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INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

Air Canada

v.

Bolivarian Republic of Venezuela
(ICSID Case No. ARB(AF)/17/1)

PROCEDURAL ORDER NO. 1

Members of the Tribunal
Prof. Pierre Tercier, President of the Tribunal
Dr. Charles Poncet, Arbitrator
Ms. Deva Villanúa Gómez, Arbitrator

Secretary of the Tribunal
Mr. Marco Tulio Montañés-Rumayor

Assistant to the Tribunal
Ms. Maria Athanasiou

12 January 2018

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Introduction

Further to the parties' agreement to extend the 60-day deadline provided for in Article 21 of the Arbitration (Additional Facility) Rules, the first session of the Tribunal was held on December 14, 2017, at 2:00 pm EDT, by telephone conference.

Participating in the conference were:

Members of the Tribunal:
Prof. Pierre Tercier, President of the Tribunal
Dr. Charles Poncet, Arbitrator
Ms. Deva Villanúa Gómez, Arbitrator

ICSID Secretariat:
Mr. Marco Tulio Montañés-Rumayor, Secretary of the Tribunal

Assistant to the Tribunal:
Ms. Maria Athanasiou

Attending on behalf of Claimant:
Mr. Reginald R. Smith, King & Spalding
Ms. Silvia M. Marchili, King & Spalding

Attending on behalf of Respondent:
Dr. Reinaldo Enrique Muñoz Pedroza, Procuraduría General de la República
Mr. Alfredo de Jesús O., De Jesús & De Jesús
Ms. Eloisa Falcón López, De Jesús & De Jesús

Interpreters:
Mr. Daniel Giglio
Mr. Claudio Debenedetti

The Tribunal and the Parties considered the following:

• The Draft Agenda circulated by the Tribunal Secretary on 4 December 2017.
• The Draft Procedural Order No. 1 circulated by the Tribunal Secretary on 4 December 2017.
• The Parties’ comments on the Draft Agenda and the Draft Procedural Order No. 1 received on 12 and 14 December, indicating the items on which they agreed and their respective positions regarding the items on which they did not agree.

The session was adjourned at approximately 3:30 pm EDT.

An audio recording of the session was made and deposited in the archives of ICSID. The recording was distributed to the Members of the Tribunal and the Parties.

Following the session, the Tribunal now issues the present Order:

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Order

Pursuant to Articles 21(1) and 28 of the ICSID Arbitration (Additional Facility) Rules, this first Procedural Order sets out the Procedural Rules that govern this arbitration. The timetable is attached as Annex I.

1. Applicable Arbitration Rules
Article 1, 28(2), 35 and 54 of the ICSID Arbitration (Additional Facility) Rules

1.1. These proceedings are conducted in accordance with the ICSID Arbitration (Additional Facility) Rules in force as of April 10, 2006, the Rules of Procedure contained in this Procedural Order No. 1 and the procedural rulings of the Tribunal taken in accordance with Section 5 of the present Order.

2. Constitution of the Tribunal and Tribunal Members’ Declarations
Article 13 of the ICSID Arbitration (Additional Facility) Rules

2.1. The Tribunal was constituted on September 26, 2017, in accordance with the ICSID Arbitration (Additional Facility) Rules.

2.2. The Members of the Tribunal timely submitted their signed declarations in accordance with Article 13(2) of the ICSID Arbitration (Additional Facility) Rules. Copies of these declarations were distributed to the Parties by the ICSID Secretariat.

2.3. The contact details of the Tribunal Members are as follows:

Prof. Pierre Tercier Chemin Guillaume-Ritter 5 CH-1700 Fribourg Switzerland Tel. +41 26 425 48 48

Dr. Charles Poncet Poncet Sàrl Rue Bovy-Lysberg 2 P.O. Box 5271 1211 Geneva 11 Switzerland Tel. +41 22 404 10 10

Ms. Deva Villanúa Gómez Armesto & Asociados General Pardiñas, 102 8° izda 28006, Madrid Spain Tel. +34 915 621 625

2.4. The Parties confirm that the Tribunal has been properly constituted.

3. Fees and Expenses of Tribunal Members
Administrative and Financial Regulation 14; ICSID Schedule of Fees

3.1. The fees and expenses of each Tribunal Member shall be determined and paid in accordance with the ICSID Schedule of Fees and the Memorandum on Fees and Expenses of ICSID Arbitrators in force at the time the fees and expenses are incurred. Under the current Schedule of Fees, each Tribunal Member receives:

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3.1.1. US$3,000 for each day of meetings or each eight hours of other work performed in connection with the proceedings or pro rata; and

3.1.2. subsistence allowances, reimbursement of travel, and other expenses pursuant to ICSID Administrative and Financial Regulation 14.

3.2. Each Tribunal Member shall submit his/her claims for fees and expenses to the ICSID Secretariat on a quarterly basis.

3.3. Non-refundable expenses incurred in connection with a hearing as a result of a postponement or cancellation of the hearing shall be reimbursed.

4. Presence and Quorum
Articles 22(2) and 28(1) of the ICSID Arbitration (Additional Facility) Rules

4.1. The presence of all Members of the Tribunal constitutes a quorum for its sittings, including by any appropriate means of communication.

5. Decisions and Procedural Rulings of the Tribunal
Articles 24 and 27 of the ICSID Arbitration (Additional Facility) Rules

5.1. Decisions of the Tribunal shall be taken by a majority of the Members of the Tribunal.

5.2. Article 24(2) of the ICSID Arbitration (Additional Facility) Rules applies to decisions taken by correspondence except that where the matter is urgent, the President may decide procedural matters without consulting the other Members, subject to possible reconsideration of such decision by the full Tribunal.

5.3. The President is authorized to issue Procedural Orders and procedural decisions on behalf of the Tribunal, after consulting with the other Members of the Tribunal.

5.4. The Tribunal’s rulings on procedural matters may be communicated to the Parties by the Tribunal Secretary in the form of a letter or email.

6. Power to Fix Time Limits
Article 33 of the ICSID Arbitration (Additional Facility) Rules

6.1. The President may fix and extend time limits for the completion of the various steps in the proceeding.

6.2. In exercising this power, the President shall consult with the other Members of the Tribunal. If the matter is urgent, the President may fix or extend time limits without consulting the other Members, subject to possible reconsideration of such decision by the full Tribunal.

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7. Secretary of the Tribunal
Administrative and Financial Regulation 25

7.1. The Tribunal Secretary is Mr. Marco Tulio Montañés-Rumayor, Legal Counsel, ICSID, or such other person as ICSID may notify the Tribunal and the Parties from time to time.

7.2. To send copies of communications by email, mail, and courier/parcel deliveries to the ICSID Secretariat, the contact details are:

Marco Tulio Montañés-Rumayor
ICSID
MSN J2-200
1818 H Street, N.W.
Washington, D.C. 20433
USA
Tel.: + 1 (202) 458-1932
Email: [email protected]
Paralegal email: [email protected]

7.3. For local messenger deliveries, the contact details are:

ICSID Reception
701 18th Street, N.W. (“J Building”)
2nd Floor
Washington, D.C. 20006
Tel.: + 1 (202) 458-1534

8. Appointment of Assistant to the Tribunal

8.1. The Parties do not object to the appointment of Ms. Maria Athanasiou, an associate in the office of the President of the Tribunal, as an Assistant to the Tribunal.

8.2. The President of the Tribunal shall submit a proposal to the Parties concerning the tasks of said Assistant, including the possibility to reimburse her reasonable out-of-pocket expenses in connection with these proceedings.

9. Representation of the Parties
Article 26 of the ICSID Arbitration (Additional Facility) Rules

9.1. Each Party shall be represented by its counsel (below) and may designate additional agents, counsel, or advocates by notifying the Tribunal and the Tribunal Secretary promptly of such designation.

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10. Apportionment of Costs and Advance Payments to ICSID
Administrative and Financial Regulation 14; Articles 28(1)(f) and 58 of the ICSID Arbitration (Additional Facility) Rules

10.1. The Parties shall cover the direct costs of the proceeding in equal parts, without prejudice to the final decision of the Tribunal as to the allocation of costs.

10.2. By letter of October 2, 2017, ICSID requested that each Party pay US$150,000 to cover the initial costs of the proceeding. ICSID received Claimant’s payment on December 5, 2017. It has yet to receive Respondent’s payment.

10.3. ICSID shall request further advances as needed. Such requests shall be accompanied by a detailed interim statement of account.

11. Seat of Arbitration
Administrative and Financial Regulation 26; Articles 19 and 20 of the ICSID Arbitration (Additional Facility) Rules

11.1. Paris, France shall be the seat of the arbitration.

11.2. The Tribunal may hold hearings in Paris and/or at any other place that it considers appropriate if the Parties so agree.

11.3. The Tribunal may deliberate at any place it considers convenient.

12. Procedural Language(s), Translation and Interpretation
Administrative and Financial Regulation 30(3) and (4); Article 30 of the ICSID Arbitration (Additional Facility) Rules

12.1. English and Spanish are the procedural languages of the arbitration.

For correspondence with or through ICSID Secretariat

12.2. Routine, administrative, or procedural correspondence addressed to or sent by the ICSID Secretariat may be in either procedural language.

For Parties’ Pleadings

12.3. Written requests or applications in English need not be translated into Spanish. Written requests or applications in Spanish shall be translated into English. The English translation shall be submitted within 5 days following the original submission.

12.4. Pleadings, expert opinions and witness statements may be submitted in either procedural language, provided that a translation into the other procedural language is filed within 15 business days thereafter in accordance with § 14 below.

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12.5. Exhibits and legal authorities in English or French need not be translated into Spanish. Exhibits and legal authorities in a language other than English or French must be translated into English. If such document is lengthy and relevant only in part, it is sufficient if only the relevant parts are translated, provided that the Tribunal may require a fuller or a complete translation.

12.6. Translations need not be certified unless there is a dispute as to the translation provided and the Tribunal decides to request a certified translation.

12.7. Documents exchanged between the Parties under § 16 below (Production of Documents), if any, may be produced in the original language and need not be translated.

12.8. Deadlines for reply submissions shall begin to run upon submission of the document they respond to, and not from the date the translation is filed.

For Hearings

12.9. Either English or Spanish may be used during hearings. Simultaneous interpretation from one language into the other language shall be available at all times. Transcripts shall be taken in both languages.

12.10. The testimony of a witness called for examination during the hearing who prefers to give evidence in a language other than a procedural language shall be interpreted simultaneously into both procedural languages.

12.11. The Parties will notify the Tribunal, as soon as possible, and no later than at the pre-hearing organizational meeting (see § 20.1 below), which witnesses or experts require services of interpretation.

12.12. The costs of the interpreter(s) will be paid from the advance payments made by the Parties, without prejudice to the decision of the Tribunal as to which Party shall ultimately bear those costs.

For Tribunal’s Documents Except the Award

12.13. The Tribunal shall make any order or decision in either procedural language.

For Tribunal’s Award

12.14. The Tribunal shall render the Award both in English and in Spanish.

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13. Routing of Communications
Administrative and Financial Regulation 24

13.1. Written communications in the case shall be transmitted by email or other electronic means to the Tribunal, via the Tribunal Secretary.

13.2. Electronic versions of communications ordered by the Tribunal to be filed simultaneously shall be transmitted to the Tribunal Secretary only, who shall send them to the opposing Party and the Tribunal.

13.3. The Tribunal Secretary shall not be copied on direct communications between the Parties when such communications are not intended to be transmitted to the Tribunal.

13.4. The email addresses of the Members of the Tribunal are:

Prof. Pierre Tercier [email protected]

Dr. Charles Poncet [email protected]

Ms. Deva Villanúa Gómez [email protected]

14. Number of Copies and Method of Filing of Parties’ Pleadings
Administrative and Financial Regulation 30; Articles 31 and 32 of the ICSID Arbitration (Additional Facility) Rules

14.1. By the relevant filing date, the Parties shall (i) submit by email to the Tribunal Secretary and the opposing Party an electronic version of the pleading with witness statements, expert reports and a list of exhibits and legal authorities (the “electronic filing”),¹ and (ii) upload the pleading with the supporting documentation to the file sharing platform that will be created by ICSID for purposes of this case 2 business days following the day of the filing.

14.2. Within 3 business days following the electronic filing, the Parties shall courier to the Tribunal Secretary:

14.2.1. one unbound hard copy in A 4 or Letter format (as the case may be) of the entire submission in legal size redwell folders in consecutive order as provided in § 15 below, including signed originals of the pleading, witness statements, and expert reports, together with exhibits (but not including legal authorities);

14.2.2. one hard copy in A5 format of the entire submission including the pleading, the witness statements, and expert reports (but not including legal authorities or exhibits); and

¹ Please note that the World Bank server does not accept emails larger than 25 MB. The Parties shall be responsible for ensuring that their electronic submissions comply with this standard. ↩

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14.2.3. two USB drives, or CD-ROMs or DVDs, each with full copies of the entire submission, including the pleading, the witness statements, expert reports, exhibits and legal authorities.

14.3. Also within 3 business days following the electronic filing, the Parties shall courier to the opposing Party at the addresses indicated at § 9.1 above and to each Member of the Tribunal at the addresses indicated at § 2.3 above:

14.3.1. one hard copy in A4 or Letter format (as the case may be) of the entire submission including the pleading, the witness statements, expert reports and exhibits (but not including legal authorities); and

14.3.2. one minimum USB drive, or CD-ROMs or DVDs, with a full copy of the entire submission, including the pleading, the witness statements, expert reports, exhibits and legal authorities.

14.4. Electronic versions of pleadings shall be text searchable (i.e., OCR PDF or Word).

14.5. Pleadings shall be accompanied by an index hyperlinked to the supporting documentation.

14.6. The official date of receipt of a pleading or communication shall be the day on which the electronic version is sent to the Tribunal Secretary.

14.7. A filing shall be deemed timely if sent by a Party by midnight, Washington, D.C. time, on the relevant date.

15. Number and Sequence of Pleadings
Articles 33 and 38 of the ICSID Arbitration (Additional Facility) Rules

15.1. The arbitration shall proceed in accordance with the Procedural Timetable attached hereto as Annex I, except if the Tribunal, at the reasonable request of any Party or on its own initiative, decides that, for good cause, this Procedural Timetable has to be amended.

15.2. Amendments to the Procedural Timetable will be made by reissuing Annex I.

15.3. The Parties shall abstain from filing submissions other than those foreseen in Annex I, except for good cause and after having obtained prior authorization from the Tribunal.

16. Production of Documents
Article 41 of the ICSID Arbitration (Additional Facility) Rules

16.1. The Parties agree that in case either Party wishes to submit a request for the production of documents, the timeframe contemplated in the Procedural Timetable

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in Annex I shall apply.

16.2. In case either Party submits a request for the production of documents, it shall do so in the form of a “Redfern Schedule” enclosed in the present Procedural Order No. 1 as Annex II.

17. Submission of Documents
Administrative and Financial Regulation 30; Article 32 of the ICSID Arbitration (Additional Facility) Rules

17.1. The Memorial and Counter-Memorial shall be accompanied by the documentary evidence relied upon by the Parties, including exhibits and legal authorities. Further documentary evidence relied upon by the Parties in rebuttal shall be submitted with the Reply and Rejoinder.

17.2. The documents shall be submitted in the manner and form set forth in § 14 above.

17.3. Neither Party shall be permitted to submit additional or responsive documents outside the procedural timetable Annex I, unless the Tribunal determines that exceptional circumstances exist based on a reasoned written request followed by observations from the other Party.

17.3.1. Should a Party request leave to file additional or responsive documents, that Party may not annex the documents that it seeks to file to its request.

17.3.2. If the Tribunal grants such an application for submission of an additional or responsive document, the Tribunal shall ensure that the other Party is afforded sufficient opportunity to make its observations concerning such a document.

17.4. The Tribunal may call upon the Parties to produce documents or other evidence in accordance with Article 41(2) of the ICSID Arbitration (Additional Facility) Rules.

17.5. The documents shall be submitted in the following form:

17.5.1. Exhibits shall be numbered consecutively throughout these proceedings.

17.5.2. The number of each Exhibit containing a document produced by Claimant shall be preceded by the letter “C-” for factual exhibits and “CL-” for legal exhibits containing authorities etc. The number for each Exhibit containing a document produced by Respondent shall be preceded by the letter “R-” for factual exhibits and “RL-” for legal exhibits containing authorities etc.

17.5.3. Each Exhibit shall have a divider with the Exhibit identification number on the tab.

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17.5.4. A Party may produce several documents relating to the same subject matter within one Exhibit, numbering each page of such Exhibit separately and consecutively.

17.5.5. Exhibits shall also be submitted in PDF format and start with the number “C-0001” and “R-0001,” respectively.

17.5.6. Copies of documentary evidence shall be assumed to be authentic unless specifically objected to by a Party, in which case the Tribunal will determine whether authentication is necessary.

17.6. The Parties shall file all documents only once by attaching them to their pleadings. Documents so filed need not be resubmitted with witness statements even if referred to in such statements.

17.7. Demonstrative exhibits (such as PowerPoint slides, charts, tabulations, etc.) may be used at any hearing, provided they contain no new evidence. Each Party shall number its demonstrative exhibits consecutively and indicate on each demonstrative exhibit the number of the document(s) from which it is derived. At the beginning of the respective presentation, the Party submitting such exhibits shall provide them in hard copy to the other Party, the Tribunal Members (3), the Tribunal Secretary and interpreters (1), and subsequently send them by email to the Tribunal Secretary and to the other Party in electronic format.

18. Witness Statements and Expert Reports
Article 32 of the ICSID Arbitration (Additional Facility) Rules

18.1. Witness statements and expert reports shall be filed together with the Parties’ pleadings.

18.2. Neither Party shall be permitted to submit any testimony that has not been filed with the written submissions, unless the Tribunal determines that exceptional circumstances exist based on a reasoned written request followed by observations from the other Party (following the procedure outlined in § 17.3)

18.3. Each witness statement and expert report shall be signed and dated by the witness.

19. Examination of Witnesses and Experts
Article 42 and 43 of the ICSID Arbitration (Additional Facility) Rules

19.1. The rules applicable to the examination of witnesses and experts shall be discussed during the respective Pre-Hearing Organizational Meeting.

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20. Hearing (including Pre-Hearing Organizational Meeting)
Articles 21(2) and 29 of the ICSID Arbitration (Additional Facility) Rules

20.1. At the discretion of the Tribunal after consultation with the Parties, a pre-hearing conference call may be convened in order to resolve any outstanding procedural, administrative, and logistical matters in preparation for the hearing.

20.2. The hearing shall be held at a place to be determined in accordance with § 11 above.

20.3. The hearing shall take place during the time contemplated in the Procedural Timetable enclosed as Annex I.

20.4. The Members of the Tribunal shall endeavor to reserve at least two days after the hearing to determine the next steps and to hold deliberations.

21. Records of Hearings and Sessions
Article 28(1)(g) of the ICSID Arbitration (Additional Facility) Rules

21.1. Sound recordings shall be made of all hearings and sessions. The sound recordings shall be provided to the Parties and the Tribunal Members.

21.2. Verbatim transcripts in the procedural languages shall be made of any hearing other than sessions on procedural issues. Unless otherwise agreed by the Parties or ordered by the Tribunal, the verbatim transcripts shall be available in real-time using LiveNote or similar software and electronic transcripts shall be provided to the Parties and the Tribunal on a same-day basis.

21.3. The Parties shall agree on any corrections to the transcripts within 15 business days of the later of the dates of the receipt of the sound recordings and transcripts. The agreed corrections may be entered by the Parties in the transcripts (“revised transcripts”). The Tribunal shall decide upon any disagreement between the Parties and any correction adopted by the Tribunal shall be entered by the Parties in the revised transcripts.

22. Post-Hearing Memorials and Statements of Costs
Article 58(1) of the ICSID Arbitration (Additional Facility) Rules

22.1. The Tribunal shall consult with the Parties at a later stage of the proceedings on the possibility requiring of Post-Hearing Memorials and on the instructions for the filing of Statements of Costs, at the end of the hearing on the merits at the latest.

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23. Publication
Administrative and Financial Regulation 22, Article 53(3) of the ICSID Arbitration (Additional Facility) Rules

23.1. The Parties shall confirm at a later date whether they consent to the publication of the Award and the decisions on ICSID’s website.

Signature

Prof. Pierre Tercier
President of the Tribunal

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ANNEX I
PROCEDURAL CALENDAR

(in case of no jurisdictional objections and request for bifurcation)*

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* In case of jurisdictional objections and request for bifurcation:

In case Respondent raises jurisdictional objections and files an application for bifurcation, the following procedures shall apply:

a. If the application for bifurcation is submitted before the Counter-Memorial, Claimant shall have a short time-limit to respond to such application; thereafter, the Tribunal will decide.

i. If the Tribunal accepts bifurcation, it will adopt a new Procedural Timetable after consulting with the Parties.

ii. If the Tribunal rejects bifurcation, the agreed Procedural Timetable enclosed as Annex I herein shall apply, including the date for submission of the Counter-Memorial.

b. If the application for bifurcation is submitted with the Counter-Memorial, Claimant shall have a short time-limit to respond to such application; thereafter, the Tribunal will decide. The Procedural Timetable will not be suspended.

i. If the Tribunal accepts bifurcation, it will adopt a new Procedural Timetable after consulting with the Parties.

ii. If the Tribunal rejects bifurcation, the agreed Procedural Timetable enclosed as Annex I herein shall apply, including the possible phase on document production.

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ANNEX II TO PROCEDURAL ORDER NO. 1: REDFERN SCHEDULE FOR DOCUMENT REQUESTS

CLAIMANT’S / RESPONDENT’S REQUESTS