, § 49; Share purchase agreement between Producciones Agualinda C.A. and Imagen Televisión C.A., September 12, 2001, (Appendix C-62); Shareholders' book of Inversiones Vistana, 333 CA, 16 April 2001 (C-60), pp. 8-9; Strategic Partnership Agreement between Hernán Pérez Belisario and Julio César Makarem Urdaneta, 22 February 2001 (Annex C-57); ↩

²⁷ Clarification of the Strategic Partnership Agreement of 22 February 2001, 20 March 2001 (Annex C-58). See Corporate Structure of Mr. Fraiz's Investments (Appendix I bis). ↩

²⁸ Notice of Arbitration, § 23; Complaint Brief, § 50; Official Letter No. 000405, February 1, 1999, (C-202); See Official Letter No. 004441, October 11, 1999 (Annex C-207); See Official Letter RD/No. 00116, 11 January 2000 (Annex C-209); Official Letter No. GSR-00/000910, March 13, 2000 (Annex C-210); Official Letter No. GSR-003073, June 26, 2000 (Annex C-212). ↩

²⁹ Reply, § 227; Shareholders' book of Imagen Televisión C.A., April 10, 2008 (Appendix C-75 bis) p. 6. ↩

³⁰ Notice of Arbitration, § 21; Complaint Brief, § 51; Minutes of the Extraordinary General Meeting of Shareholders of Marte CVT, October 30, 2002 (Appendix C-218) pp. 5-6; LaTele Assembly Minutes, 7 February 2003 (Annex C-66). ↩

³¹ Lileska owned 30 percent of Inversiones Vistana 333 C.A., which in turn owns 100 percent of the shares of Marte CVT. Notice of Arbitration, § 21; Complaint Brief, § 49; Shareholders' book of Inversiones Vistana 333 C.A., 16 April 2001 (Appendix C-60) p. 11. ↩

³² Notice of Arbitration, § 21; Complaint Brief, § 55; Minutes of the Assembly of LaTele, March 30, 2007 (Annex C-69) pp. 3-4; LaTele Shareholders' Book, July 20, 1989 (Appendix C-14) p. 8. ↩

³³ Notice of Arbitration, § 14; Complaint Brief, § 37; Organic Law on Telecommunications, published in the Official Gazette of the Bolivarian Republic of Venezuela No. 36.970 of 12 June 2000 (Annex C-55). ↩

³⁴ Notice of Arbitration, § 23; Complaint Brief, § 50. ↩

³⁵ Notice of Arbitration, § 23; Complaint Brief, § 56; Concession No. CRDF-00820, June 18, 2012, (Annex C-252) p. 2. ↩

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CONATEL also granted another national concession for five years³⁵ and signed two concession contracts with Marte CTV³⁶ (LaTele since October 2002³⁷).

75. In 2014, LaTele owned the LaTele³⁸ Studios, located in Caracas, as well as two transmission towers in the Waraira Repano National Park (El Ávila) and twelve transmitters with national coverage³⁹. Likewise, LaTele was the owner of intellectual property rights over a catalog of audiovisual productions⁴⁰, in addition to the concessions for the provision of the open television service mentioned above.

3. Investments in the education sector

76. In 2010, Mr. Fraiz inherited 16.6 percent of the American Academy⁴¹, an institute of tertiary studies founded by his father in 1959. In 2014, the Academy had twelve campuses distributed throughout the territory of Venezuela in which it taught more than 4000 students and employed more than 200 workers⁴².

4. Real Estate Investments

77. Mr. Fraiz was also the owner of eleven companies intended for the ownership and management of various real estate and other assets⁴³. One of these buildings was the Torre Imagen, on the

³⁵ Complaint Brief § 56; Grant No. CRDF-00821, June 18, 2012 (Annex C-81). ↩

³⁶ Complaint Brief § 56; Concession Contract No. CRDF-00820-C, July 2, 2012 (Annex C-253); Amending Addendum to Concession Agreement No. CRDF-00820-C, July 2, 2012 (Annex C-254); Concession Contract No. CRDF-00821-C, July 2, 2012 (Annex C-255). ↩

³⁷ At § 72 supra. ↩

³⁸ Notice of Arbitration, § 24; Complaint Brief, § 57; Witness Statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 49; Contract for the Sale of Lots and Constructions between Marte CVT and Textilana, S.A., November 8, 1991, (Annex C-172) pp. 5-6. ↩

³⁹ Notice of Arbitration, § 24; Complaint Brief, § 54; Witness Statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 42. ↩

⁴⁰ Notice of Arbitration, § 24; Complaint Brief, § 57; Witness Statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 49. ↩

⁴¹ Notice of Arbitration, § 25; Complaint Brief, § 59, footnote 100; Corporate Structure of Mr. Fraiz's Investments (Appendix I bis), p. 5; Witness Statement of Fernando Fraiz Trapote (Annexo CVS-1) § 50. ↩

⁴² Notice of Arbitration, § 25; Complaint Brief, § 59; Witness Statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 51. ↩

⁴³ Notice of Arbitration, § 26; Complaint Brief, § 60 (Appendices JCC-I through JCC-XXV). ↩

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which were, among others, the administrative and commercial headquarters of the Cablevisión Group, Imagen Publicidad and Vepaco⁴⁴.

B. THE MEASURES

78. According to the Complainant, the Venezuelan government intervened in its operations by unjustifiably revoking the permits of the Cablevisión Group and adopting expropriatory measures in the context of a criminal case initiated against Mr. Fraiz in 2002.

79. On May 20, 2013, CONATEL, by means of four rulings⁴⁵, rejected the requests for the transformation of the Reservation Offices and the Installation Permits of TMS and TVS, revoked their Regular Transmission Permits for the provision of services in Caracas and terminated the procedure for the transformation of the Regular Transmission Permits⁴⁶. These permits were the ones that authorized Cablevisión to operate on the Spectrum Frequencies for the provision of its internet and subscription television services.

80. The decisions were appealed by TMS and TVS in August and September 2013⁴⁷.

81. In addition, on 20 June 2013, CONATEL initiated administrative sanctioning proceedings against Cablevisión for alleged breaches of the conditions for the provision of telecommunications services⁴⁸. In the course of that procedure, it was ordered, as a measure

⁴⁴ Complaint Brief, § 61; Contracts of sale of the Torre Imagen, various dates (Annex C-317). ↩

⁴⁵ Notice of Arbitration § 29; Complaint Brief, § 66; See Order No. PADS-GST-00268, 20 20, 2013 (Annex C-84); Ruling No. PADS-GST-00269, May 20, 2013, (Annex C-85); Ruling No. PADS-GST-00270, May 20, 2013 (Annex C-86); Ruling No. PADS-GST-00271, May 20, 2013 (Annex C-87) See also Permits of the Cablevisión Group and CONATEL Measures (Appendix III). ↩

⁴⁶ Notice of Arbitration § 30; Complaint Brief, § 67-68; Ruling No. PADS-GST-00271, May 20, 2013 (Annex C-87) p. 4; Ruling No. PADS-GST-00268, May 20, 2013, (Annex C-84) pp. 5-6; Ruling No. PADS-GST-00270, May 20, 2013 (Annex C-86) pp. 4-5. ↩

⁴⁷ Notice of Arbitration § 38; Complaint Brief, §§ 72, 74; Appeal for Reconsideration against Ruling No. PADS-GST-00270, August 6, 2013 (Annex C-96); Appeal for Reconsideration against Ruling No. PADS-GST-00271, August 6, 2013 (Annex C-97); Appeal for Reconsideration against Ruling No. PADS-GST-00268, August 7, 2013 (Annex C-98); Appeal for Reconsideration against Ruling No. PADS-GST-00269, August 7, 2013 (Annex C-99); Hierarchical Appeal against Ruling No. PADS-GST-00270, September 17, 2013 (Annex C-103); Hierarchical Appeal against Ruling No. PADS-GST-00271, September 17, 2013 (Annex C-104 bis); Hierarchical Appeal against Ruling No. PADS-GST-00268, September 17, 2013 (Annex C-101); Hierarchical Appeal against Ruling No. PADS-GST-00269, September 17, 2013 (Annex C-102). ↩

⁴⁸ Notice of Arbitration § 40; Complaint Brief, § 69; Ruling No. PADS-064, June 20, 2013 (Annex C-89). ↩

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provisional order, the immediate suspension of Cablevision's operations on the Spectrum Frequencies and the immediate confiscation of the equipment that the company used to operate⁴⁹.

82. According to the Complainant, on June 27, 2013, representatives of CONATEL went to Cablevisión's premises and disconnected and seized the equipment, which forced Grupo Cablevisión to discontinue service to all of its customers⁵⁰. A month later, on July 26, 2013, the precautionary measure of seizure was revoked and the return of the equipment⁵¹ was ordered, while the precautionary measure of suspension of use⁵² was confirmed

83. At the same time, pending the resolution of the sanctioning proceedings against Cablevisión and of the appeals filed by TMS and TVS, on December 16, 2014, CONATEL awarded, through a public offering procedure⁵³, the Spectrum Frequencies to the companies Telefónica Venezolana C.A. and Galaxy Entertainment de Venezuela C.A. Question 54

84. In 2002, the company Lileska filed a criminal complaint against several of the persons involved in the purchase and sale of Marte CVT shares, including Mr. Fraiz⁵⁵. In the course of the process, the case was assigned to the Sixth Court of First Instance in Control Functions of the Criminal Judicial Circuit of Caracas⁵⁶. That court, in response to a request for interim measures

⁴⁹ Notice of Arbitration, § 42; Complaint Brief, § 70; Ruling No. PADS-064, June 20, 2013 (Annex C-89), p. 11. ↩

⁵⁰ Notice of Arbitration, § 42; Complaint Brief, § 70; Record of Seizure in Building 123, June 27, 2013 (Annex C-90); Record of seizure in Torre Imagen, June 27, 2013 (Annex C-91); Record of Seizure at the Transmission Plant, June 27, 2013 (Annex C-92); Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1), § 64. ↩

⁵¹ Notice of Arbitration, § 44; Complaint Brief, § 71; Record of return of equipment, July 26, 2013 (Annex C-95). ↩

⁵² Complaint Brief, § 71; See Ruling No. PADS 073, July 22, 2013 (Annex C-265) p. 17. ↩

⁵³ Notice of Arbitration, § 45; Complaint Brief, § 75; Single General Specifications for Procedures 0037, 0038, 0039 and 0040, 28 November 2013 (Annex C-267) p. 3; First call for the award of the Frequencies, December 2, 2013 (Annex C-105); Second call for the award of the Frequencies, December 11, 2013 (Annex C-106). ↩

⁵⁴ Notice of Arbitration, § 45; Complaint Brief, § 77; See Concession Agreement No. CTGS-00484-C, November 19, 2014 (Annex C-279) clause seventeen; See Concession Agreement No. CTGS-00486-C, November 19, 2014 (Annex C-281), clause seventeen. ↩

⁵⁵ Notice of Arbitration, § 47; Complaint Brief, § 79; Complaint filed by Lileska with the Chief of the Criminal Records Distribution Office of the Judicial District of the Metropolitan Area of Caracas, March 18, 2002 (Annex C-215). ↩

⁵⁶ Notice of Arbitration, § 54; Complaint Brief, § 83; Submission to the case of the judge of the Sixth Court, April 28, 2014 (Annex C-109). ↩

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ex parte⁵⁷, decreed, among others, the creation of a judicial audit board to "guarantee the continuity of LaTele's activities "⁵⁸, appointing Mr. Antonio Natividad Millán Moreno as its representative⁵⁹.

85. According to the Applicant, on May 9, 2014, Mr. Millán, accompanied by a locksmith and armed agents of the Bolivarian Intelligence Service (SEBIN) and the Scientific, Criminal and Criminal Investigations Corps (CICPC), accessed, on behalf of the Audit Board, several offices located in the Torre Imagen, including those of Vepaco and the Cablevisión Group. violating their records and files and stealing documentation and computers⁶⁰. The Plaintiff also alleges that this action was repeated at the headquarters of LaTele⁶¹ and the American Academy⁶², without Mr. Fraiz having been able to regain control of these companies⁶³.

86. In May 2014, the powers of the Judicial Audit Board were expanded⁶⁴. On the basis of this extension, the Judicial Audit Board signed three contracts with the company Asociación Civil Valbuena & Makarem S.C. ("V&M")⁶⁵, allowing them to dispose of the assets of Academia Americana, Vepaco and LaTele. According to the Claimant, this included payments obtained by these companies in the provision of their services which, thereafter, were diverted directly to V&M⁶⁶.

⁵⁷ Notice of Arbitration, § 56; Complaint Brief, § 84; Application for precautionary measures before the Sixth Court, April 30, 2014 (Annex C-110). ↩

⁵⁸ Notice of Arbitration, § 57; Complaint Brief, §§ 84-85; Decision on the request for precautionary measures of the Sixth Court, May 7, 2014 (Annex C-111) pp. 21-22. ↩

⁵⁹ Notice of Arbitration, § 57; Complaint Brief, § 86; Minutes of swearing-in of the Representative of the Audit Board, May 8, 2014 (C-112); Decision on the request for interim measures of the Sixth Court, 7 May 2014 (C-111) p. 21. ↩

⁶⁰ Notice of Arbitration, § 58; Complaint Brief, §§ 88-89; Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1) §§ 82-83; "Intervention Board Prevented Entry to La Tele", Ultimas Noticias, May 12, 2014 (Annex C-113); See Complaint to the Internal Policy Commission of the National Assembly, October 28, 2014 (Annex C-130) pp. 14-15. ↩

⁶¹ Notice of Arbitration, § 58; Complaint Brief, § 91; Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1) $ 85-86. ↩

⁶² Notice of Arbitration, § 60; Complaint Brief, § 101; Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 91. ↩

⁶³ Complaint Brief, §§ 92 and 101; Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 90. ↩

⁶⁴ Notice of Arbitration, § 63; Complaint Brief, § 100; Extension of powers of the Judicial Audit Board, May 19, 2014 (Annex C-120). ↩

⁶⁵ Notice of Arbitration, § 63; Complaint Brief, § 103; Contract between LaTele and V&M, May 30, 2014 (Exhibit C-121) pp. 4-5; Contract between American Academy and V&M, May 30, 2014 (Exhibit C-274) pp. 6-7; Contract between Vepaco and V&M, May 30, 2014 (Annex C-275) pp. 4-5. ↩

⁶⁶ Notice of Arbitration, § 63; Complaint Brief, § 103. ↩

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87. Subsequently, on August 8, 2014, an Advance Indemnity Agreement was concluded, by means of which certain assets of Vepaco, Cablevisión, LaTele and Academia Americana were transferred to Grupo Trust Mediático C.A. as an "advance" on future compensation and "preliminary compensation for damages" (among others, movable and immovable property, vehicles, billboards, telecommunications equipment and furniture)⁶⁷.

88. In addition, according to the Plaintiff, Mr. Fraiz's private residence was violently occupied on behalf of the Judicial Audit Board⁶⁸.

89. To this day, according to the Applicant, his companies remain in the hands of third parties or the Government⁶⁹.

⁶⁷ Notice of Arbitration, § 66; Complaint Brief, § 104; Contract between the Judicial Audit Board and the Media Trust Group, August 5, 2014 (Annex C-124). ↩

⁶⁸ Complaint Brief, § 105; Witness statement of Fernando Fraiz Trapote (Exhibit CWS-1) § 97. ↩

⁶⁹ Complaint Brief, §§ 122-129; Complaint to the Internal Policy Commission of the National Assembly, October 28, 2014 (Annex C-130) pp. 18-19; Witness Statement of Fernando Fraiz Trapote (Exhibit CWS-1); Judicial Inspection File before the 12th Municipal Court, December 14, 2015 (Annex C-290) p. 8. ↩

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IV. THE FORMS OF ORDER SOUGHT BY THE PARTIES

To. THE DEFENDANT 'S REQUEST

90. In its Brief on Objection Ratione Personae, as well as in its Rebuttal Brief on Objection Ratione Personae, the Respondent requests the Court to:

(a) DECLARE that it lacks jurisdiction or competence ratione personae to hear the claim made by Mr. Fraiz Trapote;

(b) CONDEMN and ORDER Mr. Fraiz Trapote to pay all costs incurred by the Republic in connection with the arbitration, including the fees and expenses of the Arbitral Tribunal and all legal fees and expenses incurred by the Republic (including, but not limited to, attorneys' fees and expenses);

(c) CONDEMN and ORDER Mr. Fraiz Trapote to pay the interest he deems appropriate on the amounts owed to the Republic that are generated between the time of the conviction by way of expenses y costs and the time of actual payment, and;

(d) ORDER any other action it deems appropriate, ⁷⁰

B. THE PLAINTIFF 'S REQUEST

91. In his Brief of Application, the Applicant requests the Court to:

(a) DECLARE that it has jurisdiction to hear this dispute;

(b) DECLARE that Venezuela has violated the Treaty and international law, and in particular that:

(c) illegally expropriated Mr. Fraiz's investments in violation of Article V of the Treaty; and

(d) failed to comply with its obligations to accord Mr. Fraiz's investments fair and equitable treatment, in violation of Article IV.1 of the Treaty;

⁷⁰ Memorial, § 206; Rebuttal, § 216. ↩

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(e) ORDER Venezuela to compensate Mr. Fraiz for the damages suffered as a result of Venezuela's violations of the Treaty and international law, [...] plus compound interest until the effective payment of the total amount of the award takes place, without Venezuela being able to withhold any amount by way of taxes on said compensation;

(f) GRANT any additional or other relief that the Court deems appropriate; and

(g) ORDER Venezuela to pay the costs of this arbitration, including the fees and expenses of the Tribunal, the fees and expenses of the Permanent Court of Arbitration, the fees and expenses related to the legal representation of the Claimant, and the fees and expenses of the experts appointed by the Claimant and/or the Tribunal, plus interest thereon. ⁷¹

92. In his Reply Brief on Objection Ratione Personae, as well as in his Rejoinder Brief on Objection Ratione Personae, the Applicant requests the Court to:

(a) REJECT all jurisdictional objections ratione personae raised by Venezuela:

(b) DECLARE that you have jurisdiction ratione personae with respect to your claim;

(c) ORDER Venezuela to pay all costs resulting from the processing of its objections, including the fees and expenses of the Tribunal, the administrative costs of the PCA, as well as the fees and expenses related to the legal representation of the Plaintiff, plus interest; and

(d) GRANT the Claimant any additional or different satisfaction it deems appropriate, ⁷²

⁷¹ Complaint Brief, § 388. ↩

⁷² Reply, § 231; Rejoinder, § 144. ↩

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V. JURISDICCIÓN RATIONE PERSONAE

93. The Respondent maintains that Mr. Fraiz, as a Venezuelan national, cannot avail himself of the terms of the Treaty by invoking his Spanish nationality. This is because the Treaty, as interpreted in accordance with the 1969 Vienna Convention on the Law of Treaties (the "VCLT"), cannot be invoked by dual Venezuelan and Spanish nationals.

94. The Respondent also argues that the general principles of international law relating to equality between States, non-responsibility and dominant and effective nationality, insofar as they are relevant for the purposes of interpreting the Treaty and also directly applicable to the present dispute, also preclude the Claimant from bringing international arbitration before a State of which it is a national.

95. In the alternative, the Respondent argues that the Treaty prevents Mr. Fraiz from bringing a claim under the Treaty on the grounds that he had only Venezuelan nationality at the time of making his investments.

To. THE INTERPRETATION OF THE TERM INVESTORS IN ACCORDANCE WITH ARTICLE 31 CVDT

96. The Respondent claims that Mr Fraiz is not an investor within the meaning of Article 1(1)(a) of the Treaty, according to which:

For the purposes of this Agreement:

1. 'Investors' means:

(a) Natural persons who are nationals of one of the Contracting Parties under its legislation and make investments in the territory of the other Contracting Party ⁷³.

97. The Parties agree that the term investors must be interpreted in accordance with Article 31 of the VCLT, but they differ both in the manner in which the interpretative exercise is carried out and in the result of the interpretative exercise.

98. The Respondent submits that the only interpretation of the term investors under the VCLT is to conclude that the Treaty protects investors who hold the nationality of one of the

⁷³ Tretado (Annexo C-27) Art. I.1.A). ↩

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Contracting Parties, but not both⁷⁴. It therefore considers that Mr Fraiz is not an investor protected by the Treaty as he holds dual Spanish-Venezuelan nationality. On the contrary, the Applicant submits that an interpretation in accordance with the VCLT allows it to be concluded that the term investors includes dual nationals of both Contracting Parties, which entitles Mr. Fraiz to invoke the Treaty.

99. Specifically, the areas of disagreement between the Parties are specified in: (1) the mode of application of the rules of interpretation of Article 31.1 CVDT; (2) the textual interpretation of the concept of investor; (3) interpretation in accordance with the context of the BIT; (4) the object and purpose of the Treaty; and (5) compatibility with principles of international law. These issues are discussed in the order set out above.

1. Rules of interpretation

(i) Position of the Respondent

100. The Defendant maintains that Article 31.1 CVDT⁷⁵ establishes a general rule "that must be applied as a whole, combining the different elements that compose it, without there being a hierarchy or order of application between them "⁷⁶, that is, valuing equally the text, the context and the object and purpose of the treaty united by the principle of good faith"⁷⁷.

101. According to the Respondent, this combined application was highlighted by the United Nations International Law Commission (the "ILC") in the drafting of the Draft Articles of the VCLT ⁷⁸ y by the arbitral tribunals in the cases of Audit of Accounts between the Netherlands and France⁷⁹ and Manuel

⁷⁴ Memorial, § 13. ↩

⁷⁵ CVDT, May 23, 1969 (Annex RLA-64) art. 31.1. ↩

⁷⁶ Memorial, § 17, 20; Mark E. Villiger, Commentary on the 1969 Vienna Convention on the Law of Treaties, ed. Leiden-Boston, 2009 (Anexo RLA-65) p. 435, § 29; Richard K. Gardiner, Treaty Interpretation, The Oxford International Law Library, 2016 (Anexo RLA-66) p. 161; Hervé Ascensio, Article 31 of the Vienna Conventions on the Law of the Treaties and International Investment Law, ICSID Review, Vol. 31, No. 2, 2016 (Anexo RLA-69) p. 373. Ver también Réplica, §§ 19, 21; Patrick Daillier, Mathias Forteau, Alain Pellet, Droit international public, L.G.D.J., Lextenso Ed. (8a Ed.) 2009 (Anexo RLA-84) n° 169. ↩

⁷⁷ Rebuttal, § 19. See also Transcript, Day 1, 67:8-12. ↩

⁷⁸ Memorial, § 17, International Law Commission, Draft Articles on the Law of Treaties with their commentaries, ILC Yearbook, Vol. II (1966) (Annex RLA-67) pp. 219-220. ↩

⁷⁹ Memorial, § 18; Case concerning the audit of accounts between the Kingdom of the Netherlands and the French Republic under the Additional Protocol of 25 September 1991 to the Convention on the Protection of the Rhine against Chloride Pollution of 3 December 1976, Permanent Court of Arbitration, Award of 12 March 2004 (Annex RLA-68) § 62. ↩

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García Armas v. Venezuela⁸⁰, as well as by some of the authors cited "incompletely" by Plaintiff⁸¹.

102. As for the Claimant's "literal interpretative proposal", which puts the text of the treaty before the rest of the interpretative elements of Article 31(1) VCLT, the Respondent alleges that this is nothing more than an attempt to replicate "the literal reading set by the arbitral tribunal in the case of Serafin García Armas v. Venezuela" and the judicial judgment handed down in 2017 by the Paris Court of Appeal in relation to the same case⁸², which, the Defendant reiterates, have been annulled in their entirety⁸³. In addition, it states that this interpretation was expressly rejected by the arbitral tribunal in the Manuel García Armas case⁸⁴.

(ii) Position of the Complainant

103. The Applicant does not deny that the elements of Article 31(1) CVDT are "interdependent" or that "the ordinary meaning of the text must be determined 'not in the abstract', but 'in the context of the treaty as a whole"⁸⁵. However, the Applicant defends the primacy of the text when it is drafted in clear and precise terms, since the text is the most "authentic" and "recent" expression of the intention of the Parties⁸⁶. Therefore, the Plaintiff concludes that "if the text does not make no sense

⁸⁰ Memorial, § 19; Manuel García Armas et al. v. Bolivarian Republic of Venezuela (PCA Case No. 2016-08), Award on Jurisdiction, December 13, 2019 (Annex RLA-5) §§ 643-644. ↩

⁸¹ Réplica §§ 23-24; refiriéndose a Contestación, §§ 19-20; Oppenheim, Oppenheim's International Law, Vol. I, Longman (9a Ed.), 1996 (Anexo RLA-85); James Crawford, Brownlie's Principles of Public International Law, Oxford University Press (8a Ed.), 2012 (Anexo RLA-86). ↩

⁸² Reply, § 39; Serafin García Armas and Karina García Gruber v. Republic of Venezuela (PCA Case No. 2013-3), Decision on Jurisdiction, December 15, 2014 (Annex CLA-2); Republic of Venezuela c. Serafín García Armas and Karina García Gruber, Judgment of the Paris Court of Appeal, April 25, 2017 (Annex CLA-3). ↩

⁸³ Reply, § 39; Paris Court of Appeal, RG No. 19/03588, Bolivarian Republic of Venezuela v. Serafin García Armas and Karina Garcia Gruber, June 3, 2020 (Annex RLA-7); French Court of Cassation, First Civil Chamber, Appeal of Cassation No. A 17-25.851, Bolivarian Republic of Venezuela c. Serafin García Armas and Karina Garcia Gruber, February 13, 2019 (Annex RLA-6). See also Memorial, § 102. ↩

⁸⁴ Reply, § 40; Manuel García Armas et al. v. Bolivarian Republic of Venezuela (PCA Case No. 2016-08), Award on Jurisdiction, December 13, 2019 (Annex RLA-5) § 644. ↩

⁸⁵ Dúplica, § 18; Réplica, § 21, 23-24; Patrick Daillier, Mathias Forteau, Alain Pellet, Droit international public, L.G.D.J., Lextenso Ed. (8a Ed.), 2009 (Anexo RLA-84) § 169; Oppenheim, Oppenheim's International Law, Vol. I, Longman (9a Ed.), 1996 (Anexo RLA-85); James Crawford, Brownlie's Principles of Public International Law, Oxford University Press (8a Ed.), 2012 (Anexo RLA-86). ↩

⁸⁶ Reply, § 19; citing Asian Agricultural Products Ltd. v. Republic of Sri Lanka (ICSID Case No. ARB/87/3), Final Award, 27 June 1990 (Annex CLA-26) § 40; Oppenheim, Oppenheim's International Law, Vol. I, Longman (9th ed.) (1996) (Annex CLA-28) p. 1271. See also Rejoinder, § 15. ↩

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in the context of the treaty in which it is found, and in relation to its object and purpose, it must be given effect"⁸⁷, without the context of the treaty or its object and purpose being used to deny the literal interpretation o to justify other interpretations⁸⁸.

104. The Applicant asserts that this position has been adopted by numerous authors⁸⁹ and tribunals, including the International Court of Justice in the Territorial Dispute case (Libya v. Chad) and "the vast majority of investment tribunals ⁹⁰.

105. The Claimant also indicates that the arbitral tribunals in the cases of Rompetrol v. Romania and Ping v. Belgium, respectively, considered that: (i) "an interpretation that ignores the definition of investor established by the BIT when that definition is clear"⁹¹ and (ii) "that the alleged intentions of the parties should not be used to replace the definitions of a BIT" could not be acceptedQuestion 92

106. Like the Respondent, the Complainant refers to the Draft Articles of the VCLT drafted by the Commission, but maintains that "Venezuela fails to cite the fundamental part of the report, in which the Commission explains the textual approach applicable to any interpretation of a treaty ⁹³.

⁸⁷ Rejoinder, § 19. ↩

⁸⁸ Dúplica, § 20; citando Sergei Viktorovich Pugachev c. Federación Rusa (CNUDMI), Laudo sobre Jurisdicción, 18 de junio de 2020 (Anexo CLA-173) § 379 ("purpose and context [...] cannot be used to negate the meaning of a treaty provision if that meaning is plain and if the interpretation is consonant with the treaty's object and purpose and any other relevant context"). ↩

⁸⁹ Contestación, § 20; Dúplica, § 15; I. Brownlie, Principles of Public International Law, Oxford University Press, ed. 7, 2008 (Anexo CLA-52) p. 631. Ver también Contestación, § 21; P. Reuter, Introduction to the Law of Treaties, Routledge, 1995 (Anexo CLA-110) §§ 141-142. ↩

⁹⁰ Reply, § 24-26; citing Case of Territorial Dispute (Libya v. Chad), Judgment, 1994 ICJ Reports 6, February 3, 1994 (Annex CLA-109) § 41; Serafin García Armas and Karina García Gruber v. Republic of Venezuela (PCA Case No. 2013-3), Decision on Jurisdiction, December 15, 2014 (Annex CLA-2) §§ 156, 161, 163-164, 166; El Paso Energy International Company Inc. v. Argentine Republic (ICSID Case No. ARB/03/15), Award, October 31, 2011 (Annex CLA-129) § 590. See also Rejoinder, §§ 14-15, 22-24; Sergei Viktorovich Pugachev v. Russian Federation (UNCITRAL), Award on Jurisdiction, June 18, 2020 (Annex CLA-173) §§ 374-376. ↩

⁹¹ Reply, § 28; The Rompetrol Group N.V. v. Romania (ICSID Case No. ARB/06/3), Decision on Objections to Jurisdiction and Admissibility, April 18, 2008 (Annex CLA-124) § 85. ↩

⁹² Contestación, § 29; Dúplica, § 25; Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of China, Limited c. Reino de Bélgica (Caso CIADI No. ARB/12/29), Laudo, 30 de abril de 2015 (Anexo CLA-167) §§ 165-166. ↩

⁹³ Reply, § 22; Rejoinder, §§ 16-17; referring to International Law Commission, Draft Articles on the Law of Treaties with their commentaries, ILC Yearbook, Vol. II (1966) (Annex RLA-67) pp. 220-221. See also Transcript, Day 1, 163:13-21. ↩

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107. Finally, the Claimant refers to Venezuela's claims regarding the total annulment of the arbitral tribunal's decision in the Serafin García Armas case and the 2017 judgment of the Paris Court of Appeal⁹⁴. The Claimant indicates that "the annulment of these decisions was based on other grounds that have nothing to do with the conclusions on the protection of dual nationals in the Treaty, and therefore does not affect either their reasoning or their persuasive value in relation to that issue"⁹⁵ as, he indicates, was recognized by the arbitral tribunal in the case of Sergey Pugachev v. Russia⁹⁶.

2. Textual interpretation of the concept of investor

(i) Position of the Respondent

108. The Defendant submits that the ordinary meaning of the terms of Article I.1(a) indicates that dual nationals cannot be considered investors under Treaty⁹⁷. In particular, the Respondent considers that the use of the term "of one of the Contracting Parties" in that provision, rather than alternative expressions such as "of one or the other" or "of the two Contracting Parties", "highlights the uniqueness required as regards the nationality requirement "⁹⁸. It also refers to the opposition between the expressions "of a Contracting Party" and "of the other Contracting Party",

and the use of the term "and" between them, which, in its view, evidences the need for simultaneous opposition between the State of nationality of the investor and the State where the investment is made⁹⁹.

(ii) Position of the Complainant

109. The Applicant denies that the ordinary meaning of the terms of the Treaty allows it to be concluded that the intention of the Parties was not to grant protection to dual nationals¹⁰⁰. According to the Applicant, the only conditions arising from Article I(1)(a) of the Treaty are to possess the

⁹⁴ See Rebuttal, § 120. ↩

⁹⁵ Rejoinder, § 35; Reply, §§ 155-158. See also Transcript, Day 1, 145:7-16, 193:10-19. ↩

⁹⁶ Rejoinder, § 35; Sergei Viktorovich Pugachev v. Russian Federation (UNCITRAL), Award on Jurisdiction, 18 18, 2020 (Exhibit CLA-173) § 424. ↩

⁹⁷ Memorial, § 26. ↩

⁹⁸ Memorial, § 27; Reply, § 38. ↩

⁹⁹ Reply, §§ 35-36; Memorial, §§ 28-29. ↩

¹⁰⁰ Reply, § 34. ↩

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nationality of one Contracting Party, regardless of whether one is also a national of the other, and having made an investment in the territory of the other Contracting Party¹⁰¹.

110. In response to the Respondent, the Plaintiff argues that the use of the word "a" in the definition of the term investors is not significant, since "a" is an indeterminate or indefinite article that accompanies the words "of the Contracting Parties" but does not indicate a cardinal number¹⁰².

3. Context of the Treaty

(A) Protections (B) the dispute settlement mechanism of the Treaty; and (C) the General Treaty of Cooperation and Friendship between the Kingdom of Spain and the Bolivarian Republic of Venezuela, signed in Madrid on 7 June 1990 (the

"Treaty of Friendship").

(4) Substantive protections of the Agreement and, in particular, the National Treatment Standard

(i) Position of the Respondent

112. First, the Respondent states that, both in the preamble to the Treaty and in Articles II.1, III.1, IV, V.1, XI.1, the use of the contrasting expressions "of one Contracting Party" and "of the other Contracting Party" is repeated¹⁰³. In addition, the Respondent submits that the Complainant's interpretation "renders inoperative the Preamble, Articles II, III, IV, V and XI.4 [sic] of the BIT [...]"¹⁰⁴, as well as Article VII of the Treaty¹⁰⁵, which is contrary to a good faith interpretation¹⁰⁶. For example, it argues that it makes no sense to grant the benefit of the national treatment standard of the

¹⁰¹ Reply, §§ 32, 34; Transcript, Day 1, 144:3-14. ↩

¹⁰² Reply, §§ 32-33; Rejoinder, § 32. ↩

¹⁰³ Memorial, §§ 32, 34-39; Treaty, preamble, arts. II, II, III, IV, V and XI; Reply, § 45. ↩

¹⁰⁴ Reply, § 49. See also Rebuttal, §§ 50-57. ↩

¹⁰⁵ Rebuttal, § 55. ↩

¹⁰⁶ Reply, § 48. ↩

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Article IV.2 (the "National Treatment Standard") to their own nationals, since they "already benefit from national protection by virtue of being nationals of that same State"¹⁰⁷.

113. The Defendant also considers it inadmissible to incorporate elements outside Article 31 CVDT into the interpretation of the Treaty, referring, in particular, to the comparison of treaties concluded by Venezuela and Spain with third States made by the Applicant¹⁰⁸.

(ii) Position of the Complainant

114. First, the Applicant insists that there is no expression in the text of the Treaty that would allow it to conclude that dual national claims are excluded or limited, again rejecting the interpretation put forward by the Respondent regarding the use of the words "of a Contracting Party" and "of the other Contracting Party"¹⁰⁹.

115. With respect to the National Treatment Standard, the Complainant asserts that "such protection seeks to ensure that dual nationals are not discriminated against on the basis of their second nationality" and adds that, even if a treaty protection did not operate with respect to a dual national investor (which it denies is the case with the National Treatment Standard), this does not imply that "such investor should be denied the protection of the entire Treaty"¹¹⁰.

116. The Complainant stresses that if the Parties had wished to exclude dual nationals from the protection of the treaty, they would have done so expressly¹¹¹, as was done in the Additional Protocol to the Venezuela-Italy BIT (1990), the Venezuela-Canada BIT (1996), the Venezuela-Iran BIT (2005), the Venezuela-Argentina BIT (1993) and the Venezuela-Ecuador BIT (1993)¹¹². The first three exclude

¹⁰⁷ Memorial, §§ 41-42. ↩

¹⁰⁸ Reply, §§ 27-29; Transcript, Day 1, 74:16-22, 75:1-6. ↩

¹⁰⁹ Reply, § 83; Rejoinder, § 47. ↩

¹¹⁰ Reply, § 87; Rejoinder, § 50. ↩

¹¹¹ Reply, §§ 34, 46, 53, 59; Rejoinder, § 31; Transcript, Day 1, 151:16-19, 201:5-9. ↩

¹¹² Reply, §§ 47-52; Additional Protocol to the Agreement between the Government of the Italian Republic and the Government of the Republic of Venezuela on the Promotion and Protection of Investments, June 1990 (Annex C-166), clause 1.a; Agreement between the Government of the Republic of Venezuela and the Government of Canada for the Promotion and Protection of Investments, July 1, 1996 (Annex C-195), art. I.g; Agreement on the Promotion and Reciprocal Protection of Investments between the Government of the Bolivarian Republic of Venezuela and the Government of the Islamic Republic of Iran, 11 March 2005 (Annex C-224) art.1.2.a); Agreement between the Government of the Republic of Venezuela and the Government of the Argentine Republic for the Reciprocal Promotion and Protection of Investments, November 16, 1993 (Annex C-332) art. 2.2; Agreement between the Government of the Republic of Venezuela and the Government of the Republic of Ecuador for the Reciprocal Promotion and Protection of Investments, November 18, 1993 (Annex C-333), art. 1.3.c. ↩

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expressly to dual nationals, while the latter two "exclude claims by a national of a State Party who has resided for more than two years in the other State Party where he or she has made his or her investment"¹¹³.

117. The Claimant also refers to the BITs signed by Spain with Uruguay (1992) and Colombia (2007), which expressly exclude dual nationals; the BITs signed with Argentina (1991) and Tunisia (1991), in which the natural person must have both the nationality and residence of a Contracting Party in order to qualify as a protected investor; and the BIT signed with the Dominican Republic (1995), in which residence, and not nationality, is used as a criterion to define whether a natural person is protected by BIT¹¹⁴.

118. The Applicant denies that the comparison with other treaties is an "artificial and sterile" exercise y "without any support in the VCLT", as Respondent¹¹⁵ maintains, and alleges that this analysis has been used by arbitral tribunals in similar cases, citing Serafin García Armas v. Venezuela¹¹⁶, Bahgat v. Egypt¹¹⁷, Pugachev v. Russia¹¹⁸ and Rawat v. Mauricio¹¹⁹ and in other cases¹²⁰, as well as by

¹¹³ Reply, § 52. ↩

¹¹⁴ Reply, §§ 54-58; Agreement for the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Oriental Republic of Uruguay, 7 April 1992 (Annex C-176) art 1.3.c); Agreement between the Kingdom of Spain and the Republic of Colombia for the Reciprocal Promotion and Protection of Investments, 3 September 2007 (Annex C-233), arts. 11.4-11.5; Agreement for the Promotion and Reciprocal Protection of Investments between the Argentine Republic and the Kingdom of Spain, 3 October 1991 (Annex C-171), art. 1.1.a; Agreement for the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Tunisian Republic, 28 May 1991 (Annex C-331), art. 1.a; Agreement for the Reciprocal Protection and Promotion of Investments between the Kingdom of Spain and the Dominican Republic, 16 March 1995 (Annex C-192), art. 1.1.a). ↩

¹¹⁵ Ver Memorial, §§ 110-115. ↩

¹¹⁶ Reply, § 62; Rejoinder, § 44; Serafin García Armas and Karina Garcia Gruber v. Bolivarian Republic of Venezuela (PCA Case No. 2013-3), Decision on Jurisdiction, December 15, 2014 (Annex CLA-2) §§ 180-181. ↩

¹¹⁷ Reply, § 63; Rejoinder, § 44; Mohamed Abdel Raouf Bahgat v. Arab Republic of Egypt (PCA Case No. 2012-07), Decision on Jurisdiction, November 30, 2017 (Annex CLA-168) §§ 221-222. ↩

¹¹⁸ Rejoinder, § 44; Sergei Viktorovich Pugachev v. Russian Federation (UNCITRAL), Award on Jurisdiction, June 18, 2020 (Annex CLA-173) §§ 385-386. See also Reply, § 64. ↩

¹¹⁹ Reply, § 65; Rejoinder, § 44; Dawood Rawat v. Republic of Mauritius (PCA Case No. 2016-20), Award on Jurisdiction, 6 April 2018 (Annex CLA-4/RLA-54) § 170. ↩

¹²⁰ See Reply, §§ 68, 74-76; Rejoinder, § 43. ↩

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the International Court of Justice¹²¹ to interpret the clauses of a treaty, and even by Venezuela itself in several investment arbitrations¹²².

(B) Treaty Dispute Settlement Mechanism

(i) Position of the Respondent

119. The Respondent considers the choice of the International Centre for Settlement of Investment Disputes (the "ICSID") as the first and main forum for dispute settlement (Article XI.2 of the Treaty)¹²³ to be decisive, since ICSID does not admit claims from nationals of the State party to the dispute¹²⁴.

120. The Respondent asserts that ICSID is the first and foremost forum, because the Treaty provides for the possibility of initiating ad hoc arbitration under the UNCITRAL Rules only when ICSID or the ICSID Additional Facility is "for any reason unavailable"¹²⁵. The Respondent considers that the term "for any reason" should be limited to those situations in which ICSID or the Additional Facility is not available due to ICSID¹²⁶ circumstances. According to the Respondent, this stems from the context of the Treaty, since during the negotiation of the Treaty neither Spain nor Venezuela had yet ratified ICSID Convention¹²⁷.

121. According to the Respondent, this is confirmed by the travaux préparatoires of the ICSID Convention, which show that the representatives of Spain and Venezuela objected to a national

¹²¹ Reply, § 77; Rejoinder, § 43; Case concerning Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v. United States of America), Judgment, 1986 ICJ Reports 14, June 27, 1986 (Annex CLA-108) § 222. ↩

¹²² Reply, § 68; Venezuela US, S.R.L. v. Bolivarian Republic of Venezuela (PCA Case No. 2013-34), Interim Award on Jurisdiction, July 26, 2016 (Annex CLA-146) § 57; ConocoPhillips Petrozuata BV et al. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/30), Decision on Jurisdiction and Merits, September 3, 2013 (Annex CLA-78) § 282; Saint-Gobain Performance Plastics Europe v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/12/13), Decision on Liability and the Quantum Principles, December 30, 2016 (Annex CLA-93) §§ 391, 549; Crystallex International Corporation v. Bolivarian Republic of Venezuela (ICSID Case No. ARB(AF)/11/2), Award, April 4, 2016 (Annex CLA-89) § 495; Tenaris S.A. and Talta - Trading and Marketing Sociedade Unipessoal Lda. v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/11/26), Award, January 29, 2016 (Annex CLA-87) § 157. ↩

¹²³ Memorial, § 47; Reply, § 64. ↩

¹²⁴ Memorial, § 44; Reply, § 67; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 18 March 1965 (Annex R-2), art. 25(2)(a). ↩

¹²⁵ Memorial, § 55; Reply, § 71; Transcript, Day 1, 123:8-14, 124:4-17. ↩

¹²⁶ Transcript, Day 2, 309:4-9. ↩

¹²⁷ Transcript, Day 2, 316:14-21. ↩

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could sue his own State before an international forum¹²⁸. Furthermore, in the Respondent's view, it would be absurd to argue "that the term 'investors' would have a different meaning depending on the arbitral forum"¹²⁹, as this would be contrary to the "principle of the inalterability of the terms of the BIT depending on the international forum", which has been recognized by numerous arbitral tribunals¹³⁰. In this regard, the Respondent has particular emphasis on the decisions in the cases of Manuel Garcia Armas et al. v. Venezuela¹³¹, Hermanos Heemsen v. Venezuela¹³² and Dawood Rawat v. Mauricio¹³³. In relation to the latter case, the Respondent rejects the "partial reading" of Claimant¹³⁴, and explains that the arbitral tribunal "resorted to the context of the treaty to determine that, precisely, the term investors did not include dual nationals", giving value to the choice of ICSID as a dispute resolution forum¹³⁵.

122. As regards the case of Pey Casado v. Chile, in which, according to the Applicant, the tribunal "considered that the ICSID Convention did not preclude the recognition of Mr. Pey Casado as an investor protected by the Treaty"¹³⁶, the Respondent states that this" bears no relation to the case at hand" because: (i) Mr. Pey Casado renounced one of his two nationalities before initiating proceedings against Chile¹³⁷; and (ii) unlike the Treaty, "the Chilean BIT invoked by Mr. Pey

¹²⁸ Memorial, § 46; Travaux Travatoires del Convención ICSID, Historia del Convención ICSID, Vol. IV, 1969 original, 2009 reprinted, pp. 87, 164-165 (Annex R-3). ↩

¹²⁹ Rebuttal, § 71. See also Transcript, Day 1, 122:9-11. ↩

¹³⁰ Brief, §§ 50-57, Romak S.A. v. Republic of Uzbekistan (PCA Case No. AA280), Award of November 26, 2009 (Exhibit RLA-8) §§ 193-194 and § 207; Nova Scotia Power Incorporated v. Bolivarian Republic of Venezuela (ICSID Case No. ARB(AF)/11/1), Excerpts from the April 30, 2014 Award (Annex RLA-9) § 80; Dawood Rawat v. Republic of Mauritius (PCA Case No. 2016-20), Award on Jurisdiction, 6 April 2018 (Annex CLA-4/RLA-54) § 179; Enrique Heemsen and Jorge Heemsen v. Bolivarian Republic of Venezuela (PCA Case No. 2017-18), Award of Jurisdiction of October 29, 2019 (Exhibit RLA-4) §§ 413-419; Manuel García Armas et al. v. Bolivarian Republic of Venezuela (PCA Case No. 2016-08), Award on Jurisdiction, December 13, 2019 (Annex RLA-5) §§ 718-723. ↩

¹³¹ Manuel Garcia Armas et al. v. Bolivarian Republic of Venezuela (PCA Case No. 2016-08), Award on Jurisdiction, December 13, 2019 (Annex RLA-5) §§ 721-722. ↩

¹³² Enrique Heemsen and Jorge Heemsen v. Bolivarian Republic of Venezuela (PCA Case No. 2017-18), Award of Jurisdiction (Annex RLA-4) §§ 413-414, 417-419. ↩

¹³³ Dawood Rawat v. Republic of Mauritius (PCA Case 2016-20), Award on Jurisdiction, 6 April 2018 (Annex CLA-4/RLA-54) § 179. ↩

¹³⁴ Memorial, § 105; Transcript, Day 1, 116:12-17. ↩

¹³⁵ Rebuttal, § 122. ↩

¹³⁶ Reply, § 95. ↩

¹³⁷ Memorial, § 106; Reply, § 124; Victor Pey Casado and Fundación Presidente Allende v. Republic of Chile (ICSID Case No. ARB/98/2), Award, May 8, 2008 (Annex CLA-1) §§ 106-112, 252, 287-292 and 322. ↩

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taking into account the circumstances of the case. The Tribunal may also, if it deems it appropriate, apportionment among the Parties the costs of representation and assistance of counsel, as indicated in article 40.2 of the UNCITRAL Rules.

422. Although the Arbitral Tribunal has rightly disagreed with the legal position of the Claimant, it recognizes that the complexity of the arguments and precedents invoked by the Parties constitutes a special circumstance that gives rise to the fact that, without prejudice to the decision on jurisdiction adopted in this award, the Tribunal is in favour of not ordering Mr. Fraiz to pay costs. This means that (i) each Party shall pay its costs for attorneys' fees and expenses (i.e., the costs and expenses incurred by each Party in defending itself in arbitration), while (ii) the common costs shall be divided between them in halves (i.e., the fees and expenses of the arbitrators, the fees of the PCA Secretary General and the PCA, and any other costs that may apply under article 38 of the UNCITRAL Rules). This decision includes the costs associated with the incidents processed during the course of the arbitration.

423. The share of the costs of the arbitration to be shared between the Parties is set out below, as set out in paragraph 422 above.

424. Costs of the Tribunal: According to Article 38(a) of the UNCITRAL Rules, "[t]he arbitral tribunal's fees [shall] be indicated separately for each arbitrator and [shall] be fixed by the tribunal itself in accordance with Article 39." In turn, Article 39 of the UNCITRAL Rules provides: "[t]he arbitral tribunal's fees shall be of a reasonable amount, taking into account the amount in dispute, the complexity of the subject matter, the time spent by the arbitrators and any other relevant circumstances of the case."

425. In accordance with the above-mentioned provisions and section 12 of the Articles of Incorporation, the fees and expenses of the Tribunal are as follows:

a) Dr. Enrique Barros Bourie: USD 265.500,00 (honorarios);

b) Mr. Alexis Mourre: USD 134,550.00 (fees); and

c) Prof. Raúl E. Vinuesa: USD 131,700.00 (fees).

426. Nominating Authority Costs: The non-refundable administrative fee for the Secretary-General of the PCA, who was designated as the appointing authority by agreement of the Parties, to act as the appointing authority, amounts to EUR 3,000.00.

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427. Other costs: The fees of the CPA, which was designated as the administering institution by agreement of the Parties, amount to USD 79,027.20.

428. Other expenses of the Tribunal, including stenography, printing, telecommunications, bank and courier charges, amount to USD 14,071.07.

429. Unspent Balance: The Complainant has made advance payments to the PCA in the amount of USD 700,000.00 to cover the fees and expenses of the Tribunal and the cost of registration services. Of this amount, USD 350,000.00 corresponds to an advance on the portion of the deposit corresponding to the Respondent. The costs paid with the deposit funds total USD 624,794.27. The unused balance on the deposit is USD 75,205.73. Pursuant to section 11.4 of the Articles of Incorporation, the Tribunal orders the PCA to return the unused balance of the deposit to the Applicant (i.e. USD 75,205.73), subject to paragraph 431 below.

430. In accordance with rule 41.5 of the UNCITRAL Rules, the PCA shall provide the Parties with a statement of accounts of the deposits received upon rendering this award.

431. In view of the fact that, by decision of the Respondent, the deposits to cover the costs of the arbitration have been borne exclusively by Claimant⁵⁰⁴, the decision in paragraph 422 (ii) above implies that the Respondent must reimburse the Claimant for 50 per cent of those costs (i.e. USD 312,397.14). To this amount must be added 50 percent of the USD 3,493.50,⁵⁰⁵ paid by the Complainant as a non-refundable fee for the action of the appointing authority (i.e., USD 1,746.75), which in total amounts to USD 314,143.89. Although the Plaintiff requested that the amounts awarded for costs be paid "plus interest,"⁵⁰⁶ the Court will reject that request, considering that the Plaintiff did not justify the admissibility of interest or provide the necessary elements to determine it. The Court will order the Respondent to pay USD 314,143.89 to the Claimant.

⁵⁰⁴ Act of Incorporation, § 11.5.

⁵⁰⁵ Equivalent to EUR 3,000 at the exchange rate applicable on the day on which the Claimant made the payment of this administrative fee (see letter from the Claimant to the PCA of 1 March 2019, Exhibit E).

⁵⁰⁶ Reply, § 231; Plaintiff's Statement of Costs, § 15(b).

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VII. DECISION OF THE ARBITRAL TRIBUNAL

432. For the reasons set forth in this award, the Arbitral Tribunal, by the unanimity of its members, resolves the following:

a) The main argument is accepted as the Objection Ratione Personae raised by the Demanded.

b) As a consequence of the foregoing, it is declared that the Court lacks jurisdiction and jurisdiction to hear and resolve the claims of the Plaintiff.

c) The treatment of the alternative argument of the Objection Ratione is declared unofficial Personae raised by the Defendant.

d) It is declared that each Party shall pay the portion of the costs corresponding to its costs of representation and legal assistance. The remaining portion of the costs of the arbitration, meanwhile, shall be distributed among the Parties in halves, in the terms set forth in paragraphs 422 to 431. As a consequence of the foregoing, the Defendant must pay the Plaintiff USD 314,143.89.

e) Any other request by the Parties that has not been expressly addressed by the Tribunal in this paragraph is rejected.

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Sede del arbitraje: La Haya, Países Bajos

Fecha: 31 de enero de 2022

El Tribunal Arbitral

Signature

Dr. Enrique Barros Bourie
(Árbitro presidente)