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INTERNATIONAL CENTRE FOR DISPUTE RESOLUTION
Case Number 01-20-0015-3123
BETWEEN:
PERIMETRAL ORIENTAL DE BOGOTA, S.A.S.
AND SHIKUN & BINUI VT AG,
Claimants
-and-
AGENCIA NACIONAL DE INFRAESTRUCTURA [COLOMBIAN NATIONAL
INFRASTRUCTURE AGENCY]
Respondent
Arbitral Tribunal:
Elina Mereminskaya (Arbitrator)
Cristián Conejero (Arbitrator)
Eduardo Palmer (President of the Arbitral Tribunal)
18 December 2024
Bogotá, Colombia
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| EER Minutes | Minutes of 1 August 2018 by which the Parties recognized the existence of the EER of UFs 4 and 5 |
| ANI | [Agencia Nacional de Infraestructura] Colombian National Infrastructure Agency |
| ANLA | [Autoridad Nacional de Licencias Ambientales] Colombian National Environmental Licensing Authority |
| PPP | [Asociación Público-Privada] Public-Private Partnership |
| Arbitration | The present case, ICDR arbitration number 01-20-0015-3123 |
| Emergency Arbitrator | Salvador Fonseca González |
| Evidentiary Hearing or Final Hearing | The hearing held between 12 December and 16 December 2022 |
| Capex | Term derived from “capital expenditure" |
| CAR | [Corporación Autónoma Regional de Cundinamarca] Regional Autonomous Corporation of Cundinamarca |
| ICDR | International Centre for Dispute Resolution |
| Arbitration Clause | Section 15.3 of the Concession Agreement 002 of 2014 |
| CONPES | [Consejo Nacional de Política Económica y Social] Colombian National Council for Economic and Social Policy |
| Concession Agreement or Agreement | Concession Agreement 002 of 2014 |
| Corporinoquía | [Corporación Autónoma Regional de la Orinoquía] Regional Autonomous Corporation of Orinoquia |
| Respondent | ANI |
| Claimants | POB and S&B |
| EER | [Evento Eximente de Responsabilidad] Exemption of Liability Event. |
| EER-UF2 | EER derived from the existence of archaeological pieces between K5+650 and K5+800 (location known as El Divino Niño) and K8+890 (location known as Hacienda los Alcaparros) of UF2 |
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| The Concessionaire | Perimetral Oriental de Bogotá S.A.S. |
| S&B Plural Structure | Together, S&B, and the company C.I. Grodco en C.A., Ingenieros Civiles, and the company Colombiana de Inversiones de Infraestructura S.A.S. |
| ICANH | [Instituto Colombiano de Antropología e Historia] Colombian Institute of Anthropology and History. |
| IFC | International Finance Corporation |
| Interventions | Construction, Rehabilitation and/or Improvement Works, necessary for the fulfillment of the Concessionaire's obligations |
| Award or Partial Award | This partial final award on jurisdiction, liability and damages |
| Provisional Award | The provisional award issued on 9 February 2021 by the Emergency Arbitrator to decide the Request for Emergency Measures |
| Law 1536 of 2012 | The law “whereby the National and International Arbitration Statute is issued and other provisions are enacted" |
| O&M | Operation and Maintenance Works |
| PAGA | [Programas de Adaptación a la Guía Ambiental] Environmental Guide Adaptation Programs |
| Parties | Together, the Claimants and the Respondent |
| РОВ | The Concessionaire |
| PQR | [Preguntas, Quejas y Reclamos] Questions, complaints and claims from members of the community surrounding the Project. |
| Project | Activities, goods, services, obligations and rights necessary for the financing, construction, rehabilitation, improvement and operation of the Eastern Perimetral Highway corridor of Cundinamarca (vía Perimentral del Oriente de Cundinamarca). |
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| S&B | Shikun & Binui VT AG |
| UF | [Unidades Funcionales] Functional Units |
| UF 2 | Functional Unit 2 |
| UFs 4 and 5 | Functional Units 4 and 5 |
| VPIP | [Valor Presente por Ingresos de Peaje] Present Value of Toll Revenues |
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1. This arbitration award is issued in the arbitration Case Number 01-20-0015-3123 of the International Centre for Dispute Resolution (“ICDR”) and it constitutes a final partial award on jurisdiction, liability and damages (“Award” or “Partial Award”).
2. The Claimants in this arbitration are:
Calle 93 No 11A-28, Office 701
Bogotá D.C., Colombia
Bachstrasse 56, 8200 Schaffhausen
Swiss Confederation
3. The Claimants are represented in the arbitration by:1
Rafael Rincón Ordóñez
Miguel Castro Muñoz
Santiago Suárez Chaves
Ana María Rincón
Santiago Vernaza Civetta
RINCÓN CASTRO ABOGADOS, S.A.S.
1 Initially, the representatives of the Claimants were part of the firm Zuleta Abogados y Asociados S.A.S., and Dr. Eduardo Zuleta Jaramillo was part of the representatives of the Claimants. Afterwards, the firm Rincón y Castro Abogados was created, and Messrs. Rafael Rincón and Miguel Castro remained as representatives of the Claimants, while Eduardo Zuleta left his role as counsel for the Claimants. This Award sets forth the name of the law firm and the current email addresses of the Claimants' representatives. ↩
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Carrera 7 # 75-51, Edificio Terpel, Office 502
Bogotá, D.C., Colombia
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
4. The Respondent in this arbitration is:
The National Infrastructure Agency (“ANI” or the “Respondent”).
5. The Respondent is represented in this arbitration by:
Yesenia Paba
Fernando Augusto Ramírez Laguado
Nerly Rocio Pinzon Florez
AGENCIA NACIONAL DE INFRAESTRUCTURA - ANI
Calle 24 A # 59 – 42, Building T3 Tower 4 Floor 2
Ciudadela Empresarial Sarmiento Angulo
Bogotá D.C., Colombia
[email protected]
[email protected]
[email protected]Carlos Ortegón Pulido
María Torres Castro
María Fernanda Sánchez
ORTEGÓN & PULIDO
Calle 73 No. 9 - 42 Office 207 Nepal Building
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Bogotá D.C., Colombia
[email protected]
[email protected]
[email protected]
6. For purposes of reference, the Claimant and the Respondent will be referred to collectively as the “Parties”.
7. The Concession Contract under the PPP Scheme No. 002 which the Parties concluded on 8 September 2014 (the “Agreement”) establishes the following in its General Part, Section 15.3:
15.3 International Arbitration2
(a) Any dispute arising between the Parties in connection with this Contract shall be decided by an International Arbitral Tribunal in accordance with Article 62(c) of Law 1563 of 2012 and the rules set forth below.
(b) The final decisions of the amiable compositeur [amigable componedor] may also be submitted to it, in accordance with what is established for the purposes of a settlement in the [sic] Applicable Law.
(c) The international arbitration shall be administered by the International Centre for Dispute Resolution (ICDR), in accordance with its International Arbitration Rules, as well as the following terms:
- The seat of arbitration shall be Bogotá, Colombia.
2 In the event that the winning bid has direct or indirect foreign investment, the compromissory clause of the Agreement shall only be the one regulated in section 15.3. However, if the arbitrators or any authority with jurisdiction to do so, declare that, for this Agreement, the legal grounds for international arbitration do not exist, the national arbitration provided in Section 15.2 above shall be deemed as agreed upon. ↩
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- The language of the arbitration shall be Spanish.
- The law applicable to the Agreement shall be the Colombian law in force at the time of the execution of the Agreement as well as the procedural rules of the law, applicable to the dispute.
- The tribunal shall be appointed by the Parties based on a list drawn up by the ICDR, which shall take into account the observations of qualification and experience reported by the Parties. In the event that the Parties fail to reach an agreement, the ICDR shall be responsible for appointing all arbitrators, in accordance with its regulations.
- Once the request for arbitration has been filed by one of the Parties, the summoning Party shall additionally notify the Ombudsmen Office [Procuraduría General de la Nación], which may intervene in the proceedings through its agents as it does in domestic arbitration, as well as the Colombian National Legal Defense Agency, which may intervene in the arbitration proceedings through a representative on behalf of ANI or as a mere intervening party, enjoying in this case the same powers, rights and procedural and evidentiary guarantees of the Parties.
- The arbitrators shall decide according to the law.
- The fees of the international arbitral tribunal shall be limited to the same amounts as those set forth in Section 1.52(f) of this General Part, unless the Parties agree to modify such amounts.
- The same provisions contained in Section 15.2(h) shall apply to the arbitrators of the International Arbitral Tribunal and the provisions contained in Sections 15.2(i) and 15.2(j) of this General Part shall apply to international arbitration.
(d) The initiation of the arbitration proceedings shall not impair the exercise of exceptional powers available to ANI under the Agreement and the Applicable Law. Administrative acts resulting from the exercise of such powers may not be submitted to
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arbitration because they fall under the jurisdiction of the contentious-administrative jurisdiction.
(e) The Parties agree that in the event that the Arbitral Tribunal is convened, the effects of the arbitration clause shall be extended to those companies, corporations or individuals that have jointly submitted the Tender Bid, to the extent that such parties gave their consent by reference at the time of the submission of the Tender Bid.
(f) The initiation of the arbitration proceedings does not entitle the parties to unilaterally suspend the performance of the obligations of the Agreement.
8. Pursuant to Section 15.3 of the Agreement, the Applicable Law is Colombian law.
9. Pursuant to Section 15.3 of the Agreement, the applicable procedural rules are those contained in the ICDR International Dispute Resolution Procedures, Rules as Amended and in Force as of 1 June 2014 (the “Rules”).
10. Pursuant to Section 15.3 of the Agreement, the seat of arbitration is Bogotá, Colombia.
11. Pursuant to Section 15.3 of the Agreement, the language of the arbitration is Spanish.
12. The Arbitral Tribunal is composed of the following members:
Elina Mereminskaya – co-arbitrator
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Independent Arbitrator, Santiago, Chile.
[email protected]Cristián Conejero – co-arbitrator
Av. Nueva Costanera 3300, 4th floor Vitacura, Santiago, Chile.
[email protected]Eduardo Palmer - President
2601 South Bayshore Drive, Penthouse 1
Miami, Florida 33133
[email protected]Paula C. Arias – Administrative Secretary
1311 Miller Drive, Miami, Fl. 33146
[email protected]
13. On 16 October 2020, the Claimants filed their Notice of Arbitration with the ICDR, based on the compromissory clause contained in Section 15.3 of the Agreement (the “Compromissory Clause”).
14. The ICDR assigned the number 01-20-0015-3123 to the present arbitration (the "Arbitration").
15. On 5 November 2020, ANI requested a 90-day extension to submit its response to the Notice of Arbitration. After reviewing comments on the matter submitted by
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both ANI and the Claimants, the ICDR decided to grant a 60-day extension by email dated 9 November 2020.
16. On 13 January 2021, the Claimants filed the Request for Interim Measures consisting in ordering ANI the following: (a) to refrain from taking any action that affects the proper course of the Arbitration or that would render the final award ineffective; (b) to take all necessary steps to ensure that the Sanctioning Proceedings do not obstruct this Arbitration, aggravate the dispute or render the final award ineffective; (c) to refrain from declaring any breaches and/or imposing fines on POB in connection with any proceedings relating to the subject matter of this Arbitration, including the Sanctioning Proceedings, until a final award is rendered; (d) to refrain from initiating new administrative proceedings related to the subject matter of this Arbitration, until a final award is rendered; and (e) if, at the time the Measures are adopted, any sanctioning decision related to the subject matter of the Arbitration is in force, including in the Sanctioning Proceedings, to suspend the execution of the respective administrative act (the “Request for Measures”).
17. On 18 January 2021, the Respondent filed its Reply to the Request for Arbitration and its Counterclaim.
18. On 15 January 2021, Salvador Fonseca González was appointed by the ICDR as Emergency Arbitrator in the proceedings and issued Procedural Order No. 1. (the "Emergency Arbitrator”). On that same day the Emergency Arbitrator held a preliminary conference with the Parties and the ICDR. Likewise, on the same date, the Procedural Calendar for the Request for Measures was established.
19. On 27 January 2021, the Respondent filed a Reply to the Request for Measures, in which it argued, in summary: (i) that ANI has the duty to seek compliance with the purposes of the State; (ii) that the public administration is vested with exorbitant powers to protect the collective interest; (iii) that the sanctioning power of the authorities ensures the achievement of the State's purposes; (iv) that Article 17 of Law 1150 of 2007 entitles ANI to impose fines; (v) that Article 86 of
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Law 1474 of 2011 establishes a legal mandate to compel contractors to comply with the agreed terms; (vi) the Agreement establishes that ANI may impose fines to POB to compel it to comply with its obligations; (vii) Section 15.3(d) of the Agreement does not impair ANI's powers; (viii) the requirements to grant the measures set forth in the Arbitration Law, the Code of Administrative and Contentious Proceedings and the Rules are not met; among others. Likewise, ANI objected to the jurisdiction and competence of the Emergency Arbitrator, in the same terms as it did previously in the Arbitration.
20. On 1 February 2021, the hearing with the Parties and the Emergency Arbitrator took place, in which the Parties presented their positions regarding the Request for Measures.
21. On 9 February 2021, the Emergency Arbitrator issued the Provisional Award whereby he ruled that he had jurisdiction and competence. Likewise, he granted the interim measures, ordering ANI to refrain from declaring POB in default and from imposing and/or enforcing fines on POB in the Sanctioning Proceedings or in any future sanctioning proceedings against POB related to the subject matter of the Arbitration (the “Provisional Award"), until a final award was issued settling the dispute under Arbitration.
22. The ICDR determined, pursuant to Article 11 of the Rules, that the disputes in this arbitration would be decided by a tribunal comprised of three members, Elina Mereminskaya, Cristián Conejero and Eduardo Palmer.
23. On 3 June 2021, the ICDR stated that it had received no objections to these appointments and therefore confirmed the appointment of the members of the Arbitral Tribunal and determined that Eduardo Palmer would act as President of the Arbitral Tribunal.
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24. On 17 June 2021, the Arbitral Tribunal issued Procedural Order No. 2, in which it summoned the Parties to a Preliminary Hearing in order to agree on certain matters relating to the conduction of the Arbitration.
25. On 25 June 2021, the Arbitral Tribunal held the Preliminary Hearing with the representatives of the Parties. Appearing for the Claimants were counsel Miguel Castro, Sebastián Briceño and Rafael Rincón. Counsel Maria Torres appeared on behalf of the Respondent.
26. Based on the discussions between the Parties and the Tribunal at said Preliminary Hearing, as well as on the communication sent by the Claimants dated 24 June 2021, and confirmed by the Respondent on the same date, the Arbitral Tribunal issued Procedural Order No. 3, dated 19 July 2021, whereby the rules of procedure of the Arbitration and the Procedural Timetable were established. Likewise, at the Preliminary Hearing, and as set forth in Procedural Order No. 3, the Parties accepted the appointment of Paula Arias as Secretary of the Tribunal, to perform the functions set forth in Procedural Order No. 2.
27. On 19 November 2021, the Claimants filed their Statement of Claim and the Respondent filed its Statement of Counterclaim.
28. On 28 February 2022, the Claimants filed their Response to the Statement of Counterclaim and the Respondent filed its Response to the Statement of Claim.
29. On 18 March 2022, both Parties filed their Request for Production of Documents in Redfern Schedule format. On 8 April 2022, the Parties submitted Objections to the Request for Production of Documents. On 22 April 2022, the Parties submitted their respective responses to the Objections to the Request for Production of Documents.
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30. On 11 May 2022, the Arbitral Tribunal issued Procedural Order No. 4, in which it summoned the Parties to a conference to review procedural issues and to organize the following phases, as well as to ask questions about the Redfern Schedules of each of the Parties.
31. The aforementioned conference took place with the Arbitral Tribunal and the Parties on 18 May 2022. Counsel Rafael Rincón and the team of Zuleta Abogados Asociados appeared on behalf of the Claimants. Counsel Carlos F. Ortegón, María Torres and Rocío Pinzón appeared for the Respondent.
32. On 2 June 2022, the Arbitral Tribunal issued Procedural Order No. 5, defining the date of the Final Hearing and amending the date of the Procedural Timetable regarding the Arbitral Tribunal's decision on the Objections to the Request for Production of Documents.
33. Likewise, through Procedural Order No. 5, the Arbitral Tribunal decided on the Requests for Production of Documents (Redfern Schedules) submitted by each of the Parties and the individual Objections, as well as the reasons given.
34. On 19 July 2022, Procedural Order No. 6 was issued, granting the Claimants' request to order the Respondent to produce the documents required under Procedural Order No. 5, or to certify that such documents do not exist or that they are not in its possession or custody. Likewise, an extension was granted for the submission of the Reply and Rejoinder Memorials.
35. On 29 July 2022, Procedural Order No. 7 was issued, in which aspects related to the compliance with the production of documents required by Procedural Order No. 5 were decided and an extension was granted for the filing of the Reply and Rejoinder Memorials.
36. On 5 August 2022, Procedural Order No. 8 was issued, in which aspects related to the compliance with the production of documents required under Procedural Orders No. 5 and 6 were decided, and an extension was granted for the filing of the statement
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of undisputed facts to be submitted jointly by the Parties.
37. On 16 August 2022, the Claimants filed their Reply and the Respondent filed its Reply on the Counterclaim.
38. On 15 September 2022, Procedural Order No. 9 was issued, deciding on the Claimants' communication dated 19 August 2022, in which they requested to exclude certain evidence submitted by the Respondent together with its Reply on the Counterclaim. Likewise, due to the time spent on the exchange of communications regarding the admissibility of such evidence, a new extension was granted for the submission of the Rejoinder Briefs and the Parties were invited to agree on the necessary and prudent extension period.
39. In the absence of agreement between the Parties on the date for filing the Rejoinder Briefs, on 30 September 2022, the Arbitral Tribunal issued Procedural Order No. 10, setting the date for filing the Rejoinder Briefs for 2 November 2022, maintaining the date set for the Final Hearing.
40. On 2 November 2022, the Claimants filed their Rejoinder on the Counterclaim and the Respondent filed its Rejoinder.
41. On 20 November 2022, Procedural Order No. 11 was issued, deciding the evidentiary challenge to the Claimants' Rejoinder filed by the Respondent on 9 November 2022, and opposed by the Claimants on 11 November 2022. By means of the same Procedural Order No. 11, the Arbitral Tribunal admitted the three expert reports, CER-006, CER-007 and CER-008, submitted by the Claimants in their Rejoinder. Likewise, the Respondent was granted a period up to 2 December 2022 to respond to the analysis contained in expert report CER-008.
42. On 21 November 2022, a remote hearing was held with the Parties and the Arbitral Tribunal, in which, among other things, the Parties were instructed to convene in order
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to agree on the pending issues between them in view of the Final Hearing. By email of the same date, the Parties informed the Arbitral Tribunal of the following agreements reached: (i) the Final Hearing would take place in Bogotá, D.C.; (ii) the Parties would submit to the Arbitral Tribunal a brief with the stipulation of the undisputed facts; and (iii) they would send the agreed schedule for the development of the Final Hearing, which would take place between 12 and 16 December 2022.
43. On 23 November 2023, Procedural Order No. 12 was issued, whereby it ruled on the commencement of a actio popularis brought against the Respondent, as well as on the Notice of Disregard of the Provisional Award, filed by the Claimants on 17 November 2022, and answered on 18 November 2022. Procedural Order No. 12 confirmed the final, valid and binding nature of the Provisional Award. It also fixed the dates of the Final Hearing between 12 December and 16 December 2022, as previously agreed by the Parties and decided by the Arbitral Tribunal.
44. On 29 November 2022, the Parties submitted to the Arbitral Tribunal a memorial with two exhibits filed by mutual agreement of the Parties.
45. On 2 December 2022, the Respondent filed a memorial in response to ANI's Funding Report, in accordance with the term granted for such purpose in Procedural Order No. 11.
46. On 6 December 2022, the Arbitral Tribunal acknowledged receipt of the Brief submitted jointly by the Parties and considered the evidence submitted as attached.
47. By e-mail dated 7 December 2022, the Parties sent to the Arbitral Tribunal the Written Statement of Undisputed Facts.
48. By communication dated 8 December 2022, the Parties referred to the Arbitral Tribunal certain procedural aspects of the Final Hearing for its decision, such as the preparation of a hearing protocol, dates and deadlines for the delivery of the power
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point presentations, the possibility of suspending the Final Hearing for possible COVID-19 infections, among others. These matters were decided on Procedural Order No. 13 dated 10 December 2022.
49. On 11 December 2022, the Parties sent to the Arbitral Tribunal the schedule of the Final Hearing.
50. The Final Hearing took place between 12 and 16 December 2022, between 10:00 a.m. and 6:00 p.m., local time, at the Arbitration and Conciliation Center of the Bogotá Chamber of Commerce, located at Calle 76 #11-52 in Bogotá, Colombia.
50. The following persons appeared at the Final Hearing: (a) the Arbitral Tribunal, composed of Elina Mereminskaya; Cristián Conejero and Eduardo Palmer, as President of the Arbitral Tribunal, as well as Paula Arias as Administrative Secretary; (b) Rafael Rincón, Miguel Castro, Santiago Vernaza, Ana María Rincon, Santiago Suarez, José David López, Adriana Triana, Tomer Ginesin and Mr. Néstor [last name not recorded], CEO of POB, on behalf of the Claimants; and (c) on behalf of the Respondent: Carlos Felipe Ortegon, Jesus Valbuena, Maria Torres and Rocio Pinzon.
51. The hearing began with opening statements from each of the Parties, lasting 90 minutes.
52. Then, the Parties presented their fact witnesses and expert witnesses according to the schedule of the Final Hearing previously sent by the Parties to the Arbitral Tribunal.
53. The Arbitral Tribunal heard: (a) the witness presented by the Claimants: Luis Ernesto Pérez; (b) the witnesses presented by the Respondents: Natalia Mayorga, Eduardo Román and Álvaro Durán; (c) the legal expert presented by the Claimants: Gonzalo Suárez; (d) the expert witnesses presented by the Claimants: Hernando Torres, Edinson Arias, Juliette Fortin, Tatiana Santa Rios, Gabriel Medina Moncayo, Juan
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Carlos Valenzuela; and (e) the expert witness presented by the Respondent: Guillermo Sarmiento.
55. During the course of the Final Hearing, the Parties reached certain agreements to advance the proceedings after the Hearing, which were set forth by the Arbitral Tribunal in Procedural Order No. 14 dated 20 December 2022. The Tribunal informed the Parties during the Final Hearing and in Procedural Order No. 14 that the file would remain open under Article 27 of the Rules for the purpose of advancing the proceedings after the Final Hearing.
56. By Procedural Order No. 14, the Arbitral Tribunal granted the Respondent, in accordance with the opportunity offered by the Claimants, until 23 December 2022 to inform whether it would avail itself of the opportunity to contradict the CER-008 report and the time it would need to exercise that right. Likewise, the deadlines were set for the proceedings after the Final Hearing, consisting of (1) the questions that the Arbitral Tribunal would submit to the Parties; (2) the submission of the post-hearing briefs; and (3) a hearing for closing arguments.
57. On 18 January 2023, pursuant to the provisions of Procedural Order No. 14, the Arbitral Tribunal issued Procedural Order No. 15, whereby the Arbitral Tribunal formulated the request for additional information and the questions it deemed necessary to put to the Parties after the Final Hearing.
58. As of 23 January 2023, the Respondent did not report whether it was interested in using the opportunity to contradict the CER-008 report.
59. On 28 February 2023, the Parties submitted their post-hearing briefs.
60. On 18 May 2023, the Closing Arguments Hearing was held virtually.
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61. On 19 June 2023, the Arbitral Tribunal issued Procedural Order No. 16, rejecting the Claimants' request to provide new evidence, and dismissing the Respondent's request that the Tribunal decline jurisdiction since the arbitral proceedings had expired. The Tribunal noted that under Article 27 of the ICDR Rules, the Final Hearing had been kept open and the Tribunal had jurisdiction to decide the case.
62. In the same Procedural Order No. 16, the Arbitral Tribunal reaffirmed that the Tribunal would render two awards, a final partial award on jurisdiction, liability and damages, and then a final partial award on interest and costs of the arbitration. In view of the foregoing, the Final Hearing was kept open for the purpose of resolving questions or requesting clarifications necessary to the Parties for the preparation of this Partial Award on jurisdiction, liability and damages, and to be able to request, a posteriori, the position of the Parties on the matter of interest and costs, and to be able to prepare the final partial award on interest and costs.
63. On 1 December 2023, the Arbitral Tribunal issued Procedural Order No. 17, by which it requested the Claimants to "submit a disaggregated calculation for each of the Functional Units 1, 2, 3, 4 and 5" using the same methodology applied in their previous expert reports, and, if necessary, to attach an expert report in order to present such amounts. The Respondent, in turn, could submit a response to such calculation, and could also attach an expert report analyzing and challenging the amounts presented by the Claimants. Procedural Order No. 17 also indicated that the Final Hearing would remain open, as provided in Procedural Order No. 16, for the same purposes.
64. Pursuant to Procedural Order No. 17, on 15 January 2024, the Claimants filed a submission accompanied by FTI's Fourth Expert Opinion (Exhibit CER- 009). On 1 March 2024, the Respondent filed its response to Exhibit CER-009 accompanied by an expert opinion challenging that exhibit.
65. On 18 March 2024, pursuant to Procedural Order No. 17, the Arbitral Tribunal issued Procedural Order No. 18, by which it granted Claimants leave to file their Reply to
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the Respondent's Counter-memorial to the calculations and related expert opinion filed on 1 March 2024. The Respondent, in turn, could file a Rejoinder. The Tribunal also reserved the right to convene another session of the Final Evidentiary Hearing to clarify issues related to damages calculations and the evidence supporting them.
66. Pursuant to Procedural Order No. 18, on 12 April 2024, the Claimants filed a submission accompanied by FTI's Fifth Expert Opinion (Exhibit CER-010). On 7 May 2024, the Respondent filed its response to Exhibit CER-010 accompanied by an expert opinion challenging that exhibit.
67. On 4 June 2024, the Arbitral Tribunal issued Procedural Order No. 19, based on the reservation made to keep the Final Hearing open, whereby it set a remote hearing with the presence of the experts of both Parties. At the hearing each Party would have the opportunity to present its closing arguments and to clarify and/or challenge the observations and conclusions presented in the reports submitted pursuant to Procedural Orders Nos. 17 and 18.
68. On 26 June 2024, the hearing convened by Procedural Order No. 19 was held. At the conclusion of this hearing, the Tribunal again confirmed that the file would remain open to continue evaluating the evidence and arguments to render the partial award on liability and damages, and subsequently another on arbitration costs.
69. On 5 July 2024, within the time frame established at the hearing, the Claimants noted the specific location in the record of the evidence associated with the UF2 Archaeological Claim.
70. On 12 July 2024, the Respondent submitted its statement regarding the Claimants' brief dated 5 July 2024.
71. On 26 July 2024, the Parties sent to the Arbitral Tribunal the transcript of the hearing of 26 June 2024.
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72. This Section describes the essential facts of the Arbitration, as derived from the Memorials of each of the Parties, as well as from the Statement of Undisputed Facts submitted jointly by the Parties.
73. The Colombian State is the owner of the national road network and is primarily responsible for its construction, rehabilitation and maintenance. In order to fulfil its legal obligations in relation to this infrastructure, it has the power to enter into concession agreements for private parties to carry out these tasks, under the terms and conditions provided for by the law and in the agreement. The entities must determine that the agreements can be performed before initiating the corresponding tenders.3
74. By Resolutions 1187 of 29 October 2013 and 1267 of 5 November 2013, ANI ordered the opening of the selection process for Public Tender No. VJ-VE-IP-LP-010-2013, whose purpose was to satisfy the need for public transportation service between the municipality of Sopó and the municipality of Cáqueza, connecting with the Bogotá - Villavicencio highway.4
75. In 2013, ANI published the public-private partnership (“PPP”) public initiative project for the design, construction, operation, financing and hand-back of the Eastern Perimetral Highway of Cundinamarca (vía Perimentral del Oriente de Cundinamarca) (the “Project”). The Project consisted of the rehabilitation and improvement of an existing road corridor, plus the construction of an additional road, in the east of Bogotá D.C. In total, the Project would have a total length of approximately 153 kilometers, divided into five Functional Units (“UFs”).5
3 Written Statement of Undisputed Facts, ¶¶ 11-12. ↩
4 ANI Statement of Counterclaim, ¶ 1. ↩
5 Written Statement of Undisputed Facts, ¶ 4; POB & S&B Statement of Claim, ¶ 3; ↩
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76. According to both Parties, ANI structured the Project, determined that the Project was feasible and, therefore, on 29 October 2013, opened the public tender for the Project (the "Tender").6
77. During the Tender, ANI published the following documents:7
6 Written Statement of Undisputed Facts, ¶¶ 13, 15; POB and S&B Statement of Claim, ¶ 120. ↩
7 Written Statement of Undisputed Facts, ¶¶ 4, 16. ↩
8 POB and S&B Statement of Claim, ¶ 107. ↩
9 POB and S&B Statement of Claim, ¶ 108. ↩
10 ANI Reply on the Counterclaim, ¶ 134. ↩
11 POB and S&B Statement of Claim, ¶ 117. ↩
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78. The plural structure formed by S&B, the company C.I. Grodco en C.A., Ingenieros Civiles, and the company Colombiana de Inversiones de Infraestructura S.A.S. "Plural Structure S&B") expressed interest in being preselected. ANI, through Resolution No. 823 of 29 July 2013 included it in the list of Prequalified Bidders.12
79. During the Tender, the Plural Structure S&B made more than 60 observations on its contents and visited the Project site to verify its general conditions.13
80. On 30 May 2014, the Plural Structure S&B submitted its Tender Bid (the “Bid”).14 By Resolution No. 922 dated 23 July 2014, ANI declared that the Plural Structure S&B was the winner of the Tender.15
81. In compliance with the Bidding documents, the companies comprising the Plural Structure S&B, as shareholders, incorporated POB on 20 August 2014.16
82. The Parties signed the concession agreement No. 004 of 2014, dated 8 September 2014 (the "Agreement” or the “Concession Agreement”).17
12 POB and S&B Statement of Claim, ¶ 107. ↩
13 Written Statement of Undisputed Facts, ¶ 17. ↩
14 POB and S&B Statement of Claim, ¶ 124. ↩
15 POB and S&B Statement of Claim, ¶ 125. ↩
16 Written Statement of Undisputed Facts, ¶ 18; POB and S&B Statement of Claim, ¶¶ 5, 41, 126. ↩
17 POB and S&B Statement of Claim, ¶¶ 41, 127; ANI Statement of Counterclaim, ¶ 4. ↩
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83. According to both Parties, the performance of the Agreement for the development of the Project is divided into three Stages:18
84. During the Construction Phase, which takes place in the Pre-Operational Stage, there are different types of interventions carried out by the Concessionaire. In accordance with Section 4.1 of Technical Appendix 1, interventions are all Construction, Rehabilitation and/or Improvement works necessary for the fulfillment of the Concessionaire's obligations (“Interventions”).19 The Interventions provided for each of the five UFs are described in Technical Appendix 1.20
85. In turn, according to both Parties, the O&M activities in the Pre-Operational Stage required of the Concessionaire are those required to maintain the road corridor in
18 Written Statement of Undisputed Facts, ¶ 5; POB and S&B Statement of Claim, ¶¶ 128-134. ↩
19 Written Statement of Undisputed Facts, ¶¶ 6-7; POB and S&B Statement of Claim, ¶ 135. ↩
20 Written Statement of Undisputed Facts, ¶¶ 6-7; POB and S&B Statement of Claim, ¶ 137. ↩
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adequate conditions during the Pre-Operational Stage of the corresponding UFs, in compliance with the provisions of the Agreement.21
86. The Concessionaire's remuneration, called Compensation [Retribución] in the Concession Agreement, has three components: ANI Contributions, Toll Collection and Commercial Exploitation Income (“Retribution").22
87. UFs 4 and 5 represent approximately 58% of the Retribution, being the most significant UFs of the Project and those that have the greatest impact on the Concessionaire's Retribution. Under the Agreement, POB would receive a minimum value for Toll Collection, called the Present Value of Toll Revenues - VPIP [Valor Presente por Ingresos de Peaje] (the “VPIP”).23
88. The Agreement, pursuant to its Section 2.4, would have a duration of 25 years. However, in the event that the Concessionaire does not obtain the VPIP within that term, the duration of the Agreement could be extended up to a maximum of 29 years. If the Concessionaire does not obtain the VPIP within 29 years, ANI must pay the difference between the amount actually collected and the VPIP and the Agreement would terminate.24
89. According to the Parties, under the terms of the Agreement, the Concessionaire undertook to obtain the applicable permits and licenses in order to be able to perform the Interventions contemplated in the Concession Agreement. Without the required permissions (including applicable licenses), the Interventions cannot be performed.25
21 Written Statement of Undisputed Facts, ¶ 31. ↩
22 Written Statement of Undisputed Facts, ¶ 8; POB and S&B Statement of Claim, ¶¶ 140-146. ↩
23 Written Statement of Undisputed Facts, ¶ 9. ↩
24 Written Statement of Undisputed Facts, ¶ 10. ↩
25 Written Statement of Undisputed Facts, ¶ 20. ↩
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90. These environmental permits and licenses can be of two types in infrastructure projects in Colombia: Environmental licenses and Environmental Guidance Adaptation Programs (“PAGA”).26
91. The need to have one or the other depends on the type of intervention to be carried out: If the Intervention is for Construction, an environmental license shall be required; if the Intervention is for Improvement or Rehabilitation, a PAGA shall be required.27
92. The Concessionaire obtained the following environmental permits:28
26 Written Statement of Undisputed Facts, ¶ 21; POB and S&B Statement of Claim, ¶ 157. ↩
27 Written Statement of Undisputed Facts, ¶ 22; POB and S&B Statement of Claim, ¶ 158. ↩
28 Written Statement of Undisputed Facts, ¶ 22. ↩
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93. The Concessionaire submitted to the Supervisor the Layout and Geometric Design Studies and the Detailed Studies of UFs 4 and 529.
94. The Supervisor submitted its No-objection to the Layout and Geometric Design Studies of UFs 4 and 5 through the official letters CP-PER-360-2015 (RAD. ANI No. 2015-409081869-2) and CP-PER-356-2015 (RAD. ANI No. 2015-409-080604-2) dated 10 and 4 December 2015 respectively, as well as its No-Objection to the Detailed Studies of Functional Units 4 and 5, through the official letters CP-PER-370-2015 (RAD. ANI No. 2015-409-082668- 2) and CP-PER-369- 2015 (RAD. ANI No. 2015-409-082674-2) of 14 December 201530.
95. Derived from the foregoing, on 16 January 2016, the Parties signed the Construction Phase Commencement Minute. In accordance with the provisions of Amendment No. 4, the completion of the Construction Phase of UFs 4 and 5 began on 15 December 2015. From then on, the Concessionaire began to perform the activities provided for in the Agreement and in the Works Plan.31
96. During the Construction Phase, the Concessionaire identified that there were 66 springs in the layout of UFs 4 and 5 of the Project.32
97. Indeed, according to the Claimants, on 16 August 2016, 1 September 2016, and 6 December 2016, POB received questions, objections, and claims (“PQRs”) from
29 Written Statement of Undisputed Facts, ¶ 23; ↩
30 Written Statement of Undisputed Facts, ¶ 24. ↩
31 Written Statement of Undisputed Facts, ¶ 25; POB and S&B Statement of Claim, ¶¶ 166-167. ↩
32 Written Statement of Undisputed Facts, ¶ 26. ↩
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members of the community surrounding the Project, where the community warned of the possible existence of springs in the vicinity of the route of UFs 4 and 5.33
98. According to the Claimants, between October 2016 and April 2018, POB carried out technical studies to verify the physical and chemical characteristics of the water sources identified in the PQRs.34 These reports include the report prepared by the Pontificia Universidad Javeriana (the “Javeriana Report")35 and the report prepared by Constructora SIAM S.A. (the “SIAM Report”),36 which together concluded the existence of the 66 springs, which were informed to ANI and the Supervisor.37
99. The Claimants point out that on 14 November 2017, as concluded by the Javeriana Report, it submitted to ANI the first notice of the Exemption of Liability Event (“EER”) (the “First EER Notice”); on 27 February 2018, and as concluded by the SIAM Report, the Concessionaire submitted the second EER notice (the “Second EER Notice"), to which ANI supposedly has not replied.38 POB adds that on 28 April 2018, based on a supplement to the SIAM Report and other requirements,39 it submitted to ANI the third EER notice (the “Third EER Notice”), supplemented by a communication dated 23 May 2018.40 According to the Claimants, only on 19 July
33 POB and S&B Statement of Claim, ¶ 168. ↩
34 POB and S&B Statement of Claim, ¶¶ 170-180. ↩
35 POB and S&B Statement of Claim, ¶¶ 172-175, 177. ↩
36 POB and S&B Statement of Claim, ¶¶ 176, 178-179. ↩
37 POB and S&B Statement of Claim, ¶¶ 174, 177, 180. ↩
38 POB and S&B Statement of Claim, ¶¶ 186-190. ↩
39 The Claimants point out that, on 18 February 2018, the Corporación Autónoma Regional de la Orinoquía, an autonomous entity of the central State in charge of the administration of the environment and natural resources and with jurisdiction over part of the Project (“Corporinoquía”) notified POB of two administrative acts urging POB to carry out hydrogeological studies to verify the conditions of two points of water interest in the vicinity of the Project. Statement of Claim, ¶ 189. In addition, the Respondent states that the Corporación Autónoma Regional de Cundinamarca, an autonomous entity of the central State in charge of the administration of the environment and natural resources, and with jurisdiction over part of the Project ("CAR” and jointly with Corporinoquía, the “Environmental Authorities”) reportedly sent POB a communication, dated 22 May 2018, stating that no activities could be carried out in the vicinity of the springs. Statement of Claim, ¶ 192. ↩
40 POB and S&B Statement of Claim, ¶¶ 190-192. ↩
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2019 did the Supervisor allegedly communicate to ANI that it agreed that the events reported in the Third EER Notice constituted an EER.41
100. According to both Parties, on 1 August 2018, the Parties executed the Exemption of Liability Event Minutes (“EER Minutes"), whereby the Parties acknowledged that the existence of the springs in UFs 4 and 5 of the Project was an EER under the terms of the Agreement.42
101. According to the Parties, in the EER Minutes, among other obligations and commitments, the Parties undertook to carry out the following activities:43
41 POB and S&B Statement of Claim, ¶ 193. ↩
42 Written Statement of Undisputed Facts, 27-28; POB and S&B Statement of Claim, ¶¶ 196. ↩
43 Written Statement of Undisputed Facts, ¶ 29. ↩
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the performance of the contractually foreseen interventions, studying the impacts that may arise”.
102. Activities 1 and 2 were the obligations acquired by the Parties to overcome the EER under the terms established in the EER Minutes and the Concession Agreement.44
103. The Claimants point out that, on 21 August 2018, and in compliance with Activity 1 set forth in the EER Minutes, a meeting was held between ANI, the Supervisor and POB with the Environmental Authorities, with the purpose of proposing measures, which the Environmental Authorities allegedly refused.45
104. POB adds that, despite the refusal of the Environmental Authorities, and in compliance with the EER Minutes, POB submitted, on 13 September 2018, the
44 Written Statement of Undisputed Facts, ¶ 30. ↩
45 POB and S&B Statement of Claim, ¶¶ 251-252. ↩
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Mitigation Measures for their study (approval or rejection), which were supposedly rejected by the Environmental Authorities.46
105. The Claimants point out that, on 17 September 2018, right after submitting the Mitigation Measures to the Environmental Authorities —anticipating that they would not be approved— POB sent to ANI a communication in which it stated that it had complied with Activity 1 of the EER Minutes. Then, after the Mitigation Measures were not approved, on 21 November 2018, 4 December 2018, and 1 January 2019, POB sent communications to ANI terminating Activity 1 and promoting the advancement of Activity 2.47
106. According to the Claimants, in mid-January 2019, the Parties began negotiating an Amendment to the Concession Agreement as required by Activity 2. The first version of the Amendment that was negotiated under Activity 2 was sent by POB to ANI on 21 January 2019. These negotiations lasted between January and October 2019, and concluded with the agreement of the terms of the Studies and Designs Amendment, the final version of which was sent by POB to ANI, at ANI's request, on 11 October 2019.48
107. According to the Claimants, ANI did not express any opposition to the Studies and Designs Amendment, but did not return it executed, despite POB's requests, made between November 2019 and June 2020.49
108. For its part, the Respondent points out that there was never an approval of the Amendment, and that Activity 1 was still ongoing.50
46 POB and S&B Statement of Claim, ¶¶ 253-254. ↩
47 POB and S&B Statement of Claim, ¶¶ 256-264. ↩
48 POB and S&B Statement of Claim, ¶¶ 265-268, 272-274, 279. ↩
49 POB and S&B Statement of Claim, ¶ 281. ↩
50 ANI Statement of Counterclaim, ¶¶ 97, 137-138, 147-148, 168. ↩
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109. According to the Claimants, on 23 June 2020, ANI sent communications to the Ministry of the Environment and the Comptroller's Office through which ANI allegedly attempted to reopen Activity 1, repudiating the terms of the EER Minutes.51
110. On the other hand, the Claimants point out that both CAR and Corporinoquía have initiated environmental sanctioning proceedings against POB for allegedly carrying out activities other than the harvesting of secondary forest fruits within 100 meters around a spring, which would be stated in CAR's order 0415 of 4 May 2018, and Corporinoquía's order 800.6.19.0091 of 12 March 2019, respectively.52
111. The Respondent points out that, due to its function of institutional articulation of Colombian State entities, on 16 June 2021, an Interinstitutional Working Group was held jointly with the environmental and governmental authorities and the Comptroller's Office, in which it was decided that the Regional Environmental Authorities would carry out a working group with ANLA.53 It adds that, subsequently, more working groups were held between July 2020 and October 2021.54
112. Additionally, the Respondent points out that, despite the execution of the EER Minutes, POB's O&M obligations were not suspended, which is why it sent multiple requests, between 2017 and 2020, for it to carry out the Maintenance and/or Priority Interventions activities in the sections of Functional Units 4 and 5.55
113. The Claimants point out that on 21 July 2015, the Colombian Institute of Anthropology and History (“ICANH”) issued Authorization for the Archaeological Intervention
51 POB and S&B Statement of Claim, ¶¶ 293-302. ↩
52 POB and S&B Statement of Claim, ¶ 317. ↩
53 ANI Statement of Counterclaim, ¶ 124. ↩
54 ANI Statement of Counterclaim, ¶ 126. ↩
55 ANI Statement of Counterclaim, ¶¶ 78-84. ↩
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No. 5048, through which the Preventive Archaeology Program of the UF2 of the Eastern Perimetral Highway Corridor of Cundinamarca (vía Perimentral del Oriente de Cundinamarca) was authorized (the “Archaeological Program").
114. According to both Parties, 5 archaeological sites were found along the route of UF2: (i) El Divino Niño; (ii) the property of Mrs. Ana de Forero; (iii) the Hacienda los Alcaparros; (iv) the Crossroad el Salitre-Guasca; and (v) the Hacienda Búfalo - Camino al Meta.56
115. The Claimants point out that, on 30 March 2016, ICANH approved the Archaeological Prospecting Report and ordered POB to implement the relevant management measures with respect to the sites found. As a result, according to the Claimants, on 26 January 2017, POB's Team of Archaeologists submitted the Request for Authorization for Archaeological Intervention, approved by ICANH on 1 March 2017.57
116. According to both Parties, the work carried out by the Archaeological Team in charge of the Archaeological Program identified the presence of two sites of archaeological impact along the layout of the Project's UF2. The first, located between K5+650 and K5+800 within the El Divino Niño site. The second, located at K8+890 within the Hacienda los Alcaparros site.58
117. According to both Parties, on 18 February 2022, two Panels of Amiable Compositeurs59 acknowledged the existence of two EERs reported by POB (“EERs-UF2"), derived from the existence of archaeological elements between K5+650 and K5+800 (El Divino Niño) and K8+890 (Hacienda los Alcaparros) of UF2.60
56 Written Statement of Undisputed Facts, ¶ 34; POB and S&B Statement of Claim, ¶ 419. ↩
57 POB and S&B Statement of Claim, ¶¶ 420-426. ↩
58 Written Statement of Undisputed Facts, ¶ 35; POB and S&B Statement of Claim, ¶¶ 428-429; ANI Statement of Counterclaim, ¶ 19. ↩
59 Final Decision Amiable Compositeurs, Dispute 15854 and 15856, both dated 18 December 2018. POB and S&B Statement of Claim, ¶ 412. ↩
60 Written Statement of Undisputed Facts, ¶ 36. ↩
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118. According to both Parties, in the Divino Niño Amiable Composition and in the Hacienda los Alcaparros Amiable Composition it was recognized that the archaeological findings presented in the Project's UF2 were an unforeseeable event.61
119. The Claimants point out that, on 11 June 2020, POB informed ANI that the issues related to the archaeological findings, the intensity and quantity of the findings, as well as their effects on the Agreement, exceed the Concessionaire's reasonable allocation of risks and resulted in an economic imbalance of the Agreement.62
120. According to both Parties, after the acknowledgment of these two EERs-UF2, POB continued to carry out the rescue work with the help of a team of archaeologists. POB continued to find relevant archaeological remains that extended the Archaeological Program. On 31 August 2021, the Parties executed the Completion Minutes for UF2.63
121. According to both Parties, the value of the funding of the Supervision and Supervisor Subaccount is as follows:64
61 Written Statement of Undisputed Facts, ¶ 37. ↩
62 POB and S&B Statement of Claim, ¶¶ 413, 438. ↩
63 Written Statement of Undisputed Facts, ¶ 38. ↩
64 Written Statement of Undisputed Facts, ¶ 32. ↩
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122. According to both Parties, the value of the Supervisor Contract is equivalent to $229,582,850 Reference Month Pesos per month during the Preconstruction Phase, $525,960,917 Reference Month Pesos per month during the Construction Phase, and $308,109,147 Reference Month Pesos per month during the O&M Stage. As of August 2020, ANI modified the value of the Supervisor Contract during the Construction Phase to $455,190,117 Reference Month Pesos per month.65
123. With respect to the analysis of each of the claims made by the Parties that are the subject of this Award, the Arbitral Tribunal declares that it has analyzed and taken into consideration all the arguments presented by the Parties, as well as all the evidence produced during the Arbitration.
124. Consequently, throughout this Award, the Arbitral Tribunal refers only to the arguments and evidence that has been considered relevant and necessary for the decision of the dispute. The fact that a piece of evidence or an argument is not mentioned does not mean that the Tribunal has not studied and analyzed it for the purposes of this decision.
125. The analysis of the Arbitral Tribunal consists of (A) the objections on jurisdiction and competence raised by ANI; (B) the claims of POB and S&B in the Statement of Claim; (C) the claims of ANI in the Statement of Counterclaim, (D) the effects on the Agreement and on the claims of the Parties of the decision on the contractual breaches; and (E) compensation to the Claimants.
65 Written Statement of Undisputed Facts, ¶ 33. ↩
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126. ANI asserts that this Arbitral Tribunal lacks jurisdiction and competence to entertain the dispute, arguing that the Arbitration is not international in character and raising certain objections to the Arbitral Tribunal’s competence based on the matters claimed by the Claimants.
127. As to the jurisdictional defenses, it raises the following objections: (a) the absence of the internationality requirement of subparagraph (c) of Article 62 of Law 1563 of 2012 “Whereby the National and International Arbitration Statute is issued and other provisions are enacted” (“Law 1563 of 2012”);66 (b) the non-fulfillment of the requirement of subparagraph (a) of Article 62 of Law 1563 of 2012, invoked by the Claimants to demonstrate that the arbitration is international;67 and (c) non-fulfillment of the requirement of subparagraph (b) of Article 62 of the same Law.68
128. Regarding the competence of the Arbitral Tribunal, ANI concludes: a) the Tribunal does not have competence to entertain the claims related to compensation, pursuant to section 14.2 (h) “Compensations for Events Exempting from Liability” of the Agreement;69 and b) the Tribunal does not have competence to rule on the EPC Claims.70
129. ANI argues that, only in the event that the Arbitral Tribunal declares that this Arbitration is international, confirming that it has jurisdiction, would it be able to hear the dispute raised in its Statement of Counterclaim.71
130. It should be noted that ANI had presented the same objections on jurisdiction and competence in response to the Request for Interim Protection Measures filed by the Claimants dated 13 January 2021. The Emergency Arbitrator, Salvador Fonseca
66 ANI Statement of Counterclaim, Section 5.1.2. ↩
67 ANI Statement of Counterclaim, Section 5.1.1.1. ↩
68 ANI Statement on Defense, ¶¶ 494-498. In the same sense, ANI Rejoinder, ¶ 286-287. ↩
69 ANI Statement of Counterclaim, Section 5.1.3.1. ↩
70 ANI Statement on Defense, ¶¶ 548-561. In the same sense, ANI Rejoinder, ¶ 303-305. ↩
71 ANI Statement of Counterclaim, p. 162. ↩
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González, issued a Provisional Award dated 9 February 2021 (“Provisional Award”), also ruling on the objections raised by ANI.
131. The Emergency Arbitrator determined that the Arbitration was international, because: i) the Plural Structure stated in Annex 15 of the Bid contained foreign investment and that the Agreement was entered into under this assumption; ii) the requirements of subparagraphs a) and c) of Article 62 of the Arbitration Law to consider the arbitration as international are met; and iii) the dispute affects the interests of international trade.72
132. The Emergency Arbitrator also rejected ANI's objection regarding its jurisdiction because this was a conflict surrounding an EER. Instead, he ruled that the issues in dispute related to a series of various declarations and damage awards that the Claimants sought from ANI and that did not relate to compensation arising from an EER.73
133. The Emergency Arbitrator rejected ANI's argument that these were matters assigned to the competence of the Amiable Compositeur, pointing out that none of the claims in the Notice of Arbitration fell within the specific cases provided in the Agreement for the intervention of the Amiable Compositeur.74
134. The Parties complied with the Provisional Award, in particular, ANI waived its right to seek its annulment.
135. Throughout this Arbitration, ANI has broadly maintained the same line of argument of its objections. The Claimants, in turn, continued with the presentation of their respective arguments. The Arbitral Tribunal will now conduct an analysis of its jurisdiction and competence under Article 19 of the ICDR Rules.
72 Provisional Award, pp. 17-18. ↩
73 Provisional Award, pp. 18-19. ↩
74 Provisional Award, pp. 19-20. ↩
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136. ANI argues that the Arbitration between the Parties should not be considered an international arbitration, and therefore this Arbitral Tribunal — constituted in accordance with the arbitration clause established for international arbitrations— would not be the competent forum to rule on the dispute.
137. The Arbitral Tribunal will analyze ANI's arguments and the Claimants' respective submissions, in order of relevance attributed by the Tribunal, to rule on ANI's objection.
138. ANI claims that this Arbitration should not be deemed international, since the requirement set forth in subparagraph c) of Law 1563 of 2012 is not met.75
139. First, ANI argues that the Parties wanted to limit the resolution of their disputes through international arbitration only to the cases subsumed in subparagraph c) of Article 62 of Law 1563 of 2012, for which purpose they drafted the clause with reference to this subparagraph, excluding subparagraphs a) and b) of the same article.76
140. According to ANI, due to the primacy of the will of the Parties, the only criteria of internationality that allows them to resort to international arbitration is that of subparagraph c) of Article 62. The Arbitral Tribunal would not even have to examine whether or not subparagraphs a) and b) of the same article are applicable, since they are not referred to in the arbitration agreement.77
75 ANI Statement of Counterclaim p. 175; Hereinafter, Law 1563 of 2022 is cited according to Exhibit CL-133. ↩
76 ANI Statement on Defense, ¶ 467. ↩
77 ANI Statement on Defense, ¶ 473, ¶¶ 477-480. ↩
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141. Second, ANI points out that the onus is on the Claimants to prove that the dispute “affects the interests of international trade” 78. There is, in its opinion, no “cause, nexus or relationship whatsoever between the Claimants' statements or allegations and the effect on the interests of international trade”.79
142. Indeed, ANI points out that, since S&B is not a party to the arbitration agreement or the Agreement, the justifications presented by POB to prove the alleged affectation of international trade are immediately meaningless and irrelevant.80
143. Third, ANI argues that the criterion of Article 62(c) is different from that used in the French legislation from which it originated, and therefore it is not sufficient to:81
[S]imply demonstrate the impact on the interests of international trade as occurs in France, but rather, that THE DISPUTE is the one that affects the interests of international trade for the admissibility of international arbitration, which is a stricter and more rigorous criterion than the French one" [original capitalization].
144. ANI argues that it is not enough that there are transfers of foreign currency for the dispute itself to affect international trade, and that in the present case:82
[T]he subject matter of the dispute revolves around whether to declare ANI's alleged breaches of Sections 14.1 and 14.2 of the Concession Agreement and not on the transfer of foreign currency by way of equity or debt on the project.
145. ANI goes on to state:83
If the Claimants' position were accepted, the Colombian legal mandate would be ignored and it would mean
78 ANI Statement of Counterclaim, p. 163, 177. In the same vein, ANI Reply on the Counterclaim, ¶¶ 307-314; ANI Rejoinder, ¶ 287. ↩
79 ANI Statement of Counterclaim, p. 179. In the same sense, ANI Statement of Defense, ¶¶ 521-523. ↩
80 ANI Statement of Defense, ¶ 504. ↩
81 ANI Statement of Counterclaim, p. 178-180. In the same sense, ANI Statement of Defense, ¶¶ 514-532. ↩
82 ANI Statement of Counterclaim, p. 179-181. In the same sense, ANI Statement of Defense, ¶¶ 517-520, ¶¶524-526. ↩
83 ANI Statement of Counterclaim, p. 182. In the same sense, ANI Statement of Defense, ¶ 518. ↩
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that all arbitration is international simply because the contract has some element of internationality, even if the dispute does not deal with such element and, even more so, when there is not even an element of summary evidence of how the alleged breach affects the interests of international trade.
146. Fourth, ANI emphasizes that subparagraph c) of article 62:84
Refers unequivocally to the “interests of trade”, i.e. the activity, not the interests of traders, or to the effects arising from the dispute affecting the interests of international trade, which is different. Thus, the fact that a foreign trader has an “interest" in a dispute is not sufficient to qualify an arbitration as international.
147. ANI points out that there would be a difference between “the DISPUTE affecting the interests of international trade and not that the hypothetical EFFECTS of the dispute may or may not affect S&B in this case” [original capital letters].85
148. Fifth, ANI analyzes the scope of Section 15.3 of the Agreement and argues that what is stated in footnote 1 of Section 15.3 does not contradict its position.86 In its understanding, this footnote refers to Section 15.3 of the Agreement, which, in turn, contains the reference to Article 62 (c). ANI concludes that:87
[If] the provisions of Article 62(c) of Law 1563, to which the parties refer, are not proven, then the national or domestic arbitration referred to in Section 15.2 of the Agreement is appropriate.
149. ANI attaches particular relevance to the document submitted by the Claimants containing question No. 70 and ANI's answer on the scope of Section 15.3,
84 ANI Statement of Counterclaim, p. 182. In the same vein, ANI Reply on the Counterclaim, ¶ 307; ANI Rejoinder, ¶¶ 292-294. ↩
85 ANI Statement of Defense, ¶¶ 474, 488, ¶ 505-512. In the same sense, ANI Reply on the Counterclaim, ¶ 311. ↩
86 "In the event that the winning bid has direct or indirect foreign investment, the compromissory clause of the Agreement shall only be the one regulated in section 15.3. However, if the arbitrators or any authority with jurisdiction to do so, declare that, for this Agreement, the legal grounds for international arbitration do not exist, the national arbitration provided in Section 15.2 above shall be deemed as agreed upon." ↩
87 ANI Statement on Defense, ¶ 469. In the same sense, ANI Rejoinder, ¶¶ 288-290. ↩
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corresponding to the Tender period.88 In its opinion, S&B acknowledged that neither of the parties had more than one domicile, and that the domicile of the SPV (Special-Purpose Vehicle) would be in Colombia, making unclear the application of the requirement provided for in Article 62(c) of Law 1563.89
150. Question No. 70 reproduces the footnote of Section 15.3 of the Agreement and quotes Article 62(c) of Law 1563 of 2012:
Taking into account that in the performance of the Concession Agreement, none of the parties would have more than one domicile, given that the SPV will be constituted for the specific purpose of performing the Concession Agreement and that the domicile of the SPV will be in Colombia, the application of the requirements provided in subparagraph c) of Article 62 of Law 1563 of 2012 would not be clear for it to be understood that the performance of the Concession Agreement affects the interests of international trade. We understand that it has been ANI's intention to protect the rights of plural [sic] structures with foreign investment, by indicating that disputes arising from the Concession Agreement will be decided through an International Arbitral Tribunal; however, since the application of subparagraph c) of Article 62 of Law 1563 of 2012 is not clear, we request you to modify the Concession Agreement in the sense that it is not mandatory that in these cases the disputes are decided by an International Arbitral Tribunal.
151. Subsequently, question No. 70 expresses the concern that, in the event that the International Arbitral Tribunal is declared incompetent, the competent judge for the Agreement would be the contentious-administrative jurisdiction, requesting that the Agreement be modified to allow the choice between a National Arbitral Tribunal or an International Arbitral Tribunal.90
88 ANI Statement of Defense, ¶ 471; Exhibit C-180. ↩
89 ANI Statement of Defense, ¶ 490. In the same sense, ANI Rejoinder, ¶¶ 302, 313. ↩
90 Exhibit C-180. ↩
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152. ANI answered with the intention of clearing such concern and, after quoting the text of Article 62 of Law 1563, indicated:91
As is well known, the above provision is inspired by the decision of the Court of Appeals of Paris, in its Judgment of 14 March 1989, which in deciding the case: Murgue Seigle v. Coflexip, stated: 'The international nature of an arbitration must be determined in accordance with the economic reality of the process during which it arises. In this respect, all that is required is that the economic transaction must involve a transfer of goods, services or funds across national boundaries, while the nationality of the parties, the law applicable to the contract or arbitration, and the seat of the arbitration are irrelevant.' (Translation and emphasis added). Based on the foregoing, ANI provided that at the time of formulating the respective bids, the bidders must expressly, clearly and unequivocally state in a special annex whether their proposal contains the elements of direct or indirect foreign investment, since with that the transfer of goods, services or funds across national borders is thereby deemed to be certain, “understanding” that any "dispute submitted to arbitration decision affects (a) the interests of international trade”. Thus, there would be no reason to doubt about the jurisdiction of the arbitrators to settle the eventual dispute under the rules of Section Three of Law 1563 of 2012 and those special rules set forth in the arbitration clause. Notwithstanding the foregoing, ANI modified the General Part of the Agreement to provide greater clarity regarding the application of national arbitration in the event of the impossibility of applying international arbitration.
153. The Claimants request the rejection of ANI's objections. First, they assert that the dispute at issue in this Arbitration affects the interests of international trade. In particular, “when it refers to an economic operation involving the transfer of funds,
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goods or services across the borders of two or more States”.92
154. Thus, the dispute at issue in the Arbitration affects the interests of international trade given that:93
[T]he Concession Agreement has involved (1) direct or indirect foreign investment by S&B and (2) the execution of credit agreements with transnational and international financial entities.
155. In addition to the foregoing, the Claimants indicate that the financial structure of the Project required POB to undertake certain financial operations, being able to receive funds from shareholders or financial institutions. This resulted in the contributions of S&B and the other shareholders in the amount of US$117,870,000 and the Credit Contract entered into with the Inter-American Development Bank for a total amount of US$156,000,000, both being cross-border transactions.94
156. The Claimants assert that the project finance structure of the Project meant that POB could access the Project's retribution to pay the debts it acquired with the lenders and its shareholders, both international, together with profit sharing.95 In the absence of the Retribution, the Claimants would not be able to carry out these transactions, affecting their ability to pay these international amounts due. The consequence of this is that the dispute between the Parties affects the interests of international trade.96
157. The Claimants argue that Article 62(c) of Law 1563 of 2012 “was incorporated into the Colombian legal system as a transplant of the French Code of Civil Procedure".97 Therefore, it would not be necessary for the dispute to affect solely and exclusively
92 POB and S&B Statement of Claim, ¶ 541. In the same sense, POB and S&B Statement of Defense to the Counterclaim, ¶ 777. ↩
93 POB and S&B Statement of Claim, ¶ 547. ↩
94 POB and S&B Statement of Claim, ¶¶ 559-560. ↩
95 POB and S&B Statement of Claim, ¶¶ 563-565. ↩
96 POB and S&B Statement of Claim, ¶¶ 566-568. ↩
97 POB and S&B Statement of Claim, ¶ 543. ↩
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the interests of international trade, as claimed by the Respondent98.
158. Second, the Claimants argue that S&B is indeed a party to the arbitration clause. Thus, S&B "was part of the Plural Structure S&B and the Agreement provides that, accordingly, it consented by reference to be a party to the Arbitration Agreement”.99
159. Likewise, in response to ANI's arguments regarding the effects of the arbitration clause —which would not be the same as granting the status of a party to said clause— the Claimants respond that said effects:100
[W]ould extend directly to a foreign company domiciled outside of Colombia, to the extent that ANI's breaches of the agreement directly cause harm to it.
160. Finally, the Claimants argue that Section 15.3 of the Agreements refers to direct or indirect foreign investment and that, furthermore, during the tender (document C-180), ANI made references to French jurisprudence and stressed the need to declare its presence in the bid, which was declared by the Plural Structure.101
161. The Claimants emphasize that:102
[T]he common understanding of the Parties when entering into the Agreement was that the presence of foreign direct investment in the Bid would be sufficient for arbitrations under the Agreement to be international within the meaning of Article 62(c) of the Arbitration Statute.
98 POB and S&B Statement of Claim, ¶ 545. ↩
99 POB and S&B Reply, ¶ 194. ↩
100 POB and S&B Reply, ¶ 195. ↩
101 POB and S&B Statement of Claim, ¶¶ 550-552. ↩
102 POB and S&B Reply, ¶ 191. ↩
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162. This Arbitral Tribunal has been constituted under Section 15.3 of the Agreement, subparagraph (c) of which designates ICDR as the administering entity and makes its Rules for International Arbitration applicable.
163. Section 15.3 of the Agreement is entitled “International Arbitration" and has a footnote that states:
In the event that the winning bid has direct or indirect foreign investment, the arbitration clause of the Agreement shall only be the one regulated in Section 15.3. However, if the arbitrators or any competent authority declare that, for this Agreement, the legal grounds for international arbitration do not exist, the national arbitration provided in Section 15.2 above shall be deemed to have been agreed upon.
164. By virtue of the literal wording of this footnote, once it has been verified that the winning bid had included direct or indirect foreign investment, this fact alone leads to the conclusion that the arbitration is international in nature and must be conducted in accordance with the provisions of Section 15.3.
165. On 30 May 2014, the Plural Structure formed by S&B, C.I. Grodco S. en C.A. Ingenieros Civiles and Colombiana Inversiones de Infraestructura S.A.S., submitted their Bid in the Tender, in whose Annex 15 it was affirmatively indicated that the Bid contained "foreign investment, either directly or indirectly”.103
166. On 23 July 2014, by Resolution No. 992, ANI awarded the Project to the Plural Structure, expressly indicating that one of its members was S&B, a company incorporated under the laws of the Swiss Confederation.104
103 Exhibit C-046. ↩
104 Exhibit C-047. ↩
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167. Due to the presence of the foreign investment in the Bid and as indicated in the footnote to Section 15.3, it must be concluded that the only arbitration clause of the Agreement applicable to this Arbitration is the one contained in Section 15.3.
168. However, ANI argues that this fact alone is not sufficient to confirm the internationality of this Arbitration. Rather, the Arbitration must satisfy the criteria set forth in letter a) of Section 15.3, which in turn refers to letter c) of Article 62 of Law 1563 of 2012.
169. Section 15.3(a) states:
Any dispute arising between the Parties in connection with this Agreement shall be decided by an International Arbitral Tribunal in accordance with Article 62(c) of Law 1563 of 2012 and the rules set forth below.
170. In turn, Article 62(c) of Law 1563 of 2012 establishes that arbitration is international when: "the dispute submitted to arbitration affects the interests of international trade."
171. In the opinion of the Arbitral Tribunal, letter a) of Section 15.3 of the Agreement establishes that recourse to international arbitration —in the case of the presence of foreign investment— is justified in accordance with the provisions of letter c) of Article 62. In other words, this clause enshrines that, when the arbitration under this Agreement is of an international nature, it will be so because the requirement set forth in subparagraph c) of Article 62 of Law 1563 of 2012 is met. Therefore, the reference to subparagraph c) of Article 62 does not require the Parties to prove that the dispute affects the interests of international trade. On the contrary, Section 15.3(a) provides that —in the case of the presence of foreign investment— the internationality of the arbitration is based on Article 62(c) of Law 1563 of 2012.
172. This way of regulating the internationality of the arbitration seems consistent if one considers the requirement of the Agreement to constitute an SPV to carry out the concession, that is, a company different from the one to which the agreement is assigned. Thus, the entity providing the foreign investment will not be the one that carries out the
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concession; rather, it will be a company incorporated in Colombia. However, this should not nullify the contribution of foreign investment to the PPP for the purposes of the internationality of the arbitration.
173. The term “Concessionaire” is defined in section 1.32 of the Agreement as:
The Sole Purpose Vehicle fully identified in the Special Part, formed by the successful bidder(s) in the framework of the Selection Process.
174. Along the same lines, section 1.109 defines the “Concessionaire's Bid":
[T]he bid submitted by the successful bidder in the Selection Process and the one that granted it the right to incorporate the special purpose vehicle (SPV) that enters into this Agreement as Concessionaire.
175. In other words, the design of the Tender does not allow the bidders themselves to enter into the concession agreement; they must incorporate an SPV under Colombian law.
176. At the time of the Tender, ANI's understanding was precisely that the presence of direct or indirect foreign investment in the winning bid was sufficient to corroborate the international character of the arbitration. This is reflected in Article 62(c) of Law 1563, that is, in the reference to the interests of international trade.
177. This same understanding of ANI is reflected during the period of the negotiation of the Agreement, in particular, in the document that gathers the series of questions that the Tender participants formulate to better understand the terms of the agreement and to request some adjustments, and answers given to them by ANI. Exhibit C-180 includes an excerpt of the document dated 26 May 2014, which reproduces question No. 70 on the correct interpretation of Section 15.3 and the respective answer of ANI, quoted above.105
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178. Question No. 70 raised some doubts about the interpretation of Section 15.3, together with the concern that the Successful Bidder could be deprived of access to arbitration —national or international— in which case the permanent contentious-administrative jurisdiction would be competent.
179. In answering question No. 70, ANI tried to reassure the Plural Structure. From ANI's answer it is clear that, to its understanding:
180. For the foregoing reasons, by virtue of the literal wording of Section 15.3 of the Agreement, the Arbitral Tribunal concludes that the present arbitration is of an international nature. Therefore, ANI is not correct in its objection to the jurisdiction of the Arbitral Tribunal due to an alleged failure to comply with the provisions of Article 62(c) of Law 1536 of 2012.
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181. First, ANI states that the Parties “freely and voluntarily agreed to limit" the applicability of international arbitration only to the concurrence of subparagraph c) of Article 62 of Law 1563 of 2012, and it is not appropriate to apply the grounds of subparagraph a) of the same article.106
182. ANI denies that its position was “repealing” mandates of the legislator embodied in Article 62 of Law 1536 of 2012, regarding the definition of internationality. It clarifies that, rather, it is a voluntary agreement of the Parties to:107
[R]efer their disputes to the alternative mechanism of international arbitration only in relation to the verification of one of the requirements established in the law so that it is understood that it is an international arbitration, that is, only subparagraph c) of article 62 of Law 1563 of 2012.
183. Second, it argues that, in its opinion:108
[C]olombian law does not prohibit the parties from expressly, freely and voluntarily agreeing to limit the possibility of settling disputes through international arbitration to only one [sic] of the 3 qualifying conditions, because “the fundamental principle of arbitration, such as consensuality" must be applied.
184. ANI states that it is different to understand “that the criteria of internationality are objective or that they are mandatory. Objectivity is different from a compulsory nature of the criteria".109 It argues that the legal problem underlying the question of jurisdiction is the
106 ANI Statement of Counterclaim, p. 164-166, 168. In the same sense, ANI Statement of Defense, par. 453; ANI Rejoinder, ¶ 284. ↩
107 ANI Statement of Defense, ¶¶ 450-451, 460. In the same sense, ANI Reply on the Counterclaim, ¶ 283. ↩
108 ANI Statement of Claim, p. 169. In the same sense, ANI Statement of Defense, ¶¶ 447-449, ¶¶ 456-459; ANI Rejoinder, ¶ 281; ANI Rejoinder, ¶ 283. ↩
109 ANI Reply on the Counterclaim, ¶ 285. In the same vein, ANI Rejoinder, ¶ 283. ↩
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determination of whether Article 62 of Law 1563 of 2012 is a mandatory rule. In its opinion, the answer to this question should be no.110
185. Finally, ANI considers that the criteria of subparagraph a) of Article 62 is not met because the domiciles of the parties to the Arbitration (POB and ANI) are located in the Republic of Colombia. In turn, ANI argues that S&B is not a party to the Agreement or to the arbitration agreement, and therefore the place of its establishment has no bearing.111
186. Along these lines, ANI argues that:112
[N]o company, business or natural person that has jointly submitted an offer to be awarded the current Agreement 002 of 2014 is a party to the arbitration clause.
187. Thus, ANI insists on the argument that the arbitration agreement only includes POB and ANI and that, it is the effects of the results of the present proceedings, which would extend to S&B in accordance with subparagraph e) of the arbitration agreement.113 In its opinion:114
The effects of both the arbitration clause and the dispute itself will only be known at the time of knowing the results of the present arbitration proceedings in relation to S&B.
188. The Respondent further argues that such effect must be certain and not hypothetical.115
189. ANI indicates that the Claimants contradict themselves by asserting that:116
S&B is a party to the arbitration agreement and is domiciled in the Swiss Confederation, but at the same time they state that ANI does not have a “cause of action against S&B".
110 ANI Rejoinder, ¶¶ 288-290. ↩
111 ANI Statement of Defense, ¶¶ 481, 487. In the same sense, ANI Rejoinder, ¶ 285. ↩
112 ANI Statement of Defense, ¶ 474. ↩
113 ANI Statement of Defense, ¶¶ 476, 486-488. ↩
114 ANI Statement of Defense, ¶ 489. ↩
115 ANI Rejoinder, ¶ 294. In the same sense, ANI Statement of Defense, ¶ 510. ↩
116 ANI Statement of Counterclaim, p. 171. In the same sense, ANI Statement of Defense, ¶¶ 491-493. ↩
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190. However, ANI notes that POB's argument that ANI has no cause of action against S&B would only reinforce the position that S&B is not a party to the arbitration agreement.117
191. In the face of this alleged contradiction, ANI points to the fact that S&B is one of the Claimants and that, by its participation in the Arbitration and its statements in the pleadings, it asserted that S&B adhered to the arbitration agreement, and that it acquired rights and obligations under the Concession Agreement.118
192. First, the Claimants argue that the criteria established by law to determine the internationality of an arbitration are objective and cannot be modified contractually, and that there is no contradiction between the Agreement and the criteria of internationality provided for by law.119
193. In its opinion, Section 15.3 of the Agreement, which mentions subparagraph c) of Article 62 of Law 1536 of 2012, does not have the effect intended by ANI. In particular, the expression “in accordance” would not have “the grammatical function of limiting the application of Article 62 to this ground, nor excluding the other grounds of Article 62".120
194. Thus, the footnote accompanying said article would allow one:121
[T]o see that the intention of the Parties was to determine that the arbitration would be international in all cases where there was direct or indirect foreign investment in the Bid, as is in fact the case with the Agreement.
195. Second, the Claimants assert that the factual criteria under Article 62(a) is met, namely that the arbitration is international when the parties are domiciled in
117 ANI Statement of Defense, ¶¶ 491-493. ↩
118 ANI Statement of Counterclaim, pp. 173-174. ↩
119 POB and S&B Statement of Claim, ¶¶ 506-514. In the same sense, POB and S&B Statement of Defense on the Counterclaim, ¶¶761-768. ↩
120 POB and S&B Statement of Claim, ¶ 520. ↩
121 POB and S&B Statement of Claim, ¶ 522. ↩
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different States. This is because the arbitration clause covers ANI and POB as parties to the Agreement, and S&B, which submitted the bid.122
196. Since "S&B was part of the S&B Plural Structure, which submitted the winning bid in the Tender", then it would be covered by the arbitration clause.123
197. The Claimants also assert that their position is consistent and that the alleged contradiction pointed out by ANI (that, on the one hand, S&B is a party to the arbitration agreement, but that ANI has no cause of action against S&B) is not a contradiction124 and indicate that:125
[T]he procedural position that S&B has in this Arbitration by virtue of ANI's acts, which confirm the international character of this Arbitration, has nothing to do with the merits of ANI's claims.
198. The Claimants insist that ANI does not have a cause of action against S&B, and that, having included it as respondent in its counterclaim confirms the international character of this Arbitration.126
199. According to the previous analysis of the Arbitral Tribunal, Section 15.3 of the Agreement is intended to confirm that the presence of foreign investment in the bid, direct or indirect, makes the arbitration international, in accordance with the legal mandate of Article 62(c) of Law 1563 of 2012.
200. At the same time, nothing in the literal wording of this provision indicates that international arbitration would not be proper in any other case provided for in Article 62 of Law 1563. Thus, international arbitration is not subject to the unique situation
122 POB and S&B Statement of Claim, ¶ 526. ↩
123 POB and S&B Statement of Claim, ¶ 529. ↩
124 POB and S&B Statement of Defense to the Counterclaim, ¶ 779. ↩
125 POB and S&B Statement of Defense to the Counterclaim, ¶ 781. ↩
126 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 779-783. ↩
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of Article 62(c). In particular, the expressions “solely and exclusively”, “shall only be proper", etc. are not used.
201. The Arbitral Tribunal does not share ANI's view that the parties could limit the grounds of internationality to only some of those grounds. Following its logic, could the parties eliminate all the grounds for internationality, rendering international arbitration in Colombia ineffective? But beyond this theoretical question, nothing in the literal wording of Section 15.3 of the Agreement indicates that the intention of the contracting parties was to exclude the other legal grounds of the internationality of the arbitration.
202. Thus, Article 62(a) of Law 1563 of 2012 establishes that arbitration is international when "the parties to an arbitration agreement have, at the time of the conclusion of such agreement, their domiciles in different States”.
203. In addition to the above, letter e) of Section 15.3 of the Agreement states:
The Parties agree that in the event that the Arbitral Tribunal is convened, the effects of the arbitration clause shall be extended to those companies, corporations or individuals that have jointly submitted the Bid, to the extent that such parties gave their consent by reference at the time of the submission of the Bid.
204. It follows from this clause that the “Parties” of the Agreement, that is, ANI and the Concessionaire, agree to accept the participation in the arbitration of the entities that participate in the Bid as long as they have expressed their corresponding consent.
205. At the time the Plural Structure, and S&B as part of it, submitted their Bid, they necessarily accepted the terms of the Tender. Indeed, when question No. 70 of the series of questions and answers dated 26 May 2014 about the scope of Section 15.3 of the Agreement was asked, the concern expressed by the Plural Structure is regarding the risk of not being able to access the arbitration jurisdiction, whether domestic or
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international.127 In no case does it object to the arbitration clause itself, with which the Arbitral Tribunal understands that it gives its consent by reference.
206. Thus, S&B, a Swiss entity, consented to the arbitration agreement at the time of submitting the Bid, thus becoming a party to such agreement. Therefore, it must be concluded that the parties to the arbitration agreement have their places of business in different states, which fulfills the requirement of Article 62(a) of Law 1563.
207. Finally, it is not reasonable to understand, as ANI intends, that, in accordance with clause 15.3 (e), the effects of the arbitration clause refer only to the results of the Arbitration, that is to say, to the arbitration award.
208. Section 15.3 (e) of the Agreement refers to “the effects of the arbitration clause” without making any mention of the effects of the arbitration award. A commonly known effect of the arbitration clause is to create the negative jurisdiction of the ordinary courts and the positive jurisdiction of the arbitral tribunal. An arbitration award could not have direct effects on S&B without S&B first being a party to the arbitration agreement.
209. In turn, any effect that S&B might suffer indirectly through POB's assets does not need to be regulated or "accepted" by the Parties, since it will occur automatically, as a consequence of the rendering of an award, without requiring the consent of the Parties.
210. For the foregoing reasons, the Arbitral Tribunal concludes that S&B is a party to the arbitration agreement, which has the effect that the internationality requirement of Article 62(a) is met. Therefore, ANI is not correct in its objection to the Arbitral Tribunal's jurisdiction due to an alleged failure to comply with Article 62(a) of Law 1536 of 2012.
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211. ANI indicates that the requirement established in subparagraph b) of Article 62 of Law 1563 of 2012 is not met either. It states that none of its criteria apply, given that the place of performance of the obligations is in the Republic of Colombia. It concludes that, in addition to the Parties not having agreed on the applicability of subparagraph b), its requirements are not met.128
212. The Claimants point out that this internationality requirement is also met, given that the domicile of one of the parties (S&B) is located in a place other than the place most closely related to the Arbitration, i.e., Colombia.129
213. Article 62(b) of Law 1536 of 2012 covers a factual situation in which all parties to the arbitration agreement are located in one country, but certain elements of the dispute, the subject matter or the seat of the arbitration are located in a different country, namely:
The place of performance of a substantial part of the obligations or the place with which the subject matter of the dispute is most closely connected is located outside the State in which the parties have their domiciles.
214. In the opinion of the Arbitral Tribunal, this ground of internationality is not met given that one of the parties that consented to arbitration under Section 15.3 is an entity established abroad (S&B). Indeed, the Plural Structure stated in Annex 15 of the Bid that it contained foreign investment, accepting the effects of the arbitration clause.
128 ANI Statement of Defense, ¶¶ 494-498. In the same sense, ANI Rejoinder, ¶ 286-287. ↩
129 POB and S&B Statement of Claim, 534-538. ↩
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215. In the absence of S&B's consent, all parties to the arbitration agreement would have had their places of business in one country. However, this did not occur, since one of the parties to the arbitration agreement has its place of business in a different country. Therefore, the internationality of the present Arbitration does not follow the circumstances described in Article 62(b) of Law 1536 of 2012, and is rather derived from paragraphs (a) and (c) of the same legal provision. Therefore, ANI's opposition should be accepted, but only with respect to the assumption of Article 62(b).
216. Therefore, the Arbitral Tribunal concludes that ANI's objections on jurisdiction should be rejected, since this international Arbitral Tribunal was properly established under Section 15.3 of the Agreement.
217. In the event of having jurisdiction, in ANI's opinion, the Arbitral Tribunal must declare it lacks competence to entertain the claims related to compensation and indemnities in relation to an EER, since such competence is vested in the Amiable Compositeur pursuant to Section 14.2(h) of the Agreement.130
218. ANI is of the opinion that from the Claimants' position —that neither S&B nor ANI consented to submit to the Amiable Compositeur— it follows that they also did not do so in relation to the arbitration, since Section 15.3.e of the Agreement only refers to the "effects" of the compromissory clause.131
130 ANI Statement of Counterclaim, pp. 185-188. In the same sense, see ANI Statement of Defense, ¶ 533, ANI Rejoinder, ¶¶ 310-312. ↩
131 ANI Statement of Defense, ¶¶ 537-540. ↩
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219. In response to the Claimants' position —that the referral to the Amiable Compositeur could not become an impediment to access the Arbitral Tribunal— ANI is of the opinion that the Amiable Compositeur mechanism is an alternative mechanism recognized in the Colombian legal system and that any dispute that the Parties submitted to such mechanism must be resolved through it.132
220. Finally, ANI concludes that the forum to resolve claims for compensation, idle costs or other effects derived from an EER is the Amiable Compositeur. In turn, S&B and the EPC Contractor, in the absence of an arbitration agreement, must direct any dispute they intend to initiate against ANI to the ordinary jurisdiction.133
221. The Claimants request that the Tribunal dismiss ANI's argument, since its claim does not refer to the idle costs due to an EER regulated in Section 14.2(h) of the Agreement, in particular, it does not refer to its recognition or its assessment.134 On the contrary, the Claimants' claims refer to ANI's alleged breaches of UFs 4 and 5 obligations; including requests for declarations by the Tribunal on the compliance of the Construction Phase obligations upon execution of the Completion Minutes for UFs 1, 2 and 3; claims for damages; subsidiary claims for the reestablishment of the economic equilibrium of the Agreement; and payment of the Arbitration costs.135
222. Additionally, the Claimants reference Section 15.1 of the Concession Agreement136 which would establish a specific and limited jurisdiction of the Amiable Compositeur, concluding
132 ANI Statement of Defense, ¶¶ 541-546. ↩
133 ANI Post-Hearing Memorial, ¶ 24-25. ↩
134 POB and S&B Statement of Claim, ¶¶ 573-574. In the same sense, POB and S&B Statement of Defense to the Counterclaim, ¶¶ 784-785; POB and S&B Reply, 198-203. ↩
135 POB and S&B Statement of Claim, ¶ 575. ↩
136 Section 15.1: "the Parties agree to resort to an Amiable Compositeur to settle all those disputes that have been expressly indicated in this Agreement to be referred to the Amiable Compositeur." ↩
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that it would not be competent due to the subject matter of the Arbitration.137 They emphasize that:138
[T]he Claimants' claims are not within the competence of the Amiable Compositeur Panel because they do not relate to idle costs due to the longer stay on site caused by an EER but rather to the full damages to which the Claimants are entitled under the Applicable Law. Moreover, as demonstrated, none of the Claimants' claims fall within the express and limited powers of the Amiable Compositeur under the Agreement. In any event, the eventual competence of the Amiable Compositeur Panel does not preclude the jurisdiction and competence of the Arbitral Tribunal over all disputes arising out of the Agreement, as provided for in the Arbitration Agreement and demonstrated by the Claimants in the Arbitration.
223. They further argue that the Amiable Compositeur does not have competence ratione personae over claims raised by S&B against ANI because neither of them expressed their consent.139 The Claimants assert that "to accept ANI's position would deprive the Claimants of the forum available to them to pursue their disputes against ANI”.140
224. In contrast to the above limitations, in the Claimants' view, the Concession Agreement grants the Arbitral Tribunal a broad power to rule on “any dispute arising between the Parties under this Agreement,” which in turn would include S&B's claims under Section 15.3(e) of the Concession Agreement.141
225. The Claimants argue that, even if the Amiable Compositeur were competent, that does not preclude the jurisdiction of this Arbitral Tribunal, given that:142
137 POB and S&B Statement of Claim, ¶¶ 579-580. In the same sense, POB and S&B Reply, ¶ 198. ↩
138 Post-Hearing Memorial, ¶ 437. ↩
139 POB and S&B Statement of Claim, ¶ 581. ↩
140 POB and S&B Statement of Defense to the Counterclaim, ¶ 785.iii. ↩
141 POB and S&B Statement of Claim, ¶ 582. ↩
142 POB and S&B Statement of Claim ¶ 586. ↩
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[T]he consequences arising from eventual breaches of the agreement to submit certain disputes to the Amiable Compositeur are exclusively contractual, not procedural.
226. In other words, they argue that, if certain matters within the competence of the Amiable Compositeur were brought before this Arbitral Tribunal, a breach of contract would eventually arise, but not the lack of competence of this Arbitral Tribunal.143
227. Finally, the Claimants reference Article 13 of the General Code of Procedure, according to which clauses limiting access to judicial authorities are ineffective in the Colombian legal system.144
228. Pursuant to Section 15.1.a of the Agreement:
The Parties agree to resort to an Amiable Compositeur to settle all those disputes that have been expressly indicated in this Agreement to be referred to the Amiable Compositeur.
229. Section 14.2.h of the Agreement regulates compensation owed for Events Exempting from Liability. Its paragraph ii) provides for compensation to the Concessionaire with respect to:
[I]dle costs due to the longer stay on site that may be caused by these events, through the recognition of a daily sum to be defined by the Parties by mutual agreement.
230. According to paragraph v) of the same provision, “in case of disputes regarding the application of this event or its valuation, the difference between the Parties shall be submitted to the Amiable Compositeur”.
143 POB and S&B Statement of Claim, ¶ 587. ↩
144 POB and S&B Statement of Claim, ¶ 588. ↩
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231. For the Arbitral Tribunal, it is sufficient to review the Claimants' relief in the Statement of Claim to determine that there is no dispute as to the existence of an EER or the assessment of the idle costs due to the longer stay at the construction site.
232. Indeed, the Parties acknowledged the existence of several EERs, which affected UFs 2, 4 and 5, through the signature of the respective Exemption of Liability Event Minutes.145 The dispute before this Arbitral Tribunal is partly related, as to the facts, to the EERs that occurred in UFs 2, 4 and 5. However, this dispute has very different dimensions with respect to those that the Parties had reserved for the competence of the Amiable Compositeur. Thus, the existence of an EER is not at issue before this Arbitral Tribunal and, likewise, the Claimants' claims do not refer to the assessment of idle costs, matters that should be submitted before the Amiable Compositeur.
233. Likewise, ANI's Counterclaim, although filed under the condition that this Tribunal would confirm its jurisdiction and/or competence, refers to a series of disputes that exceed the limits of the competence assigned to the Amiable Compositeur including a request for the early termination of the Agreement.146
234. For the aforementioned reasons, the Arbitral Tribunal concludes that ANI's objection regarding the alleged lack of competence to entertain the claims related to compensation and damages in connection with the EERs must be rejected.
235. ANI asserts that the Arbitral Tribunal should not rule on damages and/or compensation from or in relation to third parties outside the arbitration agreement and the Agreement.147
145 Exhibit C-002. ↩
146 ANI Statement of Counterclaim, p. 361-367. ↩
147 ANI Statement of Defense, ¶¶ 548-561. In the same sense, ANI Rejoinder, ¶¶ 303-305. ↩
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This refers specifically to the EPC Contractor with whom POB entered into an EPC Contract (the "EPC Claims”). Thus, Sections 5.1.a and 5.1.b set forth the obligations to execute, respectively, the Design Contract and the Construction Contract, within the time periods indicated therein.
236. In practice, POB executed an Engineering, Procurement and Construction Contract, known as the EPC Contract, with the POB Construction Consortium (JV-POB).148 The object of the EPC Contract, according to its Clause 3.01, consisted of the following:
On the terms and subject to the conditions of this Contract, the EPC Contractor shall perform on a lump sum turnkey basis and in accordance with the Back to Back Principle, the Design and the EPC Works to satisfy the Concession Agreement Tests and achieve completion of each Functional Unit in accordance with Section 8.07 within the EPC Contract Time for Completion, all in compliance with the Compliance Standards.
237. ANI objects to the competence of the Arbitral Tribunal to rule on any claim of the EPC Contractor, considering that the Claimants' claim is for idle costs due to longer stay on site derived from an EER.149
238. ANI references Section 16.3 of the Agreement, which states that the Agreement does not create any association, partnership or agency relationship between the Parties, and that none of them may bind the other.150 It states that:151
[T]he EPC contractor is not a party to the Concession Agreement 002 of 2014 or to the arbitration agreement. The only parties to the agreement and the arbitration agreement are ANI and POB. Due to the foregoing, the tribunal must declare its lack of competence in relation to any claim related to the EPC contractor.
148 Exhibit C-086. ↩
149 ANI Statement of Counterclaim, p.364. ↩
150 ANI Statement of Defense, ¶ 558. ↩
151 ANI Post-Hearing Memorial, ¶ 13. ↩
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239. ANI also invokes Section 14.3 of the Agreement, which establishes the obligation to keep ANI free from any claim arising from its actions or those of its subcontractors or employees.152
240. ANI argues that, when POB claims alleged damages of the EPC contractor, “there is no legal standing with POB's claims".153 ANI argues that POB does not have standing in the cause of action to request damages in favor of the EPC Contractor, since only the latter would have such standing in accordance with the substantial relationship. It also states that it is not aware of a decision ordering ANI to pay damages in favor of the EPC Contractor.154
241. ANI adds that the Arbitral Tribunal could not rule on the alleged damages suffered by the EPC Contractor without the latter's participation in the process to assert its rights.155 It also indicates that:156
[T]he EPC Contractor is not and has not been a party to the present arbitration proceedings and, therefore, any position of the EPC Contractor in relation to the present dispute is unknown. Therefore, the tribunal must dismiss any claim relating to POB's EPC.
242. Finally, it indicates that there would be a double recovery risk:157
What POB is seeking is not only to obtain an absolutely unjustified compensation, since ANI has not breached any agreement, but it is even seeking the recognition of a double recovery since the shareholding composition of the EPC contractor is similar to that of POB.
152 ANI Statement of Defense, ¶ 560. In the same sense, ANI Rejoinder, ¶ 307. ↩
153 ANI Statement of Defense, ¶ 562. ↩
154 ANI Statement of Defense, ¶ 565. ↩
155 ANI Statement of Defense, ¶ 567. ↩
156 ANI Post-Hearing Memorial, ¶ 16. ↩
157 ANI Post-Hearing Memorial, ¶ 17. ↩
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243. The Claimants state that the Agreement establishes the Concessionaire's obligation to enter into a construction contract for the performance of the Interventions and that this was done, ANI being aware and having approved the EPC Contract.158
244. The Claimants explain that Clause 4.04 “Back-to-Back Principle” of the EPC Contract enshrines the EPC Contractor's right to claim from the Concessionaire the recovery of damages suffered due to ANI's breach of the Agreement. In these cases, the Concessionaire must file the corresponding claim before ANI and transfer all proceeds from said claim to the EPC Contractor.159 Based on the foregoing, the Claimants conclude that:160
[T]his is the procedure to be followed in the event of claims by the EPC contractor for contractual breaches committed by ANI. The Concessionaire was under no obligation to pay the EPC Contractor's claims in advance so as to claim before ANI, but only once ANI had paid them, voluntarily or by order of the Arbitral Tribunal.
245. Since there is no prior obligation to pay the EPC Contractor on the part of the Concessionaire, the Claimants seek to provide certainty that the amounts recognized by the Arbitral Tribunal will be transferred to the EPC Contractor:161
Likewise, the Tribunal can have full certainty that the Concessionaire will comply with the EPC Contract and, consequently, that it will transfer to the EPC Contractor the amounts that are recognized by the Arbitral Tribunal and paid by ANI as a consequence of the claims derived from the EPC Contractor. For this purpose, the Tribunal may order the Concessionaire to credit ANI for the payment of such damages to the EPC Contractor once ANI has fully compensated the Concessionaire. The Tribunal may even establish a payment method that allows ANI to verify
158 Post-Hearing Memorial, ¶¶ 325-327. ↩
159 Post-Hearing Memorial, ¶ 327. ↩
160 Post-Hearing Memorial, ¶ 327.iii. ↩
161 Post-Hearing Memorial, ¶ 327.v. ↩
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that the Concessionaire paid the corresponding compensation to the EPC Contractor.
246. Finally, the Claimants conclude:162
Therefore, the EPC Contractor's claims are made by the Concessionaire against ANI, in accordance with the claims structure set forth in the Concession Agreement, to obtain compensation for the damages that the EPC Contractor suffered as a consequence of ANI's breaches. These are claims that respond to the nature of the EPC Contract as a contract related to the Concession Agreement. In this sense, they are certain and future costs for the Concessionaire. Consequently, the jurisdiction of the Tribunal to settle this controversy is unquestionable, since these are claims within the objective and subjective scope of the Concession Agreement and which are expressly foreseen to be formulated by the Concessionaire against ANI.
247. The Arbitral Tribunal notes that the EPC Contractor is not listed as one of the Claimants in this Arbitration. In other words, the EPC Contractor does not even attempt to exercise an active role in this Arbitration, and therefore it does not seem appropriate to raise an objection for lack of standing, since the EPC Contractor does not intend to assume the role of the claimant or any other active role. Moreover, this Arbitral Tribunal does not purport to “apply” the EPC Contract or any of its provisions to this dispute.
248. However, in order for this Arbitral Tribunal to have competence to rule on the damages claimed by POB, such damages must be rooted in POB's assets. Otherwise, in the absence of proof that the Claimants are claiming damages of their own, this Arbitral Tribunal would effectively lack competence, because it has not been constituted to rule on the claims of a third party against POB under the EPC Contract.
162 Post-Hearing Memorial, ¶ 327.vi. ↩
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249. In the submission dated 15 January 2024, filed pursuant to Procedural Order No. 17, the Claimants state that “the damages claimed by the Claimants is certain, direct, and personal."163
250. However, the Arbitral Tribunal notes that the Claimants' costs include the concept of “EPC Claims”, the values of which correspond to COP 5.8 billion for UF 2;164 COP 67.3 billion for UF 4; and COP 49.0 billion for UF 5.165
251. In Procedural Order No. 18, the Tribunal requested that the Claimants clarify:166
[W]hether the EPC costs and expenses were included in the damages valuation, and to specify the overall value of these EPC costs and expenses in each of the UFs (“Aggregate Value"). Additionally, within the Global Value of each UF, to specify whether these costs have been invoiced by the EPC to POB, and, separately, whether they have been paid by POB to the EPC.
252. In response to this request, the Claimants clarified:167
[T]hat the EPC Claims are a future and certain injury of the Concessionaire and are so presented, in an individualized and differentiated manner, in the damages reports prepared by FTI in this Arbitration.
253. According to the Glossary of terms in the Statement of Claim, the EPC Claims include "EPC UF 2 Claim" and "EPC UF 4 and 5 Claim". The first one refers to the "economic claim with respect to the archaeological findings in UF 2, submitted by the EPC Contractor to POB on 11 June 2020 and submitted by POB to ANI', in accordance with the definition assigned in Exhibit CER-001”. The second one refers to the “claim for damages
163 POB and S&B Submission dated 15 January 2024, ¶ 15. ↩
164 Updated in the 12 April 2024 Claimants' Submission, Tables 2-1, 2-2, and 4-10, ¶ 4. ↩
165 POB and S&B Submission dated 15 January 2024, Tables 2-1 and 2-2, ¶ 8. ↩
166 Procedural Order No. 18. ↩
167 Claimants' Submission dated 12 April 2024, Tables 2-1, 2-2, and 4-10, ¶ 4. ↩
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related to the non-performance of UFs 4 and 5, submitted by the EPC Contractor to POB on 21 April 2021', in accordance with the definition assigned in Exhibit CER-001"168.
254. The Claimants have at all times acknowledged that the EPC Claims are “the damages suffered by the EPC Contractor as a result of ANI's contractual breaches”.169 They also point out that the EPC Claims:170
[H]ave not been invoiced by the EPC Contractor to POB nor paid by POB, to the extent that said EPC Claims will be payable once ANI pays the Concessionaire the corresponding amounts, pursuant to the principle of transparency.
255. In other words, the EPC Claims are confined to the EPC Contractor's assets and they have not been transferred to POB's assets. POB's assets have not been affected in any way by the EPC Claims. Since the amounts of such Claims were not even invoiced, no damages were caused, not even through a mere accounting provision in POB's balance sheet. Nor has POB submitted to this Arbitral Tribunal any acknowledgment of the debt in favor of the EPC Contractor or a settlement agreement with the latter.
256. For the reasons stated above, while the Claimants characterize the EPC Claims as "certain" damages, the certainty of such damages is not proven before this Arbitral Tribunal. The EPC Claims constitute damages suffered by a third party, damages outside POB's assets, which is why the Arbitral Tribunal lacks competence to rule on the EPC Claims.
257. On the other hand, the Tribunal is aware that the EPC Contract would authorize POB to claim damages suffered by the EPC Contractor. Indeed, Clause 4.02 of the EPC Contract requires (i) that ANI must have agreed in writing to take care of such claims or (ii) that it has decided to do so. Beyond the fact that in this case POB has not demonstrated that any of these requirements are met, the truth is that for ANI to be sued in the framework of
168 CER-001, ¶ 1.2.16; 2.6.1-2.6.19. ↩
169 POB and S&B Statement of Claim, ¶ 470. ↩
170 Claimants' Submission dated 12 April 2024, ¶ 6. ↩
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this Arbitration, pursuant to the arbitration clause contained in the Concession Agreement, for damages suffered by the EPC contractor, it is indispensable that ANI's consent to it be demonstrated.
258. In this regard, the Concession Agreement does not establish such consent on ANI's part. Nor does it state that ANI must be responsible for the EPC claims suffered by the EPC contractor that are brought by POB.
259. First, in relation to the Concession Agreement entered into between POB and ANI, Section 15 "Dispute Resolution” determined the composition of an arbitral tribunal, national or international, to decide disputes arising between the Parties and in connection with the Agreement. In turn, according to the Concession Agreement, "Party or Parties” is defined exclusively as Perimetral Oriental de Oriente S.A.S. and ANI: “They are, individually or jointly, the Concessionaire and ANI, as identified in the heading of this General Part."
260. Second, although the Concession Agreement establishes the Concessionaire's obligation to enter into a contract for the preparation of designs and the construction of the works under the agreement, ANI is not a party nor did it enter into such contract, nor does it have any legal relationship with the EPC Contractor. In this regard, the final sentence of Section 16.3 of the Agreement is particularly illustrative: “The Parties do not intend to create any right or grant any remedies to third parties beneficiaries of the Agreement”. This means that the Concession Agreement not only does not explicitly recognize the rights derived from the EPC Contract in favor of the EPC contractor, but also that any implicit interpretation in that sense would be precluded by virtue of the principle enshrined in the aforementioned Section 16.3.
261. Third, Section 15.3 (“International Arbitration”), paragraph (e) states:
The Parties agree that if the Arbitral Tribunal is convened, the effects of the arbitration clause shall be extended to those companies, corporations or individuals that have jointly submitted the Bid, to the extent that such parties gave their consent by reference at the time of the submission of the Bid.
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262. This scenario clearly allows for the intervention of non-signatories, but limits them only to members of the Concessionaire. In this sense, the Arbitral Tribunal ruled in Section IV.A.1 that S&B had given its consent by reference.
263. Fourth, in Section 14.3 of the Agreement, the Parties expressly agreed that:
The Concessionaire undertakes to keep ANI free from any claims from third parties arising from its actions or those of its subcontractors or employees.
264. This principle is consistent with Section 5.2. “Contractors” paragraph (e) of the same Agreement:
In all cases, the Concessionaire shall remain liable to ANI for the performance of all the obligations contained in this Agreement, including but not limited to those performed by the Contractors and their respective subcontractors, and shall keep ANI free from breaches and claims of the Contractors and subcontractors.
265. In other words, in the Tribunal's opinion, due to the operation of the Concession Agreement, it is POB as Concessionaire who must respond to claims and lawsuits from the Contractors. A different question is whether, as a consequence of responding to such claims, POB suffers its own damages that, under the Concession Agreement, may be attributable to ANI.
266. Consequently, this Arbitral Tribunal considers that ANI is not bound, under the Concession Agreement, to pay the claims made by the EPC contractor to PОВ.
267. Thus, the Arbitral Tribunal lacks competence to rule on the award for damages allegedly caused by the archaeological findings of UF 2 which, according to the Claimants,
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generated an economic imbalance of the Agreement and a damage equivalent to COP 5.8 billion.171
268. The EPC Claims for UFs 4 and 5 are in the same situation.172 Since this is not a damage suffered by POB, but by the EPC Contractor, the Arbitral Tribunal lacks competence to rule on EPC Claims on UFs 4 and 5, and therefore it cannot consider these amounts within the Loss of Profit calculation scheme, and they must be excluded from the damages that may be awarded by the Arbitral Tribunal.173
269. The Claimants also highlight:174
[T]hat the values associated with Capex in FTI's damage assessments are not part of the EPC Claims. On the contrary, these are costs that have already been incurred by the Concessionaire and they correspond to amounts (i) invoiced by the EPC Contractor to POB that (ii) were paid by POB to the EPC Contractor as consideration for the performance of the Project Interventions.
270. EPC Capex Values:175
They are independent of and have no relation to the amounts that are the subject of the EPC Claims, which are the subject of the jurisdictional objections to which the Tribunal referred in OP 18.
271. Following the above logic, and dealing with a cost or damages supposedly incurred by POB itself,176 the Arbitral Tribunal reaffirms its competence over POB's claims described as EPC Capex, so there is no obstacle for that item to be kept within the calculation of POB Loss of Profit corresponding to UFs 4 and 5.
171 POB and S&B Statement of Claim, ¶ 445 (original amount 5.4). ↩
172 Exhibit CER-001, ¶ 2.6.2-2.6.11. ↩
173 See Section IV.E.1 of the Award. ↩
174 POB communication dated 12 April 2024, "Procedural Order No. 18 (OP18) - response to the request of the Arbitral Tribunal and response to ANI's letter dated 1 March 2024, ¶ 7. ↩
175 POB communication dated 12 April 2024, "Procedural Order No. 18 (OP18) - response to the request of the Arbitral Tribunal and response to ANI's letter dated 1 March 2024, ¶ 7. ↩
176 CER-001, ¶ 3.4.10: “In this report, I use the financial term “Capex" (originating from the English term capital expenditure) to refer to costs associated with carrying out investments." ↩
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272. For the aforementioned reasons, the Arbitral Tribunal accepts ANI's objection regarding the competence of the Arbitral Tribunal only with respect to the Claims of the EPC Contractor for UFs 2, 4 and 5, since it considers that it effectively lacks competence to rule on such Claims since they relate to damages suffered by a third party.
273. At the same time, the Arbitral Tribunal confirms that it does have competence over all POB's other claims, to the extent that it is concluded that they involve damages specific to that Party.
274. In particular, the Arbitral Tribunal confirms that it does have competence to rule on the appropriate compensation due to POB in the event that ANI's subsidiary claim for termination of the Agreement is successful.177
275. In this regard, the Claimants pointed out:178
[I]n the hypothetical and unlikely event that the Tribunal were to consider that termination of the Agreement is appropriate based on the arguments of ANI, it should order full compensation for the damages suffered by the Claimants based on said termination.
From the perspective of the Arbitral Tribunal's competence, there is no impediment for the calculation of the compensation to incorporate references and amounts corresponding to UFs 2, 4 and 5, as long as they are Loss of Profit of POB itself and not the costs incurred by the EPC Contractor. Without prejudice to confirming here the Arbitral Tribunal's competence to award compensation in the event that ANI's subsidiary claim is successful, the specific merits of the compensation for the damages allegedly suffered by POB will be addressed in Section VI.E.1 of the Award.
177 ANI Statement of Counterclaim, p. 367. ↩
178 POB and S&B Statement of Defense to the Counterclaim, ¶ 549. ↩
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276. The Claimants allege that ANI breached its legal and contractual obligations in the performance of UF 2 of the Project by failing to grant the request to reestablish the economic equilibrium of the Concession Agreement.179 They claim that POB's archaeological obligations and risks are not unlimited180 and that it did not assume the archaeological risk to the extent and in the way ANI claims.181
277. The Claimants argue that the UF 2 archaeological findings generated an economic imbalance of the Concession Agreement, which ANI has the duty to reestablish.182
278. The archaeological findings had “an intensity of such magnitude that they unbalanced the economic equation of the Concession Agreement",183 and given that the requirements contemplated by the Colombian legal system are met, ANI has the obligation to compensate POB184 for such imbalance.185
279. POB clarifies that the main claim on the reestablishment of the economic equilibrium of UF 2 discussed herein is focused only on the EPC Archaeology Claim.186
179 POB and S&B Statement of Claim, ¶ 410. ↩
180 POB and S&B Reply, p. 82. ↩
181 POB and S&B Reply, p. 83. ↩
182 POB and S&B Statement of Claim, ¶¶ 434-435. ↩
183 POB and S&B Statement of Claim, ¶ 440. ↩
184 This request for compensation for UF2 is the original claim contained in the Statement of Claim. However, the Claimant subsequently and alternatively sought compensation for the total damages alleged, including compensation for UF2, in relation to the Respondent's claim for early termination. The Tribunal will discuss this subsequent and alternative claim in Section IV.E.1 of this Award. ↩
185 POB and S&B Statement of Claim, ¶ 441. ↩
186 POB communication dated 5 July 2024, "Hearing session of 26 June 2024 - Location in the file of the evidence associated with UF2 Archaeological Claim", ¶ 2(a). ↩
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280. POB states that the economic imbalance involved in this claim is strictly for the amounts that were caused as a consequence of the archaeological findings;187 and that it is $5.8 billion Colombian pesos.188 Furthermore, POB warns in any case that the amounts associated to the Capex in FTI's damages reports are not part of the EPC Claims, since they are costs already incurred by POB, amounts invoiced by the EPC Contractor to POB and paid by POB to the EPC Contractor.189 In turn, the EPC Claims “are not part of the Global Value of each UF, they have not been invoiced by the EPC Contractor to POB nor paid by the latter”.190
281. First, to support this claim, POB states that it found five archaeological sites in UF 2 of the Project, in which “the findings include: (i) the discovery of slabs or funerary structures, ceramic pieces and other archaeological remains between K5+650 and K5+800 and (ii) the discovery of human bone remains and hunting tools in K8+890".191 Furthermore, that such archaeological findings resulted in the recognition of two EERs under the terms of the Concession Agreement, as enshrined in the statements of the Amiable Compositeur.192
282. Second, in support of its claim, POB states that:193
[T]he archaeological findings between K5+650, K5+800 and K8+890 of UF2 are: (i) subsequent to the Concession Agreement, since they arose after the execution of the Agreement; (ii) not attributable to POB, since they are a typical feature of the area; (iii) unforeseeable, given their magnitude and complexity, their harmful consequences were not foreseen by the
187 POB communication dated 5 July 2024, “Hearing session of 26 June 2024 - Located in the file of the evidence associated with UF2 Archaeological Claim", ¶ 2(a). ↩
188 POB communication dated 5 July 2024, "Hearing session of 26 June 2024 - Located in the file of the evidence associated with UF2 Archaeological Claim", ¶ 2(a). Exhibit CER-009. ↩
189 POB communication dated 12 April 2024, "Procedural Order No. 18 (OP18) - response to the request of the Arbitral Tribunal and response to ANI's letter dated 1 March 2024", ¶ 7. ↩
190 POB communication dated 12 April 2024, "Procedural Order No. 18 (OP18) - response to the request of the Arbitral Tribunal and response to ANI's letter dated 1 March 2024", ¶ 6. ↩
191 POB and S&B Statement of Claim, ¶ 411. ↩
192 POB and S&B Statement of Claim, ¶¶ 427-429. ↩
193 POB and S&B Statement of Claim, ¶ 442. ↩
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Parties; and (iv) they had serious consequences for POB, given that it had to significantly extend the term set for the recovery of the findings, which resulted in cost overruns assumed by the Concessionaire that were not taken into account when defining the contractual equation.
283. Third, in support of its claim, POB argues that the magnitude and complexity of the findings led to the fact that:194
[T]he Interventions had to be extended until August 2021, to the extent that during more than four years it had to focus all of its resources to overcome the two EERs derived from the archaeological findings.
284. The above led to the fact that on:195
[S]everal occasions during the operation it was required (i) to include additional personnel to the team of archaeologists, (ii) to acquire equipment, materials, supplies and specialized laboratories in the field, (iii) to adapt the sites and facilities where the recovery was to be carried out, (iv) to hire security systems, (v) to install sanitary units and hydration points, (vi) to assume transportation expenses, (vii) to assume costs derived from the interventions related to the scope of the Agreement, (viii) to execute insurance policies for machinery and (ix) others.
285. Fourth, POB concedes that it "assumed the risk arising from Social and Environmental Management, including matters related to archaeological findings".196 However, according to the “applicable law, POB only assumed foreseeable and limited risks",197 thus claiming that the intensity and quantity of the discoveries make them an unforeseeable and exorbitant risk, which broke the economic balance of the Concession Agreement.198
194 POB and S&B Statement of Claim, ¶ 442. ↩
195 POB and S&B Statement of Claim, ¶ 442. ↩
196 POB and S&B Statement of Claim, ¶ 413. ↩
197 POB and S&B Reply, p. 82. ↩
198 POB and S&B Reply, p. 83. ↩
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286. Fifth, POB states that it requested ANI to reestablish the contractual equilibrium in the communication sent on 11 June 2020.199 Furthermore, POB points out that there is no legal timing requirement that limits the power to request the reestablishment of the economic balance of a State contract, particularly it is not imperative to make reservations in amendments, in order to later request such reestablishment.200 Likewise, POB argues that waivers to file claims must be expressly stated in contractual documents in order to be effective, in accordance with article 5 of Law 80 of 1993. Therefore, POB concludes that it did not waive its right to claim the reestablishment of the economic equilibrium of the Agreement.
287. ANI asserts that the Arbitral Tribunal should not rule on damages and/or compensations from or in relation to third parties who are outside the arbitration agreement and the Agreement.201
288. ANI also argues that POB is not entitled to the reestablishment of the economic equilibrium of the Agreement due to the archaeological findings in UF 2, since the impact of the EERs, declared by the Amiable Compositeur, releases all the Parties from liability and obligations, in accordance with Section 14.2(c) of the Concession Agreement.202
289. In addition, ANI states that the archaeological findings were risks assigned in the Concession Agreement to POB.203 Likewise, it argues that they are an unfavorable consequence derived from POB's negligent contractual management and breach of contractual obligations with respect to UF 2.204 Additionally, ANI argues that the
199 POB and S&B Statement of Claim, ¶ 440. Exhibit C-128. ↩
200 POB and S&B Reply, ¶¶ 183, 184. ↩
201 ANI Statement of Defense, ¶¶ 548-561. In the same sense, ANI Rejoinder, ¶ 303-305. ↩
202 ANI Statement of Defense, ¶¶ 757-768. ANI communication dated 12 July 2024, “Pronouncement Regarding the Claimant's Memorial dated 5 July 2024," ¶ 2.1. ↩
203 ANI Statement of Response, ¶ 777. ↩
204 ANI Statement of Response, ¶ 786. ↩
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eventual economic imbalance of the Agreement cannot generate damages or the recognition of profit, instead the project must be brought to a state of no loss.205 In turn, ANI argues that POB did not promptly request the reestablishment of the economic equilibrium.206
290. First, ANI objects to the competence of the Arbitral Tribunal on the economic reestablishment of the EPC Claims incurred in the context of the archaeological findings of UF 2. ANI argues that the Arbitral Tribunal should not rule on damages and/or compensations from or in relation to third parties who are outside the arbitration agreement and the Agreement.207 Since the main claim for the reestablishment of the economic equilibrium of UF 2, discussed herein, is based on damages of third parties, unrelated to the arbitration agreement and the Agreement, the Arbitral Tribunal cannot make any declaration or decision regarding compensation for these amounts.
291. Second, ANI concedes and agrees with POB that the archaeological findings in UF 2, constitute EERs, as determined by the Amiable Compositeur, and that, by virtue thereof, they are governed by Section 14.2 of the Concession Agreement, which is the special regime. It argues that there is a releasing effect not only for the Party suffering the EER, POB, but also exempting the other Party, ANI, from the recognition of losses, damages, expenses, charges or expenses incurred by the affected party during the special period.208 Furthermore, ANI argues that, by virtue of Section 14.2 (h) of the Agreement, POB is only entitled to the recognition of idle costs due to the longer stay on site.209
292. Third, ANI argues that there is no economic imbalance under Section 13.1 and 13.2 (ix) of the Concession Agreement, since the management of the archaeological findings
205 ANI Statement of Defense, ¶¶ 789, 793. ↩
206 ANI Statement of Defense, ¶ 754. ↩
207 ANI Statement of Defense, ¶¶ 548-561. In the same sense, ANI Rejoinder, ¶ 303-305. ↩
208 ANI Statement of Defense, ¶¶ 760-761, 768. ↩
209 ANI Statement of Defense, ¶¶ 762-764. ↩
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in UF 2 is a risk assumed by POB and the cost overruns are risks inherent to the performance of the Concession Agreement.210
293. ANI further states that the risk regime agreed in the Agreement cannot be modified. It affirms that POB assumed “the cost implied by the full and timely compliance with all the obligations and the assumption of the risks set forth in the Agreement and its Appendices and Annexes”.211 ANI further states that this assumption of risk is clear and is set forth in Section 2.6(v)(a) of the Agreement, in the “Representations and Warranties of the Parties".
294. Fourth, ANI argues that POB's breaches of its archaeological obligations and its negligence in overcoming the EERs212 negate the right to the reestablishment of the contractual equilibrium of the Agreement. ANI asserts that the archaeological and social obligations have not been diligently fulfilled by POB.213
295. ANI argues that “there is evidence of the Concessionaire's improper management, since today, there is no evidence of the performance of all the required Interventions in the road corridor for which POB was hired”.214 For the above reasons, ANI argues that:215
[I]n the interest of discussion, for the reestablishment of the economic equilibrium to be applicable, it is essential that the party requesting it has not contributed to its occurrence, which is not evident in the present case.
296. Fifth, ANI argues that in the event of a breach of the economic imbalance, the recognition of profits is not applicable, but rather the recognition of a loss is, and that the Concessionaire should be taken to a state of non-loss.216 Therefore, ANI states that there was no
210 ANI Statement of Defense, ¶¶ 755, 779, 782. ↩
211 ANI Statement of Defense, ¶ 778. ↩
212 ANI Statement of Defense, ¶¶ 33, 794. ↩
213 ANI Statement of Defense, ¶ 40. ↩
214 ANI Statement of Defense, ¶ 55 ↩
215 ANI Statement of Defense, ¶ 793. ↩
216 ANI Statement of Defense, ¶¶ 789-794. ↩
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breach of the contractual equilibrium because its requirements are not met, since there was no damage or loss of profit to be recognized in favor of POB.217
297. ANI states that the Council of State has concluded that “only the extra expenses or costs incurred by the contractor due to the excess or cost overrun caused by the unforeseeable and irresistible circumstance shall be recognized".218 POB is not entitled to the reestablishment of the equilibrium of the Agreement, since POB intends to be compensated for the profits it allegedly lost, and this remedy is not allowed under Colombian law.219
298. Sixth, ANI argues that, if there had been an imbalance in the contractual equation, POB did not allege this situation in a timely manner. ANI supports this position by pointing out that, by virtue of the principle of good faith, “the opportunity arises at the moment in which documents are executed that specify suspensions, additions, extensions of the contractual term, additional contracts, amendments, etc.”220 Therefore, the appropriate opportunity for this was at the time of requesting the EER declaration. Thus, ANI alleges that POB did not raise any objection related to the reestablishment of the contractual equilibrium in the request or in the declaration of the EERs. Additionally, ANI argues that it would also have been appropriate to raise the claim for the reestablishment of the contractual equilibrium at the time of the negotiation and/or signature of the Amendment number 8 and 9.221
299. The Arbitral Tribunal understands that the essence of POB's claim for economic reestablishment of UF2 is the so-called EPC Claims in the amount of $5.8 billion Colombian pesos. ANI has objected to this claim arguing that the Arbitral Tribunal has
217 ANI Statement of Defense, ¶ 796. ↩
218 ANI Statement of Defense, ¶ 791. ↩
219 ANI Statement of Defense, ¶ 795 ↩
220 ANI Statement of Defense, ¶ 798. ↩
221 ANI Rejoinder, ¶¶ 276-279. ↩
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no competence because the EPC Contractor is a third party outside this Arbitration. As discussed in this Award in the Section on Jurisdiction and Competence (Section IV.A.2), the Arbitral Tribunal agrees with ANI's objection. Therefore, the Arbitral Tribunal declares that it has no competence to decide POB's claim on the economic reestablishment of UF 2 since that claim is based on EPC Claims, which is constituted by damages suffered by a third party, external to this Arbitration, over which this Arbitral Tribunal has no competence.222
300. The Claimants' most relevant claim, as regards the amount of compensation requested, is in relation to ANI's alleged breaches that “prevent the Project originally conceived by the Respondent from being performed".223 The foregoing would be manifested insofar as ANI:224
[D]id not identify the existence of more than sixty (60) water springs within one hundred (100) meters of the road corridor of UFs 4 and 5. This omission has material effects on the Project, since the Colombian legal system prohibits the execution of any activity other than the harvesting of secondary forest fruits within 100 meters of the springs. Therefore, the environmental protections in force in Colombian law do not allow POB to carry out the Interventions in the terms required by ANI in the road corridor of UFs 4 and 5.
301. The Claimants argue that, in light of this breach, the Concessionaire displayed diligent conduct in order to find solutions, exercising the available contractual remedies and requesting ANI to recognize an EER. They define an EER as an Exemption of Liability Event for POB's performance of the
222 POB's subsequent and alternative claim for compensation for the total damages alleged, including compensation for UF2, in relation to the Respondent's claim for early termination, will be discussed in Section IV.E.1 of this Award. ↩
223 POB and S&B Statement of Claim, ¶ 6. ↩
224 POB and S&B Statement of Claim, ¶ 8. ↩
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affected obligations. They state that the existence of the EER does not exempt ANI from liability for its breaches.225
302. They indicate that, in the EER Minutes, the Parties assumed certain obligations aimed at overcoming the EER. However, ANI failed to comply with its obligations, leading to the Concessionaire's inability to execute the Interventions provided for in UFs 4 and 5.226
303. The Claimants point out that the foregoing means that the Concessionaire could not obtain the Retributions associated with UFs 4 and 5, which would amount to approximately 58% of the total Retribution foreseen under the Concession Agreement, as well as having incurred additional financial damages.227
304. The Claimants emphasize that they had to resort to the Emergency Arbitrator to order ANI to refrain from continuing with the sanctioning procedures, from declaring defaults and imposing sanctions on POB, as a result of its inability to perform the Interventions in UFs 4 and 5.228
305. The Claimants charge ANI with breaches of its obligations under the EER Minutes, agreed to overcome the EER.229
306. The Claimants accuse the Respondent of wanting to benefit from its own fault, because it seeks the Early Termination of the Agreement as 730 days have elapsed since the completion of the original term foreseen for the termination of UFs 4 and 5, without having been able to overcome the EER, as changing the layout of the Project is prohibited, since this would amount to a change in the subject matter of the Agreement.230
225 POB and S&B Statement of Claim ¶ 10. ↩
226 POB and S&B Statement of Claim, ¶¶ 11-16. ↩
227 POB and S&B Statement of Claim, ¶¶ 17-18. ↩
228 POB and S&B Statement of Claim, ¶¶ 21-23. ↩
229 POB and S&B Statement of Claim, ¶ 14. ↩
230 POB and S&B Statement of Claim, ¶¶ 27-29. ↩
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307. The Respondent, in turn, argues that:231
i) ANI had no obligation to identify the springs of UFs 4 and 5 at the project structuring stage; ii) neither the sections of the terms and conditions nor the clauses of Agreement 002 of 2014 related to the contracting entity's limitation of liability are ineffective; iii) the declaration of an EER in UFs 4 and 5 releases the parties to the Agreement, not only POB, from compliance.
308. Consistently with this, ANI filed a Counterclaim, arguing that POB breached its obligations with respect to UFs 4 and 5, arguments reiterated in its Counter-Memorial.
309. ANI claims that POB should have identified the springs in the Preconstruction Phase, since it was in charge of preparing the definitive designs. Likewise, it assumed the risk of requesting the necessary permits from the environmental authorities.232
310. ANI indicates that the EER Minutes dated 1 August 2018, established that an extraordinary situation had arisen, which prevented them from fulfilling the obligations related to UFs 4 and 5 and that no reciprocal economic claims would be filed for that cause.233
311. It affirms that POB had not adequately complied with Activity 1 of the EER Minutes, which would have forced ANI to initiate working groups with different entities, in order to achieve the performance of the Agreement. For its part:234
[A]ctivity No. 2, i.e., the execution of an Amendment in which the original layout is modified, is not possible, since it would change the subject matter of the Agreement, a modification that is not allowed according to the jurisprudence of the Constitutional Court [Corte Constitutional] and the Council of State [Consejo de Estado].
231 ANI Statement of Defense, ¶ 19. ↩
232 ANI Statement of Defense, ¶ 20.i. See also, ANI Statement of Counterclaim, pp. 212-215. ↩
233 ANI Statement of Defense, ¶ 20.iii. See also, ANI Statement of Counterclaim, pp. 290-291. ↩
234 ANI Statement of Defense, ¶ 20.iii. See also, ANI Statement of Counterclaim, pp. 291-296. ↩
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312. ANI alleges that the Concessionaire did not perform the works of UFs 4 and 5, and therefore, in ANI's opinion, it cannot claim the corresponding Retribution.235
313. ANI points out that, if the Arbitral Tribunal considers that the Concessionaire complied with Activity 1 of the EER Minutes, such activity has not been completed, since the environmental authorities have not yet rejected the possibility of continuing the Project with the original route. It indicates that the provisions of Section 14.1(e) of the Agreement should be applied, i.e., to declare its Early Termination, given that 730 days have elapsed since the completion of the term originally foreseen for the completion of UFs 4 and 5, without being able to overcome the EER and that the change in the Project's layout is prohibited, because it is equivalent to a change in the object of the Agreement.236
314. The Claimants allege that ANI had the obligation to identify the springs in UFs 4 and 5 during the structuring of the Agreement, inasmuch as ANI has the obligation to carry out the environmental studies that are necessary to guarantee the feasibility of the contracts that it structures.237
315. Among other constitutional and legal norms, the Claimants highlight Article 24 of Law 80 of 1993 on the General Statute of Public Procurement in Colombia, which establishes the “principle of transparency” that renders ineffective as a matter of law the stipulations of the bidding documents and contracts that are contrary to the provisions of the foregoing section, or that provide for waivers of claims due to the occurrence of the facts set forth herein.238 They emphasize that what is stated in section 1.9 of the
235 ANI Statement of Defense, ¶ 20.vii. ↩
236 ANI Statement of Defense, ¶ 20.xi. ↩
237 POB and S&B Statement of Claim, ¶ 67. ↩
238 POB and S&B Statement of Claim, ¶ 80; Exhibit CL-062; Exhibit CL-066. ↩
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Tender Terms and Conditions, regarding the referential nature of the information,239 would be ineffective by law and has no value or effect, as can be seen from article 24 of Law 80 of 1993.240
316. The Claimants argue that ANI “structured the Project, determined that it was feasible and conducted the Tender”.241 They point out that ANI had a team of advisors of great national and international recognition for the structuring of the Project, such as FONADE, IFC, and the Temporary Union of Euroestudios - Durán & Osorio - Deloitte.242
317. The Claimants add that “ANI and its Structuring Team did not include any springs or water sources in the list of water bodies that would be affected by UFs 4 and 5", and that they indicated there were some springs in the area, but in places of remote access and primary forest locations.243
318. The Claimants allege that ANI's breaches:244
[I]n relation to its legal and contractual duties to properly structure the Concession Agreement led to the impossibility of performing the Interventions in UFs 4 and 5. Such impossibility was acknowledged by the Parties in the EER Minutes.
319. In particular, they point out that, if ANI had identified the springs promptly, it would have modified the layout of UFs 4 and 5.245
239 POB and S&B Statement of Claim, ¶ 362. 1.9.2: "The availability of studies and concepts in the Reference Data Room is only intended to facilitate access to the information stored in ANI's and/or INVIAS' archives. Therefore, the studies and concepts will be available for information purposes only, it being understood therefore that they are not information delivered by ANI for purposes of the presentation of the Tender Bids, nor do they generate any ANI's obligation or responsibility and, therefore, they are not part of the Terms and Conditions or of the Agreement." ↩
240 POB and S&B Statement of Claim, ¶¶ 363-365, with references to the case of Concesión Transversal del Sisga S.A.S. v ANI, CL-065. ↩
241 POB and S&B Statement of Claim, ¶¶ 106-108. Exhibit CL-070: Article 12 of Law 1682 of 2013 ↩
242 POB and S&B Statement of Claim, ¶ 115.i. ↩
243 POB and S&B Statement of Claim, ¶ 118.iii.a, b and c; C-085(g). ↩
244 POB and S&B Statement of Claim, ¶ 336. ↩
245 POB and S&B Statement of Claim, ¶ 337. ↩
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320. The Claimants argue that Legislative Decree 2811 of 1974, the Natural Resources Code in Colombia, establishes the classification of “protective forest areas," with a strict environmental conservation regime.246 In turn, Article 3 of Decree 1449 of 1977 (compiled in Article 2.2.1.1.18.2 of Decree 1076 of 2015) establishes the definition of the protective forest areas that extend 100 meters around the periphery of the springs.247
321. The joint application of both provisions leads the Claimants to conclude that:248
(a) [A]reas within 100 meters around the springs must be covered by forests, natural or artificial, and (b) the only activity permitted within said forests is the use of their secondary fruits.
322. Along these lines, Corporinoquía imposed the following obligation on POB:249
If there are water springs in the project area, a minimum distance of 100 meters must be kept to protect them.
323. The Claimants claim to have received the corresponding PAGA for UFs 1 to 5 and the Environmental License for the Choachí Variant, in accordance with ANLA's requirements, without the need to carry out specialized technical studies that could allow for the identification of the springs.250
324. The Claimants state that on 16 January 2016, the Parties executed the Construction Phase Commencement Minutes.251 In August 2016 “the Concessionaire began to
246 POB and S&B Statement of Claim, ¶ 111. ↩
247 Exhibit CL-005. ↩
248 POB and S&B Statement of Claim, ¶ 113. ↩
249 POB and S&B Statement of Claim, ¶ 162; C-105, "Obligations", numeral 2, p. 29. ↩
250 POB and S&B Statement of Claim, ¶¶ 158-161; ¶ 369. ↩
251 POB and S&B Statement of Claim, ¶ 167, C-106. ↩
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receive PQRs from members of the community neighboring the Project warning of the possible existence of springs around the layout of UFs 4 and 5".252
325. Based on this information, the Concessionaire states that it contracted studies with the Pontificia Universidad Javeriana between October 2016 and October 2017.253 Additionally, it hired the consulting firm SIAM S.A., which worked between September 2017 and April 2018254.
326. The Claimants state that:255
SIAM concluded that there were 55 water springs within 100 meters around each side of the Project axis in UFs 4 and 5. In June 2018, after a series of methodological adjustments requested by the Supervisor, SIAM reclassified some water sources and determined that 61 of them were springs. Those 61 springs, added to the 5 found by Javeriana in its report, totaled 66 springs within 100 meters around the layout of UFs 4 and 5.
327. The Claimants emphasize that the process took about 1.5 years of studies and resulted in the identification of 66 springs within 100 meters around each side of the road axis in UFs 4 and 5.256 This time greatly exceeds the period provided for in the Tender Terms and Conditions for submitting bids, which was 7 months.257
328. They emphasize that ANI did not initiate any sanctioning proceedings against POB on the existence of the springs, which is indicative that ANI did not consider that the Concessionaire could be in breach of the Agreement.258
252 POB and S&B Statement of Claim, ¶ 168; C-002. ↩
253 POB and S&B Statement of Claim, ¶¶ 172-174. ↩
254 POB and S&B Statement of Claim, ¶¶ 177-179; 370. ↩
255 POB and S&B Statement of Claim, ¶ 179. ↩
256 POB and S&B Statement of Claim, ¶ 180. ↩
257 POB and S&B Statement of Claim, ¶ 361.iii. ↩
258 POB and S&B Statement of Claim, ¶ 372. ↩
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329. On 14 November 2017, with the first results from Universidad Javeriana, POB sent the First EER Notice, indicating that said event had arisen as of 31 October 2017, when POB became aware of said results.259 POB reiterated these notices on 27 February 2018260 and 28 April 2018.261
330. On 1 August 2018, the EER Minutes were executed.262
331. The Claimants argue that, in the EER Minutes, the Parties agreed that the term for the performance of all works and activities associated with UFs 4 and 5 was suspended, meaning that POB is exempt from liability for delays in the performance of such UFs.263 In addition, some specific obligations were established "provided that they are not affected by the present EER declaration”.264
332. ANI argues that it has fully complied with its duty to plan the Project, since it was not responsible for carrying out the final designs and detailed studies of the Preconstruction Phase based on which the construction of the works would be carried out.265
333. It argues that, in compliance with the duty of planning, the structuring of the Project complied with the environmental requirements, according to the consultation made to the ANLA, carried out the Environmental Diagnosis of Alternatives for the Choachí variant requested by the ANLA and established the guidelines of the environmental impact study for the Calera-Cáqueza sector.266 With respect to the Choachí variant, the Structural Engineer reportedly carried out the
259 POB and S&B Statement of Claim, ¶ 186. ↩
260 POB and S&B Statement of Claim, ¶ 188. ↩
261 POB and S&B Statement of Claim, ¶ 191, C-109. ↩
262 Exhibit C-002. ↩
263 POB and S&B Statement of Claim, ¶ 211. ↩
264 POB and S&B Statement of Claim, ¶ 221. ↩
265 ANI Statement of Defense, ¶ 20.i; ¶ 134, Exhibit 8.1.34.46; ¶ 144, Exhibit 8.1.34.43. ↩
266 ANI Statement of Defense, ¶¶ 135-137. ↩
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environmental diagnosis of alternatives, choosing alternative 3 on a multi-criteria evaluation, which was approved by ANLA,267 and the Concessionaire must carry out the Environmental Impact Study according to Technical Appendix 6.268 ANI is emphatic in pointing out that neither the Entity nor its Structuring Company had the obligation to identify the springs of UFs 4 and 5, and that it was the Concessionaire who should have identified them to adjust its definitive designs so that the Project could continue.269
334. ANI denies that subparagraph d) of paragraph 5 of Article 24 of Law 80 of 1993 applies, since section 1.9.2. of the Bidding Documents is not a liability exemption clause, but rather, it establishes that the availability of the studies and concepts made by ANI does not constitute the delivery of information for the submission of bids, therefore, no claims may be derived during the performance of the Agreement based on this information.270
335. ANI states that, just as the Concessionaire detected the water sources during the performance of the Project, “it could also have noticed them during the Selection Process phase of the public Tender when it was aware of and verified the studies carried out by the structurer".271 ANI accuses POB of lack of diligence in the identification of the water points and denies that it acted diligently, given that it was not until the Construction Phase of the Project, and in response to complaints from the community, that POB became aware of the water springs in the surroundings of UFs 4 and 5.272
336. It also accuses POB of not having identified the presence of water springs at the time of obtaining the Environmental License, as well as during the preparation of
267 ANI Statement of Defense, ¶ 139, Exhibit 8.1.34.43. ↩
268 ANI Statement of Defense, ¶ 140, Exhibit 8.1.3.6. ↩
269 ANI Statement of Defense, ¶ 580 ↩
270 ANI Statement of Defense, ¶ 20.ii; ¶ 583-593; ¶ 704-707; Tender Terms and Conditions Draft No. VJ-VEIP-LP-010-2013, cl. 1.9.2 ↩
271 ANI Statement of Defense, ¶ 147. ↩
272 ANI Statement of Defense, ¶¶ 179-186. ↩
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the documents that make up the PAGA, in which some of the springs were described as runoff.273
337. Along with the above, ANI acknowledges in multiple passages of its submissions that the presence of the springs makes the performance of UFs 4 and 5 unfeasible, but disagrees, however, on the responsibility for the impact generated by this. For example, it states that:274
[F]or reasons attributable to POB, currently the activities of improvement of UFs 4 and 5 of the Agreement cannot be performed due to the presence of water springs that were recognized by the EER in UFs 4 and 5, as stated in the Minutes of 1 August 2018.
338. At the same time, ANI also states that the presence of springs does not make the Project unfeasible:275
It is not true that due to the presence of springs in UFs 4 and 5 the project is unfeasible, it is reiterated that the mere existence of springs in the corridor, although it generates the need to analyze alternatives from the environmental point of view for their management, under no scenario determines the unfeasibility of the project.
339. As indicated in Section 14.2 paragraph b) of the Agreement:
An Exemption of Liability Event comprises any event, circumstance or combination of events or circumstances beyond the reasonable control of the Party invoking it, which substantially and adversely affects the performance of the obligations under the Agreement, with respect to which it is invoked; after having taken all reasonable steps to prevent it. The concept of an Exemption of Liability Event shall
273 ANI Statement of Defense, ¶¶ 167-171. ↩
274 ANI Statement of Defense, ¶ 160; ¶ 219. ↩
275 ANI Statement of Defense, ¶ 233; ¶ 273 ↩
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include any event of Force Majeure, including Property Force Majeure, Environmental Force Majeure and Public Utilities Network Force Majeure.
340. The effects of an EER, according to Section 14.2 paragraph a) of the Agreement, are as follows:
The Parties shall be exempted from liability for any delay in the performance of the obligations under the Agreement, when upon due verification it is concluded by agreement of the Parties or, failing such agreement, by the Amiable Compositeur, that the delay is the result of facts that may be defined as an Exemption of Liability Event, under the terms of this Section 14.2. Delay in performance by any subcontractor shall not in itself be deemed as an Exemption of Liability Event unless the existence of such circumstance is itself the result of an Exemption of Liability Event.
341. ANI also assures that the presence of the springs is due to a breach of POB's obligations, who had assumed the risk of environmental management. There are a series of contractual provisions that regulate the allocation of risks between the Parties.
342. Section 2.6(a)v of the Agreement contains the Agreement acceptance statement, which states that the Concessionaire studied the terms of the documents that form part of the Agreement, made its observations and, likewise, “in the terms of Article 24 of Law 80 of 1993 and in general of the rules and principles applicable to public procurement", informed ANI of the sections that were not clear to it, which were clarified. It is further indicated that the Concessionaire:
[A]ccepts the terms and conditions of the Agreement to the extent that it has studied them, it has carefully assessed the costs involved in the full and timely compliance in accordance with the terms of the Agreement of all the obligations and the assumption of the risks set forth in the Agreement, its Appendices and Annexes. In particular, it declares that it has made an assessment of the risks under its responsibility in accordance with the terms of this Agreements and
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accepts said assumption of their favorable and unfavorable effects without limitation.
343. In the same vein, Section 2.6(a)xi of the Agreement indicates that the Concessionaire declares that it is aware of "all matters and information related to the execution and performance of the Agreement”, “the actual possibility of performing all the obligations under the Agreement with the available resources, as well as the places where the Agreement will be performed”, “soil conditions, climatic, rainfall and topographic conditions”, and “in general, all other aspects that may affect the performance of the Agreement, all of which were taken into account in the preparation of the Concessionaire's Bid".
344. It is then stated:
Likewise, the Concessionaire declares and warrants that it has carried out the complete examination of the work sites and that it has fully investigated the risks associated with the Project, and in general, all the factors determining the costs of performing the works, which were included in the economic components of its Bid, strictly taking into account the retribution structure stipulated in the Agreement, notwithstanding the coverage of the effects derived from some risks under the strict terms of the Agreement. The fact that the Concessionaire has not acquired all the information that may influence the determination of the costs will not exempt it from responsibility for the complete performance of the Project in accordance with the Agreement, nor will it entitle it to any additional payment from ANI, because the Concessionaire assumed the burden of diligence to carry out the necessary investigations and verifications to prepare its Bid.
345. With respect to the risks assumed by ANI, Section 2.6(b)iv of the Agreement states that it:
Has made available to the Concessionaire the information at its disposal in relation to the Project. Notwithstanding the foregoing, ANI states that it does not guarantee that such information is complete, adequate or sufficient, and it is the responsibility of the
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Concessionaire to carry out due diligence on each of these aspects.
346. Finally, Legislative Decree 2811 of 1974, Colombia's Natural Resources Code, establishes the classification of “protective forest areas”, with a strict environmental conservation regime.276 Article 204 of the cited Code establishes the following:277
A protective forest area is the area that must be permanently preserved with natural or artificial forests, to protect these same resources or other renewable natural resources.
In the protective forest area, the protective effect must prevail and only the harvesting of secondary forest fruits will be allowed.
347. In turn, article 3 of Decree 1449 of 1977 (compiled in article 2.2.1.1.18.2 of Decree 1076 of 2015) establishes the following:278
Protective Forest Areas comprise: a. The sources of water springs in an extension of at least 100 meters all around, measured from their periphery.
348. First, from the joint reading of Article 2.2.1.1.18.2 of Decree 1076 of 2015 and Article 204 of Decree 2811 of 1974, cited above, it follows that, the areas of at least 100 meters around the water springs constitute protective forest areas, where only the collection of secondary fruits of the forest is allowed. An activity such as construction or any other type of similar intervention is not allowed within 100 meters around water sources.
276 POB and S&B Statement of Claim, ¶ 111. ↩
277 Exhibit CL-004. ↩
278 Exhibit CL-005. ↩
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349. The above clearly shows a difficulty in performing the Agreement, given that the layout covered by the Agreement crosses protected forest areas. Thus, carrying out most of the Interventions in UFs 4 and 5 becomes legally impossible due to the presence of the springs.
350. The question arises as to which of the Parties bears responsibility for the existence of the springs or for the failure to detect them in a timely manner.
351. Notwithstanding the contractual clauses that assign a wide range of risks and responsibilities to the Concessionaire, the Parties executed the EER Minutes, i.e., the “EER Minutes Declaring an EER and the Consequent Suspension of the Performance of the Works and Activities for the Interventions of Functional Units 4 and 5, due to the aforementioned Declaration”.279 In said document, both Parties acknowledge that the Exemption of Liability Event was caused as a result of the presence of the springs:
[They] acknowledge, agree and accept that the existence of springs of water sources (springs) in Functional Units 4 and 5, including the Choachí variant, constitutes an Exemption of Liability Event as of 31 October 2017.
As a consequence of the occurrence and declaration of this Exemption of Liability Event, the Parties agree to SUSPEND as of 31 October 2017 the term for the performance of all works and activities associated with the Interventions corresponding to Functional Units 4 and 5 of the Project (including the Choachí variant).
352. By signing the EER Minutes, ANI acknowledged that the presence of the springs was the cause of the suspension of the works and activities of the Interventions in UFs 4 and 5, releasing POB from its obligation to carry out such works and activities, and POB was not responsible for such suspension. The sole execution of the EER Minutes by the Parties constitutes an indication that, due to
279 Exhibit CL-002. Written Statement of Undisputed Facts, ¶ 27-30. ↩
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the presence of the springs, the performance of UFs 4 and 5 becomes legally unfeasible, due to the prohibition to perform construction and similar activities in the protective forest areas.
353. Likewise, the expert opinion of Juan Carlos Valenzuela Miranda annexed by the Claimants, which was not challenged by any expert evidence of ANI, concludes that the presence of groundwater springs or water sources of subterranean origin that emerge from a rock or the ground produces the classification of the area as a protective forest area.280 In this area, in addition to the obligation to preserve the forest cover, only the activity related to obtaining secondary fruits from the forest is permitted.281
354. As indicated, it is confirmed that the presence of the springs leads to the legal impossibility of performing all the Interventions of UFs 4 and 5.
355. Second, the Arbitral Tribunal inquires whether it was ANI's responsibility to detect the presence of the springs before opening the Tender for the Project.
356. Article 11 of Law 1508 of 2012, which regulates the legal regime of Public-Private Partnerships, establishes the requirements for opening concessionaire selection processes. Subsection 1 of Article 11 establishes the obligation to have “updated technical, socioeconomic, environmental, property, financial and legal studies in accordance with the project".282 Likewise, subsection 5 of Article 11 of the same Law requires, as a requirement for issuing the invitation, to have "[t]he appropriate classification, estimation and assignment of risks, possible contingencies” and “the respective risk matrix associated with the project".283
357. In turn, Article 7 of Law 1682 of 2013 establishes that:284
280 Exhibit CER-003. ↩
281 Exhibit CER-003, p. 11. ↩
282 Exhibit CL-056. ↩
283 Exhibit CL-056. ↩
284 Exhibit CL-069, letter c). ↩
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Public entities and persons responsible for the planning of transportation infrastructure projects shall identify and comprehensively analyze during the structuring stage, the existence in the direct and indirect area of influence of the project [including] exclusion or protected areas.
358. For the purpose of obtaining this information, “they shall request such information from the authorities [...] in charge of these activities or services”.285
359. It cannot be assumed that the information obligations can be complied with in a merely formal manner, that is, by delivering studies that do not correspond to reality or by providing a classification and allocation of risks without having correctly detected the risks. Rather, what emerges from the aforementioned legislation is the need for the corresponding state entity to provide reliable information that allows the Tender to be carried out with certainty and transparency.
360. The Arbitral Tribunal takes into consideration what is stated in the legal report of expert witness Gonzalo Suárez Beltrán, who demonstrates the existence, in the Colombian legal system, of the principle of planning and feasibility of the projects, which permeates the process of project structuring and the selection of contractors286.
361. The Arbitral Tribunal also takes into consideration the report of the expert Juan Carlos Valenzuela, who, acting within the scope of his expertise regarding the structuring of projects, states that:287
It is the duty of the state entities, by virtue of the principle of planning, transparency and economy, to have prior studies that allow them to define in the bidding documents clear, precise and specific rules that, as they constitute the premises that will govern the Agreement, guarantee the performance of its object.
285 Exhibit CL-069. ↩
286 Exhibit CER-007, ¶¶ 16-29. ↩
287 Exhibit CER-003, p. 12. ↩
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ANI was the state entity responsible for structuring the Project and thus ensuring its feasibility; therefore, it was obliged to carry out prior studies in order to analyze its suitability and to guarantee that the Project could be performed under the terms set forth in the bidding process within the Prefeasibility and Feasibility Stage (studies that include the environmental component).
362. The Arbitral Tribunal, likewise, highlights what is stated in the Report of the Comptroller's Office “Performance Audit Report to the Ministry of Transportation, the National Infrastructure Agency [and others] in the structuring, implementation and performance of the 4G road concession program [...]" issued in November 2019, which found that:288
In the structuring of the Perimetral del Oriente de Cundinamarca Concession all the environmental conditions of the areas that the concession project intended to intervene in were not taken into account and, consequently, it was not possible to establish the affectation and mitigation of the impacts that could be generated in the environmental resources, specifically in the sections of the functional units 4 and 5 of the project, since the “Terms of Reference Feasibility Annex 02 Group 03 OCC 0162012” were not taken into account [...].
363. In particular, the obligation of the Structuring Team to identify forest reserve areas and water recharge zones along the planned corridor was allegedly breached. As regards the origin of this problem —that is, the structuring of the Project— the Report adds:
This situation affects ANI's performance with respect to its responsibility for the evaluation of these structuring proceedings due to the fact that there is no evidence that ANI expressed its opinion on the inconsistencies found in the structuring of the project, among them the identification of some contradictions within the same report of the structurer, for example, the need for Environmental Impact Studies and the non-identification of the real conditions
288 Exhibit C-039; Exhibit C-082. ↩
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of the project area. Furthermore, the effect this has on the configuration of possible Exemption of Liability Events.
364. The Comptroller's Office reiterated these conclusions in the Performance Audit Report of June 2020, accusing ANI of not having taken the necessary measures to reflect the environmental reality of the area affected by the Project:289
ANI recognizes and validates the observation submitted by the Comptroller's Office, confirming its findings, taking into account that since the structuring of the project it did not take all the necessary measures, nor did it carry out all the adequate and pertinent steps, that would reflect the environmental reality of the area affected by the project, [...], with the negative consequences that to date are present and are related to the suspension of the performance of the works of Functional Units 4 and 5.
365. From the analysis of the aforementioned regulations and the facts, the Tribunal concludes that it was ANI's responsibility to detect the presence of the springs in a timely manner, prior to opening the Tender of the Agreement. In fact, timely detection of the springs would have allowed structuring of the Project in such a way that it would have been feasible, avoiding the need for its paralysis due to the EER.
366. Third, the Arbitral Tribunal will analyze whether the information provided by ANI should have been considered final or binding. ANI is emphatic in pointing out that the information provided by ANI to carry out the Tender was referential and non-binding information. This allegedly follows from what is stated in section 1.9.2 of the Tender Terms and Conditions.
367. Likewise, in Section 2.6 of the Agreement referenced above, it is stated that ANI provided all the information available to it, but this should not be considered “complete, adequate or sufficient”.
368. Although the information provided by ANI may not be complete, it cannot be, nor does ANI claim it to be, wrong or false. Thus, when such information indicates
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that no springs are found, there is no reason for the Concessionaire to doubt it.
369. This is the case of the document "Characterization of the area of influence of the project", provided by ANI in the tender, which indicates the following with respect to "Hydrogeology":290
In the study area of the alternatives for the crossing of the municipality of Choachí, there are no wells, cisterns, springs or sources (nacederos), taking into account the consultation made to the Regional Autonomous Corporation of the Orinoco - CORPORINOQUIA.
370. It should be noted that this specialty is the one that allows the presence of springs to be detected. This was clarified by the Claimants' expert, Mr. Juan Carlos Valenzuela. In response to the Arbitral Tribunal's question on the specialty of the studies to be carried out to detect the springs, namely, hydraulic, hydrological or hydrogeological, expert witness Valenzuela replied:291
These are studies of hydrogeology, which is the subsurface resource of the soil and subsoil, and they establish groundwater. The other two deal with surface waters.
371. In the same line, the Arbitral Tribunal considers that paragraph 1.9.2 of the Tender Terms and Conditions cannot have the effect that the Respondent intends to assign to it.292
372. In the interpretation of the Agreement, the Arbitral Tribunal shall bear in mind "the purposes and principles” of Law 80 of 1993, as well as “the mandates of good faith",293 the same mandate established in Article 1603 of the Civil Code294 and in
290 Exhibit C-085(b). ↩
291 Witness statement of Mr. Juan Carlos Valenzuela, 00:49:45. ↩
292 R-11: "1.9.2. The availability of studies and concepts in the Reference Data Room is only intended to facilitate access to the information stored in ANI's and/or INVIAS' archives. Therefore, the studies and concepts will be available for information purposes only, it being understood therefore that they are not information delivered by ANI for purposes of the presentation of the Tender Bids, nor do they generate any ANI's obligation or responsibility, and, therefore, they are not part of the Tender Terms and Conditions or of the Agreements." ↩
293 Exhibit CL-008. ↩
294 Exhibit CL-009. ↩
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article 871 of the Commercial Code,295 in light of the provisions set forth in article 13 of Law 80 of 1993.296
373. According to the legal report of the expert Dr. Gonzalo Suárez Beltrán, annexed by the Claimants and not disputed by ANI:297
One of the fundamental principles in matters of public procurement in Colombia is the general principle of good faith or bona fides, both subjective and objective, which must be observed in the pre-contractual and contractual stages, within the framework of all types and forms of contractor selection. This principle is enshrined in Article 83 of Colombia's Political Constitution, which is why it applies to all the actions of public authorities, as well as private parties, and it is applicable to all matters related to the execution and performance of state contracts, including concession contracts entered into under the PPP scheme of Law 1508 of 2012.
374. It would go against good faith to assume that a concessionaire should ignore the information provided by the state entity, considering that it would not be reliable. The foregoing would alter the very essence of a bidding process, during which the bidders must make their best offers under equal conditions. This also applies to the case in which, in order to submit a bid, each bidder would have to carry out preliminary studies, often long and costly.
375. The expert report submitted by the Claimants states along these lines:298
Neither POB nor the other bidders were required to conduct hydrogeological studies (much less characterization of springs, hydrogeochemical or isotopic interpretation), protected areas studies or studies in many other areas; simply because the project planner had already studied them and had established that there were no springs in the area. Furthermore, if they had wanted to do so, they
295 Exhibit CL-010. ↩
296 Exhibit CL-019. ↩
297 Exhibit CER-007, ¶ 12, original citation omitted. ↩
298 Exhibit CER-003. ↩
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would not have had enough time to prepare the proposal because it would have been impossible.
376. The Claimants seek a declaration that Section 2.6 of the Agreement is null and void by virtue of Article 24 of Law 80 of 1993.
377. Article 24 of Law 80 of 1993 contains a series of key mandates for the interpretation of the Terms and Conditions and their effects:299
5. In the terms and conditions:
[...] b) Objective, fair and clear, and complete rules shall be defined to allow the preparation of bids with the same character, ensure an objective choice and avoid the declaration of desertion of the tender;
[...] d) Conditions and requirements that are impossible to comply with shall not be included, nor shall exemptions from liability derived from the data, reports and documents provided.
e) Rules shall be defined to avoid misleading bidders and contractors and to prevent the formulation of offers with unlimited extension or that depend on the exclusive will of the entity.
[...] Any provisions in the bidding documents and contracts that are contrary to the provisions of this section, or that provide for waivers of claims due to the occurrence of the events set forth herein, shall be ineffective by operation of law.
378. As stated in article 1602 of the Civil Code:300
Every legally concluded contract is law for the contracting parties, and cannot be invalidated except by their mutual consent or for legal reasons.
299 Exhibit CL-066. ↩
300 Exhibit CL-097. ↩
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379. In turn, Article 897 of the Commercial Code establishes the definition of “ineffectiveness by operation of law” as meaning “without the need for a judicial declaration".301
380. In view of the foregoing, any stipulation in the Bidding Documents or the Agreement, which entails a waiver by the Concessionaire to invoke its rights derived from the information of the Tender, shall be deemed unwritten. Thus, the Respondent's exemption of liability contained in clause 2.6 of the Agreement constitutes an unlawful condition within the meaning of Article 24(d) of Law 80 of 1993.
381. The above supports the Arbitral Tribunal's opinion that POB had not waived its ability to claim or exercise any other right in relation to ANI's eventual breach of its obligation to identify the presence of the springs and to report it in a timely manner, i.e., in the Tender process. Therefore, the information shared by ANI during the Tender should have been considered by the Claimants as accurate and binding information. Since it was pointed out that the Hydrology studies did not indicate the presence of the springs, there were no reasons for the Claimants to distrust such information.
382. Fourth, the Arbitral Tribunal will analyze whether the presence of the springs is a risk that was expressly transferred to POB in the Agreement.
383. Section 2.6.a.v of the Agreement, which contains the Acceptance of the Agreement statement, also states that the Concessionaire had:
[M]ade an appraisal of the risks at its own expense under the terms of this Agreement and that it accepts such assumption of their favorable and unfavorable effects without limitation.
384. In the Arbitral Tribunal's opinion, and strictly following the above-mentioned principle of contractual good faith, this provision could only have taken effect if ANI had provided correct and complete information regarding the presence of the springs within the scope of the concession. Having failed to do so, this Arbitral Tribunal
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cannot understand that the Concessionaire's intention was to accept risks that, according to the information provided to it, were unknown, unforeseen, and unexpected.
385. In turn, Section 2.6.a.xi of the Agreement,302 quoted above, can only be understood as an assertion of having carried out the investigation of the risks that were within the Concessionaire's control, not of those that should have been detected and informed by the Respondent.
386. As to the specific risks assumed by POB, among the Concessionaire's Main Obligations during the Preconstruction Phase is to establish under its own responsibility whether it is necessary to obtain the Environmental Licenses required (Section 4.2.j) and to process and obtain “all permits, licenses, authorizations and concessions to develop the Project" (Section 4.2.k). The same applies to the Construction Phase (Section 4.5.f and g).
387. It is not in dispute that POB obtained the respective permits.303
388. However, even if POB had processed the Environmental License and the PAGA differently, accounting for the existence of the springs, this would not have changed the fact that UFs 4 and 5 were affected by the existence of the springs, with no construction activity allowed within 100 meters around them.
302 Likewise, the Concessionaire declares and warrants that it has carried out the complete examination of the work sites and that it has fully investigated the risks associated with the Project, and in general, all the factors determining the performance cost of the works, which were included in the economic components of its Bid, strictly taking into account the contribution structure stipulated in the Agreement, without prejudice to the coverage of the effects derived from some risks under the strict terms of the Agreement. The fact that the Concessionaire has not obtained all the information that may influence the determination of the costs will not exempt it from liability on the complete performance of the Project in accordance with the Agreement, nor will it entitle it to any additional recognition by ANI, since the Concessionaire assumed the burden of diligence to carry out the necessary investigations and verifications to prepare its Bid. ↩
303 Exhibit C-015. ↩
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389. This is also evident from the report of the expert witness Juan Carlos Valenzuela, which was not contested by ANI through other expert evidence, in the sense that:304
In UF4, the interference of the protective forest area made up of 100 m around the sources and/or springs along the route of the road for 87.5% of them, that is, for 14 of the 16 springs identified and classified by the Concessionaire during the performance of the Concession Agreement No. 002 of 2014, was given from the time the project was structured by ANI.
In the UF5 (including the Choachí Variant) the interference of the protective forest area formed by the 100 m around the sources and/or springs for 100% of them, that is, for all 56 springs identified and classified by the Concessionaire during the performance of the Concession Agreement No. 002 of 2014, was given from the moment the project was structured by ANI.
Therefore, as a result of the above studies, 16 springs were identified in UF4 and 56 springs in UF5 (including the Choachí Variant), for a total of 72, of which 97.2% show interference with the corridor with which the project was structured and which was declared to be of public interest by ANI.
390. In turn, the Concessionaire had to comply with Section 8.1 on “Social and Environmental Management” and Technical Appendices 6 and 8 of the Agreement (Section 8.1.a). The first obligation assigned to the Concessionaire in this context is that, again, to begin the Interventions in a UF, the Concessionaire must have the Environmental License or PAGA and the remaining environmental permits, licenses and concessions (Section 8.1.b).
391. However, it is not clear that if POB had conducted Environmental Management differently, it could have overcome the ban on construction activities in forest reserve
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areas. In other words, the problem generated by the presence of the springs in the layout of UFs 4 and 5 could not have been solved through greater or better Environmental Management by POB.
392. A reference document on this matter, which guided the preparation of the Agreement, is CONPES 3760 for “Road Projects under the Public-Private Partnership Scheme: Fourth Generation of Road Concessions",305 a document that guides the structuring of projects and allocation of risks, as stated by ANI's witness Mr. Álvaro Mauricio Duran.306
393. While ANI considers that the presence of springs falls within the scope of Environmental Management, in CONPES the risks due to environmental obligations are grouped into three categories: (i) the management of regulatory permits, which should be the responsibility of the concessionaire; (ii) the costs of socio-environmental offsets, which should be shared under the same mechanism to cover cost overruns in land acquisition; and (iii) unforeseen works required by environmental authorities, subsequent to the issuance of the license and for reasons not attributable to the concessionaire, that are assigned to ANI.307
394. Thus, according to the CONPES and the Agreement, the environmental risks of the Concessionaire do not include the risk of an eventual discovery of springs.
395. The risks assumed by POB under Section 13.2 of the Agreement include, under item ix):
Except for the coverage expressly provided for by ANI in this Agreement, the favorable or unfavorable effects derived from the Social and Environmental Management, since it is the Concessionaire's obligation to carry out the Social and
305 Exhibit CL-078(a), p. 43 ↩
306 Statement by Mr. Alvaro Mauricio Duran Leal, 01:27:38: “We structuralists are not free to tell the risks where they should be. That is what the CONPES document says, in the case of the fourth generation there were even two versions of the CONPES document, taking into account all the discussions with the market, a first version and then a correction to say how the risks should be assigned." ↩
307 Exhibit CL-078(a), p. 51. ↩
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Environmental Management and to comply with the regulations in force that govern the matter.
396. In accordance with this clause, the unfavorable effects derived from the Environmental Management must be assumed by POB to the extent that they arise from the risks it had assumed. On the contrary, the Concessionaire should not assume the unfavorable effects of the Environmental Management risks that are outside its obligations.
397. When ANI signed the EER Minutes, it acknowledged that the presence of the springs is not an event derived from the risks assumed by POB. In fact, from the account used by ANI itself, it is clear that ANI perceives the situation as outside POB's responsibility.308
398. Finally, the Arbitral Tribunal is not convinced by the position put forward by ANI's witness, Mr. Álvaro Mauricio Durán. Mr. Durán has asserted that the problem in this case is related to the design or the cost of construction of UFs 4 and 5, which are the responsibility of POB.309 The question about the costs associated with design or construction could have been raised in the event that ANI had agreed to modify the route of UFs 4 and 5 by moving it to the other side of the mountain, as suggested by POB.310 However, this problem did not arise in reality, leaving the discussion to whether or not the Project could be carried out under its original conditions. This means that the risk of an increase in the costs of the
308 Exhibit C-003: "In fact, from the initial report of water points reported by the community, a total of 23 were listed to be analyzed. However, after an arduous review and verification process, the consultant hired by the Concessionaire SIAM S.A.S. confirmed through a study submitted to ANI in April 2018 the existence of 60 springs, which included the six springs that had been previously identified by the Pontificia Universidad Javeriana, for a total of 66 springs along Functional Units 4 and 5 of the Project. This generated by the Entity the recognition of an - Exemption of Liability Event as of 1 August 2018, which suspended for the Concessionaire the obligation to perform the Interventions established in the Concession Agreement and its Appendices, in relation to the so-called Functional Units 4 and 5, until a series of activities were carried out". ↩
309 Witness Statement of Mr. Alvaro Mauricio Duran Leal, 00:41:42-00:49:05; 01:14:49. ↩
310 Exhibit C-049. ↩
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Project due to design and construction modifications —the risk assumed by the Concessionaire— was not verified.
399. For the reasons stated above, the Tribunal concludes that the risk and the responsibility for the presence of the springs were not assigned by ANI to POB under the Agreement.
400. Fifth, the Tribunal analyses whether the occurrence of the EER in UFs 4 and 5 makes the Project unfeasible.
401. Although CONPES 3760 311 for "Road Projects under the Public-Private Partnership Scheme: Fourth Generation of Road Concessions” is not part of the Agreement documents, it is useful for analyzing the concept of the EER, since its guidelines were set out in the Agreement and they provide greater detail about how an EER is conceived.
402. In CONPES it is first pointed out that:312
[E]vents of force majeure or fortuitous events are risks that may materialize in the development of projects, therefore contracts must provide formulas or mechanisms for their administration in the event that factors exogenous to the project occur.
403. Immediately afterwards, it was established that:313
[I]n order to maintain the performance rate of the contracts, it is necessary to consider contractual tools for the declaration of exemption of liability events for situations of force majeure or fortuitous events arising from environmental, social, real estate and public utilities network transfer events, among others, which will be assumed by ANI, after performing a verification process and certifying the due diligence of the private party on behalf of the supervisor or whoever acts in its place.
311 Exhibit CL-078(a), p. 43. ↩
312 Exhibit CL-078(a), p. 43. ↩
313 Exhibit CL-078(a), p. 43. ↩
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404. From the above it follows that extraordinary events “will be assumed by ANI”, that is, the concessionaire is not responsible for their occurrence and effects.
405. In this context, it is of interest whether the possible unfeasibility of the Project, because of the presence of the springs, can be an EER that will be assumed by ANI.
406. ANI's witness Mr. Álvaro Duran, who was directly involved in the drafting of the fourth generation contracts such as the Concession Agreement of the present case testified:314
The concept of unfeasibility is not strictly speaking a risk. I have said, and I repeat, that there is a lot of confusion, that a risk is exclusively the variation of income or the variation of costs to obtain a certain result. That is the only thing that constitutes a risk.
Unfeasibility sounds like an Exemption of Liability Event. This was a concept that was included in the Agreement, which is identical to that of force majeure but a little more extended, because the definition of force majeure in Colombian Law, which is an old definition of Law 153 of 1887, is a definition, in my opinion, imprecise, it is an antitechnical definition, as venerable as it may be given the many centuries that have passed without it being changed. And that is why, in my opinion, the Agreement must have a more technical definition, which is that of the Exemption of Liability Event.
But the logic behind it is the same as force majeure, it is the traditional one of the law of obligations, according to which, if there is an impossibility for the debtor to perform the obligation, it cannot be liable for that. This has nothing to do with risks up to that point, it simply releases them from the performance of the obligation, because there have been no further costs. There are no further costs.
What the Agreement has are concrete solutions to a situation like that. But I must reiterate, I do not recall any case where this concept of unfeasibility can be applied. Theoretically there may be, but I do not recall any case, because almost always in 99.9% of the situations there are solutions: it is only a question of money, that is, they are worth more or less. It is not that they cannot be done. Roads have always been made and will continue
314 Witness Statement of Mr. Alvaro Mauricio Duran Leal, 01:27:41. ↩
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to be made; and environmental problems are everywhere. The engineering solution is usually the answer, but it may cost more, that is where the risk, the concept of risk, applies.
407. Paraphrasing the witness, the risk of unfeasibility does not exist, because engineering solutions can always be found or the costs of project performance can always be increased. However, in this specific case, it was not possible to develop the engineering solutions to address the problem of the presence of the springs without altering the object of the Agreement. This being so, the performance of UFs 4 and 5 remained unfeasible, but not only due to an EER.
408. Rather, the performance of UFs 4 and 5 was unfeasible due to ANI's failure to comply with its contractual and/or legal obligation to structure and guarantee a feasible Project.
409. For the reasons expressed in this Section, the Arbitral Tribunal concludes that (i) ANI had the contractual and legal obligation to structure and guarantee the feasibility of the Project, which included, in this case, the obligation to detect the existence of springs affecting the Project's area; and (ii) that ANI breached such obligation of structuring and planning the Project, by failing to timely detect the existence of the springs.
410. Section 14.2(d)(vi) of the Agreement requires the Parties to seek “solutions aimed at restoring the Affected Party's performance as soon as possible.” In this line, in the EER Minutes, the Parties agreed to prepare and present to the Authorities,
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standard mitigation measures and works at the water points identified for UFs 4 and 5 (the “Mitigation Measures").315
411. As part of Activity 1, the Concessionaire was required to prepare and submit such Mitigation Measures within 45 days of signing the EER Minutes. The total duration of Activity 1 was 3 months. The parties responsible for this activity were "Concessionaire – ANI – Supervisor".316
412. Under the EER Minutes, if the Environmental Authorities accepted the Mitigation Measures, the Parties had to consider:317
[T]he possibility and/or feasibility of signing a contractual document in which the Parties in good faith will review, among other things, the activities and conditions required to resume the performance of the contractually planned Interventions, studying the impacts that may arise.
413. In the event that the Environmental Authorities rejected the proposed measures, the Parties agreed to carry out Activity 2, namely:318
[The] parties and the Supervisor shall meet and decide on the possibility and/or feasibility of executing a contractual document in which the Parties in good faith shall review, among other things, the activities and conditions required to perform interventions of Functional Units 4 and 5 considering the impossibility of performing the contractually foreseen interventions.
414. The Parties responsible for this activity were the Concessionaire and ANI, with the support of the Supervisor, and said activity should have lasted 2 months, extendable for up to 2 more times, that is, up to a maximum of 6 months. In the event "that an agreement was not reached within the period stipulated herein, the procedure indicated in the Agreement will be followed".319
315 POB and S&B Statement of Claim, ¶ 227.i. ↩
316 POB and S&B Statement of Claim, ¶ 227.i. ↩
317 POB and S&B Statement of Claim, ¶ 227.ii.a. ↩
318 POB and S&B Statement of Claim, ¶ 227.ii.b. ↩
319 POB and S&B Statement of Claim, ¶ 227.iii, Exhibit C-002. ↩
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415. The Claimants point out that, on 21 August 2018, a meeting was held between POB, ANI, the Supervisor and the Environmental Authorities, where the latter indicated that they would not authorize the development of any activity in the springs' riparian buffer zone.320
416. Likewise, POB submitted the Mitigation Measures to the Environmental Authorities on 13 September 2018, under the terms of the EER Minutes.321
417. Corporinoquía responded on 21 September 2018, reiterating that it would not allow activities within 100 meters of the 12 springs that were within its jurisdiction and for which Mitigation Measures were proposed.322
418. On 13 November 2018, the CAR, which is responsible for 12 other springs for which Mitigation Measures were proposed, responded that these were not associated with "any of the 91 proceedings to be carried out before the Corporation", and therefore it could not issue a statement.323
419. In the Claimants' view, Activity 1 had been completed on the dates on which Corporinoquía and CAR, respectively, stated that they did not approve the proposed Mitigation Measures.324
420. The Claimants assert that on 21 November 2018, following CAR's negative response to the Mitigation Measures, POB requested that ANI begin Activity 2,325 reiterating the request on several occasions.326
320 POB and S&B Statement of Claim, ¶ 252. ↩
321 POB and S&B Statement of Claim, ¶ 253, Exhibit CL-110 and Exhibit CL-111. ↩
322 POB and S&B Statement of Claim, ¶ 254.i; Exhibit C-025 (document dated April 9, 2018); Exhibit C-024 (document dated 8 October 2018 and 31 October 2018). ↩
323 POB and S&B Statement of Claim, ¶ 254.ii; Exhibit C-112. ↩
324 POB and S&B Statement of Claim, ¶ 255. ↩
325 POB and S&B Statement of Claim, ¶ 259; Exhibit C-029. ↩
326 POB and S&B Statement of Claim, ¶ 261; Exhibit C-030; ¶ 263, Exhibit C-031 ↩
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421. The Claimants argue that negotiations began in mid-January 2019 and lasted until October of the same year, addressing possible solutions from a technical, legal and budgetary point of view.327
422. The purpose of the Studies and Designs Amendment under discussion was the engineering studies and designs of a new route for UFs 4 and 5, including complementary studies and an EIA.328
423. On 10 October 2019, ANI reportedly asked POB to send the agreed text,329 which was done by POB on 11 October 2019.330
424. However, in the view of the Claimants, ANI “repudiated” the terms of the EER Minutes and the Agreement since:331
(1) it failed to fully implement the actions provided for in Activity 2 of the EER Minutes and ANI stated that it would not comply with them; and (ii) it engaged in conduct that directly contravenes the EER Minutes and the Agreement.
425. The Claimants point out that ANI had informed that the draft of the Amendment was going to be submitted to the “Internal Divisions of the Entity and ultimately, the Contracting Committee will recommend whether or not to sign the contract”. It also indicated that the document “could be modified or objected to".332
426. The Claimants allege that, in the Answer to the Notice of Arbitration and the Counterclaim Notice, in January 2021, the Respondent stated that it continued its studies to determine the feasibility of the Amendment, that the Amendment alone did not guarantee overcoming the EER or the performance of the Project, given
327 POB and S&B Statement of Claim, ¶¶ 265-267. ↩
328 POB and S&B Statement of Claim, ¶ 268; Exhibit C-119. ↩
329 POB and S&B Statement of Claim, ¶ 272; Exhibit C-050. ↩
330 POB and S&B Statement of Claim, ¶ 274; Exhibit C-118. ↩
331 POB and S&B Statement of Claim, ¶ 276. ↩
332 POB and S&B Statement of Claim, ¶ 280; Exhibit C-050. ↩
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that it still "does not guarantee that, effectively, in the suggested route, there are no springs or water sources".333
427. The Claimants refer to the information provided by the Comptroller's Office, according to which, within the framework of “Compromiso Colombia”, only two informative meetings had been conducted on the subject, without any agreement between the parties involved.334 They infer from the foregoing that ANI had failed to act in accordance with Activity 2 and thus repudiated the terms of the EER Minutes and the Agreement.335 In turn, the Claimants criticize the lack of efforts on ANI’s behalf to achieve a shift in the opinion of the different environmental authorities, pointing out that ANI has no contractual basis to try to create parallel instances to those agreed upon by the Parties to overcome the EER.336
428. ANI recognizes that there are negative decisions from the Environmental Authorities due to the special protection of water sources, but argues that there is no express decision rejecting the Mitigation Measures presented and, much less, that there is any reference to a legal prohibition for the completion of the Project in UFs 4 and 5. Thus, for ANI, “ALL the mitigation possibilities of the environmental impact and the eventual performance of the original route of the road have not yet been exhausted in good faith" [capitalization in original].337
429. It affirms that, in view of the decisions of the environmental authorities “suitable mitigation measures” [underline in the original] have not been presented by POB, although they were again required by the interinstitutional working group dated
333 POB and S&B Statement of Claim, ¶¶ 282, 299. ↩
334 POB and S&B Statement of Claim, ¶ 288. ↩
335 POB and S&B Statement of Claim, ¶ 289. ↩
336 POB and S&B Statement of Claim, ¶¶ 294-325. ↩
337 ANI Statement of Defense, ¶ 88. Also ¶ 69, Exhibits 8.1.1.1 and 8.1.1.2 ↩
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16 June 2021, held between the Procuraduría's Office, Environmental and Governmental Authorities.338
430. ANI alleges that on 25 August 2021, a technical meeting was held with the Concessionaire and Corporinoquía Yopal headquarters during which an analysis of the technical studies requested by the Corporation regarding the 58 water sources within its jurisdiction was presented.339 It points out that there is no evidence of a final decision by the CAR regarding the rejection of all the mitigation measures proposed by the Concessionaire, because they are not complete and precise.340
431. ANI denies that Activity 1 was exhausted, because it is the Concessionaire who must:341
[P]ropose sufficient and necessary mitigation measures for the springs located in Functional Units 4 and 5, which also meet the approval parameters of the environmental authorities, the Supervisor and ANI.
432. It also points out that POB has refused to actively participate in presenting measures to obtain the permits from the Environmental Authorities. However, ANI has continued in inter-institutional working groups, with the Environmental Authorities to ensure that the Project can be carried out along the original route.342
433. According to ANI, POB “abandoned” Activity 1 and focused on requesting the execution of the Amendment that modifies the scope of the project."343
434. The Respondent argues that the modification of the scope of the Project through the execution of an Amendment is inadmissible, because:344
338 ANI Statement of Defense, ¶ 89, Exhibit 8.1.23. ↩
339 ANI Statement of Defense, ¶ 91. ↩
340 ANI Statement of Defense, ¶ 92. ↩
341 Statement of Defense, ¶¶ 163; 347. ↩
342 ANI Statement of Defense, ¶ 165. Also ¶¶ 95; 195-198; 340-349; 674-679. ↩
343 ANI Statement of Defense, ¶ 219; ¶ 339; ¶ 675-676. ↩
344 ANI Statement of Defense, ¶ 95; ¶ 340-349. ↩
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i) the modification of the design and scope of the project is not suitable to overcome the EER; ii) the execution of the Amendment must be the result of the parties' agreement and not the imposition of POB; iii) the execution of the Amendment intended by POB does not guarantee that the problem of the water sources will not arise again and proof of this is that in the draft proposed by POB there is a requirement to carry out special water studies, which imply the existence of a high uncertainty as to the feasibility of the change of route; iv) and the execution of an Amendment that modifies or seriously affects the scope of UF 4 and 5 would affect the scope initially agreed by the parties as to its origin – destination and the project specifications that justified its development, which would not be feasible from a legal standpoint since it would ignore the cause of the legal business and it would alter the purpose of the Agreement by distorting the project.
435. ANI emphasizes that the POB's proposal to ANI, issued in October 2019:345
[Does] not guarantee in any way the feasibility of the Project, since, it is necessary to make a previous and deep analysis in the environmental, technical, financial, real estate matters, among others, but also, taking into account the existence of the risk of finding springs once again in the alternative proposals submitted by POB, as happened with the current layout of the project.
436. ANI points out that the amendments of the State Contracts must follow strict rules of mandatory observance. It points out that the Amendment proposal formulated by the Concessionaire contains the analysis of three different corridors, which must still be evaluated in light of the technical, environmental, financial and other components to define the feasible corridor.346
345 ANI Statement of Defense, ¶ 208-210. ↩
346 ANI Statement of Defense, ¶ 682. ↩
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437. It states that, even though ANI began studying this proposal, this does not or did not imply:347
[T]he obligation of this entity to execute the proposed Amendment, since, among other things, such alternatives do not establish a final solution [...] because there is no guarantee that in the suggested routes there are no springs or water sources that would lead to the current project status once again.
438. ANI has reiterated these arguments in its Counterclaim.348
439. In the EER Minutes, the Parties state that, “considering the special features" of such event, they agree to establish the “Special Period" in the terms of Section 14.2.d.i of the Agreement. It follows, in accordance with Section 14.2.d.v, that POB, as the "Affected Party” was exempted from the performance of the affected obligations during the Special Period.
440. In the second paragraph of the EER Minutes, the Parties established that, with minimal exceptions:349
As a consequence of the occurrence and declaration of this Exemption of Liability Event, the Parties agree to SUSPEND the term for the performance of all works and activities associated with the Interventions corresponding to Functional Units 4 and 5 of the Project (including the Choachí variant) from 31 October 2017.
441. In line with the provisions of Section 14.2.d.vi of the Agreement, the Parties considered two Activities:
347 ANI Statement of Defense, ¶ 684. ↩
348 Statement of Counterclaim, ¶¶ 91-148; pp. 291-296. ↩
349 Exhibit C-002. ↩
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[At] the request of either Party, the Parties shall meet to seek, in good faith, solutions aimed at resuming the performance of the obligations of the Affected Party as soon as possible.
442. The Arbitral Tribunal pays special attention to the content of the obligations, deadlines and procedures that the Parties agreed upon in the EER Minutes to carry out such Activities. For Activity 1, a period of 3 months was considered as the estimated date for its completion. For Activity 2, a period of 2 months was considered, renewable up to 2 more times for a total of 6 months.
443. In the introduction to these Activities, the Parties noted that the Special Period would end "once these Activities are completed.” In turn, when defining the term for Activity 2, they established that: “If no agreement is reached within the period fixed herein, the procedure indicated in the Agreement will be followed."
444. The Claimants set forth their claims regarding the Respondent's alleged breach of the EER Minutes, within the breaches and reasons preventing it from completing the Construction Phase of UFs 4 and 5.
445. For its part, ANI alleges that Activity 1 is still under development, which it seeks to demonstrate with the existence of the working groups held with the participation of various public entities.
446. Through the EER Minutes, the Parties regulated the effects of the findings of the springs, and the procedures and deadlines established for Activities 1 and 2, i.e., (i) the Concessionaire had to prepare and submit Mitigation Measures for the approval or rejection of the corresponding authorities; (ii) within a total term of 3 months for their submission and approval or rejection.
447. From the description of the facts made by both Parties, and from the evidence submitted, it is established that the Parties made a genuine attempt to comply with Activity 1, in which the Mitigation Measures were devised and submitted to the competent Environmental Authorities. Such attempt did not lead to any favorable
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result to overcome the EER, since the Mitigation Measures proposed by POB were rejected by the Environmental Authorities. Furthermore, all the responses received from CAR and Corporanquía were categorical in denying the possibility of granting the permits, while reiterating the obligation to respect the reserved areas.350 Likewise, ANLA was unwilling to issue a permit to carry out the works in the reserved area.351
448. Furthermore, the Arbitral Tribunal takes into consideration that in the EER Minutes, the Parties estimated that the period to conduct Activity 1 was approximately 3 months, counted from the date of execution of the EER Minutes. In other words, the Parties estimated the completion of such activity at the end of October 2018.
449. Faced with this decision of the Parties, to consider that Activity 1 continues under development, (i) despite the rejection of the Mitigation Measures by the competent environmental authorities through the working groups of various public entities, and (ii) at least 3 years later, is not in accordance with the agreement reached by the Parties. In light of the EER Minutes, Activity 1 cannot have an uncertain or infinite duration.
450. Thus, the Arbitral Tribunal concludes that Activity 1 was exhausted on 13 November 2018, with the rejection of both Corporations and with the 3 months considered for such activity having elapsed.
451. Once Activity 1 was exhausted, it can be concluded that the Parties were moving towards Activity 2. As stated by the Claimants' witness Mr. Luis Ernesto Pérez, the Parties sat down to negotiate and that negotiation took 10 months.352
452. According to the description provided by witness Pérez, Activity 2 consisted of evaluating the possibility of a radical change in the route, moving it to the other side
350 Exhibit CER-003, pp. 11-12. ↩
351 Witness statement of Mr. Luis Ernesto Pérez, 00:26:35-00:27:47. ↩
352 Witness statement of Mr. Luis Ernesto Pérez, 00:30:09. ↩
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of the mountain, where the composition of the mountain was much rockier, for which the firm Ingetec was hired and determined that this was feasible.353
453. However, on 8 October 2019, Mr. Doron Sportas of S&B sent an email to ANI, stating: “We are still waiting to receive a final version from ANI in order to continue with the execution of this important amendment”.354 On 10 October 2019, ANI responded to this email stating that:
[T]he Concessionaire must submit to the Entity the formal request containing the draft document that overcomes the EER of UF 4 and 5; said documents have been discussed in different working groups, the last one being on 18 September (see attachments). It should be noted that after such request, the opinion of the Intervías 4G Consortium and the internal divisions of the Entity will be required, and finally the Contracting Committee will recommend whether or not to execute the contract, so the draft may be modified or objected to during this procedure.
454. The Arbitral Tribunal’s conclusions are as follows: First, as developed above, in the month of January 2019, the Parties advanced towards the performance of Activity 2. Second, to initiate Activity 2, Activity 1 should have been exhausted. Third, the above-mentioned email lists several conditions for the execution of the proposed Amendment to become a reality, that is, the favorable opinion of the Supervisor, the evaluations of several internal divisions and the Contracting Committee’s favorable recommendation, while making it clear that the latter could recommend against the execution of the Amendment.
455. In turn, according to the EER Minutes, Activity 2 includes having to:
[D]etermine the possibility and/or feasibility of executing a contractual document in which the Parties in good faith will review, among other things, the activities and conditions for the development of the interventions in Functional Units 4 and 5 in light
353 Witness statement of Mr. Luis Ernesto Pérez, 00:10:11; Exhibit C-049. ↩
354 Exhibit C-050. ↩
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of the impossibility to perform the contractually foreseen interventions.
456. As can be seen from the literal wording of the above provision, the first determination to be made by the Parties is the possibility and/or feasibility of executing an agreement. In this context, the possibility or feasibility of entering into the Amendment also includes that it may be considered impossible or unfeasible. In other words, there is no guarantee for POB that such an agreement or Amendment will be signed by the Parties. Likewise, there is no objective obligation on ANI to execute such an agreement or Amendment, but rather its obligation is to negotiate and analyze in good faith the possibility and/or feasibility of entering into such contractual document.
457. If the possibility or feasibility of signing such amendment is confirmed, the Parties shall review -in good faith- the contractual terms, in order to perform UFs 4 and 5.
458. In other words, when executing the EER Minutes, the Parties were not yet fully aware that the performance of UFs 4 and 5, in their original conception, would not be possible. In turn, ANI itself asserts that the performance of UFs 4 and 5, as of today, is not possible and even states that the changes in the layout do not guarantee that it would be possible to develop, given that the new layout may also be affected by the presence of other springs.
459. Finally, Activity 2 also has a time limit, namely, up to 6 months, although the Parties extended it up to 10 months, reaching October 2019. Furthermore, if the Arbitral Tribunal were to assume that Activity 2 was initiated only upon submission of the draft Amendment dated 11 October 2019, it should have been concluded no later than 11 April 2020.
460. In this regard, the Arbitral Tribunal considers that, based on the above, POB diligently complied with its obligations to overcome the EER regarding UFs 4 and 5, to the extent that (i) it submitted the required Mitigation Measures to the corresponding Environmental Authorities; and (ii) it conducted negotiations in good faith with ANI for purposes of determining the feasibility or possibility of
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entering into an Agreement’s modification and it proposed amendments to the Agreement in this regard. Therefore, the Arbitral Tribunal rejects ANI’s allegations that POB did not adequately comply with its obligations to overcome the EER in relation to UFs 4 and 5.
461. On the other hand, although the Claimants accuse ANI of a change of position that occurred after formally submitting the Amendment proposal,355 the Arbitral Tribunal considers that neither the Agreement nor the EER Minutes establish an obligation for ANI to execute an Amendment, this being a possible, but not mandatory, outcome.
462. Thus, from the literal wording of the EER Minutes’ description, it is clear that ANI’s obligation was to “determine and review”, but not to “execute” the Amendment, which in the end never happened.
463. However, this Tribunal considers that ANI did have an obligation to:
[D]etermine the possibility and/or feasibility of executing a contractual document in which the Parties in good faith will review, among other things, the activities and conditions for the development of the interventions in Functional Units 4 and 5 in light of the impossibility to perform the contractually foreseen interventions.
464. In this regard, this Arbitral Tribunal considers that ANI should have acted in good faith, both in determining the possibility or feasibility of entering into a contractual document and in reviewing the activities and conditions to perform the Interventions in UFs 4 and 5.
355 Witness statement of Mr. Luis Ernesto Pérez, 00:30:09: “We filed it formally, accompanied by a letter and from that filing comes a silence of around six to eight months where ANI, practically - I don't know if it was due to a change of government or a change of something, I don't know what may have happened within ANI, but I know it was silent for eight months and after eight months, what the company, the Concessionaire, received as a response to a series of communications that were sent asking: What happened with the amendment? What happened with the amendment? was a request from the Ombudsman's Office asking it to attend a series of meetings they wanted to have regarding this issue. So, there was a change of position, but this change of position was not immediate, it was almost a year and a half later, a year and a half in which both we and the financiers of the Project, resorting to the principle of good faith, always believed that the amendment was going to be signed”. ↩
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465. The Arbitral Tribunal finds that ANI did not comply with this obligation to act in good faith. This breach will be explained in detail in Section IV.D.2 of this Award, which examines the Respondent’s subsidiary claim for Early Termination of the Concession Agreement under clause 14.1(e) of the Agreement.
466. POB claims the loss derived from increased funding to the Supervisor Subaccount. This claim is based on the Claimants’ allegation that ANI breached the Agreement by failing to take the appropriate actions to reduce the amounts of the funds corresponding to the Supervisor Subaccount.356
467. The Claimants argue, based on Exhibit CER-001, and on the Damages Expert Report prepared by FTI, that the Agreement foresees that the funding for this sub-account is almost 3 times higher during the Construction Phase than during the O&M Stage. This can be explained by the fact that the work of the Supervisor is greater when the activities related to the works of the Project are being performed.357
468. POB points out that, due to the occurrence of the EER, no Supervisor work is being carried out in two of the most significant UFs of the Project (UFs 4 and 5) in terms of Capex and Opex. The Claimants allege that, despite this, ANI has refused to enter into a contractual agreement to reduce the funding for this sub-account, despite multiple requests from POB.358
469. POB adds that ANI recognized that it is not economically reasonable for POB to be obliged to fund the Supervisor Subaccount
356 POB and S&B Statement of Claim, ¶ 469. ↩
357 POB and S&B Statement of Claim, ¶ 469(i). ↩
358 POB and S&B Statement of Claim, ¶ 469(i) and (ii). ↩
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according to the amounts foreseen for the Construction Phase given the state of the Project. This is because this contractual modification was part of the Studies and Designs Amendment that the Parties negotiated, but that ANI refused to sign.359
470. The Claimants argue that the refusal to reduce the funding of this account entails a breach of ANI’s obligation to take reasonable measures to avoid the extension of the effects of the EER.360
471. POB points out that, from the documents produced by ANI in the Arbitration, it can be confirmed that POB has complied with its funding obligations of the Supervisor Subaccount.
472. Indeed, the Claimants assert that the work performed by the Supervisor since August 2018 is proportionally lower than what would have been conducted if the EER had not suspended the performance of the Interventions in UFs 4 and 5. According to the Claimants, this entails ANI’s obligation to reduce both the amount of the Supervisor’s remuneration and the amount of funding of the Supervisor Subaccount, as of that date361.
473. Furthermore, POB points out that Amendments 1 to 5 to the Supervisor’s Contract incorporated a substantial reduction in the retribution of the Supervisor, as a consequence of the construction circumstances of the Project, and, expressly, in relation to the fact that the Operation and Interventions stage was suspended in UFs 4 and 5.362
474. The Claimants add that even for the execution of these Amendments and the decision to reduce the value of the Supervisor’s Contract, ANI expressed that
359 POB and S&B Statement of Claim, ¶ 469(ii). ↩
360 POB and S&B Statement of Claim, ¶ 469(iii). ↩
361 POB and S&B Reply, ¶¶ 127-128. ↩
362 POB and S&B Reply, ¶¶ 129-130. ↩
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the execution of the Supervisor’s Contract would leave a surplus in the Supervisor Subaccount. This would imply that ANI had obtained unjustified benefits, forcing POB to make payments that would not be used to pay for the Supervisor.363
475. The Respondent rejects the claims that ANI failed to comply with its obligations to reduce the funding amounts, since ANI was not obliged to reduce the amounts in the Supervisor Subaccount.364
476. ANI explains that, in an Agreement such as the one at issue in this Arbitration, which is a Public-Private Partnership, the basis is the Concessionaire’s financial capacity. It adds that, in relation to funding, this is determined from the structuring of the Project’s financial model, so it cannot be adjusted subsequently.365
477. The Respondent explains that pursuant to the Agreement, POB’s obligation was established to constitute an autonomous trust fund to be administered by POB, by means of the execution of a commercial trust agreement. Thus, in accordance with Sections 3.13 and 3.14 of the Agreement, this obligation was established on POB, as well as the accounts that made up the trust fund, amongst which is the Supervisor Subaccount. Likewise, POB’s obligation to fund the different accounts in accordance with the terms established in Section 4.5(e) of the Agreement was also established. Thus, the Respondent concludes that the Claimants failed to comply with their obligations to fund this sub-account, and claims default interest for their lack of payment.366
363 POB and S&B Reply, ¶¶ 131-133. ↩
364 ANI Statement of Defense, ¶ 421. ↩
365 ANI Statement of Defense, ¶¶ 422-424. ↩
366 ANI Statement of Defense, ¶¶ 807-816. For more details on the Respondent’s position, see the Section on the counterclaim for funding Section IV.C.3 of the Award. ↩
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478. The Respondent rejects POB’s interpretations of the documents produced by ANI regarding the consequences of the reduction in the amounts of retribution of the Supervisor’s Contract367. The Respondent points out that the retribution’s reduction in the Contract would not entail ANI’s obligation to reduce the funding amounts for the Supervisor Subaccount.368
479. Furthermore, the Respondent denies that it determined that the Supervisory Contract would leave a surplus in the Supervisor Subaccount. On the contrary, it points out that with the suitability study carried out to sign Amendments 3, 4 and 5 of the Supervisor’s Contract, a favorable opinion was issued for the proposed addition made by the Supervisor, considering that said addition was within the amendment quota allowed by law and that it had sufficient resources to undertake said addition.369
480. Likewise, ANI denies that it obtained or sought to obtain an unjustified benefit, nor that these amounts were used for purposes other than the payment to the Supervisor.370
481. As a preliminary matter, the Arbitral Tribunal notes that the specific claim for the funding of the Supervisor Subaccount is directly related to ANI’s counterclaim for damages corresponding to interest on POB’s default due to its failure to comply with its funding obligations 5, 6, 7 and 8 of the Supervisor Subaccount.371 In this sense, this Section’s discussion on the funding amounts of the Supervision Subaccount also applies to the analysis of the corresponding counterclaim, and is decided in Section IV.C.3 of this Award.
367 ANI Rejoinder, ¶ 85. ↩
368 ANI Rejoinder, ¶¶ 91-93. ↩
369 ANI Rejoinder, ¶ 94. ↩
370 ANI Rejoinder, ¶¶ 95-96. ↩
371 ANI Statement of Claim, p. 26-171; ANI Reply on the Counterclaim, ¶¶ 171-175. ↩
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482. POB claims that ANI breached the Agreement by failing to take the appropriate actions to reduce the amount of the funds corresponding to the Supervisor Subaccount, and in short, to avoid the extension of the effects of the EER372. POB claims the loss derived from higher funding of the Supervisor Subaccount for a total of COP $119,500,000,000.373
483. For its part, the Respondent opposes the claims that ANI failed to comply with its obligations to reduce the funding amounts, since ANI was not obliged to reduce the amounts in the Supervisor Subaccount.374
484. On this claim, on the one hand, the Arbitral Tribunal agrees with the Respondent that the Concession Agreement does not contain an obligation on ANI that specifically provides for the reduction of the funding amounts of each of the Subaccounts of the Trust Fund [Patrimonio Autónomo], in a given case.
485. However, the Tribunal also agrees with the Claimants that the Supervisor Subaccount must be funded by the Concessionaire in the terms set forth in Section 4.5 (e) of the Special Part of the Agreement, according to the initiation of each contractual phase: (i) Preconstruction; (ii) Construction and; (iii) Operation and Maintenance.
486. The division of the funding amounts in stages recognizes the economic reality of the Agreement that the Construction Phase requires a greater load of activities by the Concessionaire, which, in turn, requires greater Supervision tasks.
487. In this sense, and according to both Parties, the value of the funding of the Supervisor Subaccount is as follows:375
372 POB and S&B Statement of Claim, ¶ 469. ↩
373 Claimants’ Post-Hearing Memorial, ¶ 348(iii). ↩
374 ANI Statement of Defense, ¶ 421. ↩
375 Written Statement of Undisputed Facts, ¶ 32. ↩
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(i) During the Preconstruction Phase, the funding value is equivalent to COP $2,923,117,956 Reference Month Pesos per year;
(ii) During the Construction Phase, the funding value is equivalent to COP $10,160,367,351 Reference Month Pesos per year —that is, between 3 and 4 times more than the value of the Preconstruction Phase; and
(iii) During the O&M Phase, the funding value is equivalent to COP $3,446,637,624 Reference Month Pesos per year, that is, approximately 3 times less than the value of the Construction Phase.
488. On the other hand, the Supervisor Contract, entered into between ANI and the Supervisor, is directly related to, and was entered into pursuant to, the Concession Agreement. In fact, as regards its scope of application, it is stated that the Supervisor Contract and, in general, “the exercise of the control and monitoring activities must be in full compliance with the corresponding Concession Agreement”.376
489. It also adds that:377
In the event of any difference or contradiction in the application of the provisions contained in the Concession Agreement, the Supervisor Contract and its annexes and this methodology, the provisions of the Concession Agreement and all the documents that add to, modify, complement or interpret said agreement shall prevail; if the differences or contradictions persist, the provisions contained in the Supervisor Contract and its annexes shall prevail.
490. In this sense, the Supervisor Contract and its subject matter are inextricably linked to the Concession Agreement and the Project. On the one hand, inasmuch as the amount of the funds for each stage is directly related to the Supervisory works
376 Exhibit C-212: Supervisor Contract, Annex 4, p. 2, third paragraph. ↩
377 Exhibit C-212: Supervisor Contract, Annex 4, p. 2, fourth paragraph. ↩
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performed. On the other hand, because any modification to the Concession Agreement would affect the Supervisor Contract, and in case of differences, the former prevailed.
491. In line with the foregoing, and also according to both Parties, the value of the Contract entered into between ANI and the Supervisor is equivalent to COP $229,582,850 per month during the Preconstruction Phase, COP $525,960,917 per month during the Construction Phase, and COP $308,109,147 per month during the O&M Phase.378
492. However, and according to both Parties, as of August 2020, ANI modified the value of the Supervisor Contract during the Construction Phase to COP $455,190,117 per month.379
493. In fact, in the suitability and opportunity studies for the execution of the amendments to the Supervisor Contract, on which ANI based its decision to reduce the monthly amounts of the Construction Phase of the Supervisor Contract, it is expressly stated that this was due to “the current monitoring and verification requirements needed for the pending activities of the Preoperational Stage” and as a temporary situation, until “the performance of the activities and constructive interventions in Functional Units 4 and 5” are resumed.380
494. In this sense, the Arbitral Tribunal considers that it is logical and in accordance with good faith that, if the Interventions were paralyzed and the Construction Phase did not begin in UFs 4 and 5, when the monthly amounts of the Supervisor’s fees were reduced for this reason, the funding amounts for the Supervisor Subaccount were also reduced in the same term and proportion.
378 Written Statement of Undisputed Facts, ¶ 33. ↩
379 Written Statement of Undisputed Facts, ¶ 33. See also, Exhibit CER-008, ¶¶ 47-49. ↩
380 Exhibit C-263: ANI suitability study for executing the Amendment No. 1 of the Supervisor Contract, p. 22. See also Exhibit C-264: ANI suitability study for executing the Amendment No. 3 of the Supervisor Contract, p. 20; Exhibit C-265: ANI suitability study for executing the Amendment No. 4 of the Supervisor Contract, p. 18; Exhibit C-266: ANI suitability study for executing the Amendment No. 5 of the Supervisor Contract, p. 20. ↩
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495. This is further reinforced by the fact that the suspension of activities and Interventions in UFs 4 and 5 occurred due to events not attributable to POB but to ANI, as was decided in Section IV.B.2 of this Award.
496. Now, as to the amounts to be deducted, according to the expert evidence submitted by the Claimants, it is concluded that the funding of the Supervisor Subaccount should have been reduced by 63.59%, resulting in an annual funding to the Supervisor Subaccount of the Concession Agreement during the Construction Phase of COP $3,699,578,723.381
497. Thus, and as already stated, POB has indicated that, as a consequence of the failure to proportionally reduce the Supervisor Subaccount of the Agreement, among the damages that POB has suffered with respect to the costs incurred in UFs 4 and 5, there are the additional funds paid amounting to COP $119,500,000,000,382 which must be reimbursed by ANI to POB.
498. ANI claims that POB breached the contractual obligations regarding archaeological matters with respect to UF 2, contained in Paragraph 5.2.2.7 of Technical Appendix 8 and Section 14.2(e) and (f) of the General Part of the Concession Agreement, and the Amiable Compositeur decision No. 15856 of 18 December 2018 “Toll Station/Alcaparros”. ANI argues that POB has not mitigated or made suitable arrangements to overcome the EER and that it has not properly managed the archaeological findings in accordance with the environmental social management required for UF 2.383
381 Exhibit CER-008, ¶ 94. ↩
382 Claimants’ Post-Hearing Memorial, ¶ 348(iii). ↩
383 ANI Statement of Counterclaim, pp. 83, 362. ↩
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499. ANI argues that POB breached its contractual obligations with respect to UF 2, since it has not acted reasonably and diligently, under the extraordinary circumstances in which it finds itself, to mitigate and reduce the effects of the EER affecting UF 2, preventing it from overcoming the EER in the shortest possible time.384
500. First, ANI argues that after declaring the EER, POB has failed to comply with its obligations since it did not carry out the activities aimed at overcoming the Exemption of Liability Event.385
501. In particular, POB allegedly has not incorporated the necessary and sufficient personnel in the archaeological intervention sites;386 POB has not looked after the archaeological intervention sites, to the extent that the covers of the rescue sites have deteriorated;387 and, in addition, the rescued elements have been found in poor condition in the laboratory.388
502. Second, ANI argues that POB has not developed an adequate Preventive Archaeology Program in the Contractual Social Management Plan, because it has not obtained or diligently processed the archaeological intervention authorizations required to continue the works.389 Specifically, POB has allegedly failed to renew the Archaeological Intervention Authorization No. 8559, thus failing to comply with its contractual obligations,390 and therefore unjustifiably delaying the necessary measures to overcome the EER.391
503. Third, ANI argues that, in accordance with these authorizations, POB must carry out the laboratory activities according to the Authorization for
384 ANI Statement of Counterclaim, p. 11. ↩
385 ANI Statement of Counterclaim, p. 361. ↩
386 ANI Statement of Counterclaim, p. 286. ↩
387 ANI Statement of Counterclaim, p. 286. ↩
388 ANI Statement of Counterclaim, p. 286. ↩
389 ANI Statement of Counterclaim, p. 361. ↩
390 ANI Statement of Counterclaim, p. 82. ↩
391 ANI Statement of Counterclaim, p. 286-288. ↩
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Archaeological Intervention No. 6429, without which it is not possible to prepare the final report of the preventive archaeology program, nor to finish the works according to the Concession Agreement.392 ANI states that the contractual obligation, not suspended by the EER, to prepare and submit the final report of the preventive archaeology program has not been complied with.393
504. The Respondent emphasizes that the execution of the Completion Minutes of UF 2 does not imply, per se, compliance with the obligations related to the mitigation and overcoming of the EER, because the circumstances that gave rise to the declaration of the EER have not been remedied, and POB has not completed the removal or recovery of the archaeological material.394
505. POB argues that it has diligently performed all the activities established in the Concession Agreement, in its Technical Appendices 6 and 8, and in the law.395 POB argues that it has fully and timely complied with its archaeological obligations in the findings located in the UF 2 section.396 Likewise, POB affirms that it has strictly complied with the legal guidelines and those indicated by the Colombian Institute of Anthropology and History (ICANH), the highest authority in archaeological matters, guaranteeing the protection of Colombia’s cultural and archaeological heritage.397
506. Furthermore, POB asserts that the non-completion of the removal or recovery of the archaeological material is due only to the magnitude of the findings, not only for their archaeological significance, but for the amount of findings.398 Also, POB argues that the Completion Minutes of UF 2 recognize that POB took all the necessary
392 ANI Statement of Counterclaim, p. 288. ↩
393 ANI Statement of Counterclaim, p. 288. ↩
394 ANI Reply on the Counterclaim, ¶¶ 238, 243-244, 246. ↩
395 POB and S&B Statement of Defense to the Counterclaim, ¶ 562. ↩
396 POB and S&B Statement of Defense to the Counterclaim, ¶ 568. ↩
397 POB and S&B Statement of Defense to the Counterclaim, ¶ 568. ↩
398 POB and S&B Statement of Defense to the Counterclaim, ¶ 566. ↩
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measures to mitigate the effects of the EER, as the design of the affected section of the construction site was successfully completed to such an extent that the interventions in UF 2 were carried out without affecting the archaeological sites and the construction works were completed.399
507. First, POB argues that it directed all reasonably possible and advisable efforts and resources regarding the activities at the archaeological sites, El Divino Niño and Los Alcaparros. POB responded and met the requirements of the Supervisor regarding the number of personnel at the findings, since it had archaeologists and specialists, even in numbers greater than those required by ICANH, and specialized conservation and restoration personnel to carry out the works required in the laboratory.400 POB also reported in a timely manner the restructuring of personnel to ensure compliance with the archaeological obligations as a result of the restrictive measures related to the spread of COVID-19.401 Also, POB addressed the request concerning the damage to the sites’ enclosures, which were caused by the impossibility to access them as a result of the restrictive measures imposed by COVID-19, by initiating the corresponding recovery work, once it was possible,402 thus complying with all its obligations.
508. Second, POB argues that it complied with its obligations in relation to the administration of the findings, since it obtained all the necessary permits.403 POB claims that it processed up to ten permits before the ICANH, obtaining the Authorizations for Archaeological Intervention No. 5048, No. 6429 and No. 8559.404 Likewise, it states that the Authorization for Archaeological Intervention No. 8559
399 POB and S&B Statement of Defense to the Counterclaim, ¶ 683. ↩
400 POB and S&B Statement of Defense to the Counterclaim, ¶ 625. ↩
401 POB and S&B Statement of Defense to the Counterclaim, ¶ 637. ↩
402 POB and S&B Statement of Defense to the Counterclaim, ¶ 638. ↩
403 POB and S&B Statement of Defense to the Counterclaim, ¶ 576. ↩
404 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 587-607. ↩
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was renewed by an extension request on 8 November 2021,405 thus demonstrating POB’s consistent and diligent performance.
509. Third, POB argues that the activities in compliance with archaeological obligations are defined by ICANH guidelines and the law, which it fully complied with.406 ICANH has not claimed a breach of POB’s archaeological obligations, nor has it initiated any sanctioning proceedings against POB,407 thus illustrating that POB complied with its contractual and legal obligations in relation to the findings at the archaeological sites of El Divino Niño and Los Alcaparros.408
510. POB emphasizes that pursuant to Section 14.2 of the Concession Agreement, its obligation was to do everything reasonably advisable and possible to overcome the EER.409 However, POB clarifies that the non-completion of the recovery at Los Alcaparros site as of today does not prove a breach, as the obligation is not time-bound and it is contingent on extraordinary circumstances. Furthermore, POB argues that it has carried out all the necessary activities to overcome the EER.410
511. POB argues that the Completion Minutes of Functional Unit 2 evidence that ANI acknowledged POB’s compliance with its obligations, and that the pending works regarding the archaeological excavations do not constitute any kind of breach.411
512. POB argues that ANI’s assertions are based on facts prior to the declaration of the EER, for both archaeological sites, El Divino Niño and Los Alcaparros, and that therefore, the arguments presented by ANI are subject to res judicata.412 POB
405 POB and S&B Statement of Defense to the Counterclaim, ¶ 609. ↩
406 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 640-641. ↩
407 POB and S&B Statement of Defense to the Counterclaim, ¶ 678. ↩
408 POB and S&B Statement of Defense to the Counterclaim, ¶ 673. ↩
409 POB and S&B Statement of Defense to the Counterclaim, ¶ 578. ↩
410 Statement of Defense to the Counterclaim par. 579. ↩
411 Statement of Defense to the Counterclaim, par. 567. ↩
412 Statement of Defense to the Counterclaim, par. 623, 643, 660, 664, 666-669. ↩
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further states that the Amiable Compositeur assessed POB’s conduct and considered that it had fulfilled its Agreement obligations on Social Management, that it had carried out the recovery of the archaeological findings pursuant to to the instructions given by the ICANH, and that it had submitted the reports in a timely manner. ANI allegedly confirmed this in the Counterclaim Memorial at paragraph 43, stating that the Amiable Compositeur assessed POB’s conduct and considered that it had complied with its contractual obligations in archaeological matters.
513. The Arbitral Tribunal will first clarify the obligational framework to subsequently present its analysis leading to the resolution of the dispute regarding the archaeological obligation of UF 2.
514. First, the Concession Agreement establishes in general terms the framework of the Parties’ obligations. Particularly, in Section 4.2 it establishes the main obligations during the Preconstruction Phase,413 while stating in the first paragraph of said clause that the Technical Appendices provide for other particular obligations.
515. Additionally, Section 8.1(a) states that:
The Social and Environmental Management of each of the Interventions is the responsibility of the Concessionaire, in compliance with the obligations and responsibilities established in Technical Appendix 6 and 8, and the Applicable Law.
516. Technical Appendix 6 in Chapter I, paragraph (a) states that:
In accordance with Section 8.1 of the General Part of the Agreement, the Concessionaire’s obligations in relation to the environmental component of Social and Environmental
413 Reply on the Counterclaim, par. 124. ↩
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Management are defined in this same Appendix; and that which is not provided for in it, is provided for in Technical Appendix 8.
517. Furthermore, the obligations set forth in these Technical Appendices do not exempt the Concessionaire from complying with the Applicable Law. Additionally, Technical Appendix 6 in Chapter I, paragraph (d), subparagraph (iii), states that “the Concessionaire must comply with the guidelines of [...] ICANH— and the applicable law in relation to the National Cultural and Archaeological Heritage”. Therefore, the obligations related to archaeological matters are precisely and specially defined in Technical Appendices 6 and 8.
518. Second, Technical Appendix 8, in paragraph 5.2.2.7, specifically establishes the obligations relating to the Preventive Archaeology Program. In particular, paragraph 5.2.2.7.4.1 requires that:
[T]he Concessionaire must protect the Nation’s Archaeological Heritage, that the Concessionaire has its responsibilities defined by Law, that the Concessionaire must request certifications and permits from the ICANH, that it must have an Archaeological Management Plan before starting the works, and that the Concessionaire must suspend the works and inform both the ICANH and ANI and the Supervisor in case of performing excavations where archaeological elements are found.
519. Likewise, section 5.2.2.7.4.4 establishes the obligations of the:
Concessionaire regarding archaeological findings; providing that (1) it must report such findings to the ICANH, (2) it must establish relevant security and control measures, (3) it must manage the receipt of the archaeological material with the authorized laboratory for the shelter and preservation of the recovered material, (4) it must follow the provisions of the ICANH to protect the archaeological material recovered, and (5) it must submit to the ICANH the corresponding report, cartography and database.
520. In addition, paragraph 5.2.2.7.6 provides that:
[T]he implementation of the activities described in the program, and in particular the effective performance of mitigation measures in compliance with the technical standards and specifications
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applicable to the corresponding infrastructure, is mandatory and failure to do so will result in the imposition of the fines contained in section 6.1(f) of the Special Part.
521. Therefore, POB’s obligations in archaeological matters are generally defined in the Concession Agreement, in the Appendices and in the law, but they are bound by the guidelines and directives of the public entity, ICANH.
522. Third, in light of the declaration of the Exemption of Liability Events in UF 2 (EERs-UF 2),414 the Concession Agreement in Section 14.2 (e) and (f) establishes the obligation of the party affected by the EER declaration to carry out all necessary steps to mitigate its effects and to overcome the EER. Specifically, paragraph (f) states that:
[T]he Party Affected by an Exemption of Liability Event is obligated to take all reasonably advisable and possible steps, under the extraordinary circumstances, to mitigate and reduce the effects of the Exemption of Liability Event, as well as to overcome said event in the shortest possible time.
523. Fourth, article 7 of Law 1185 of 12 March 2008, states that:
[In] road infrastructure construction projects, they shall conduct a preventive archaeology program and an archaeological management plan, which must be submitted to the ICANH and without which the works cannot be conducted.
524. Accordingly, article 55 of Decree 763 of 10 March 2009 establishes first, that “the [...] ICANH– is the only entity empowered by the legal provisions to apply the archaeological heritage administration regime”; and second, that:
The Preventive Archaeology Program is the scientific research aimed at identifying and characterizing the archaeological assets and contexts existing in the area of those projects, works or
414 Amiable Compositeur Decision No. 15854 of 18 December 2018 (ANI Exhibit 8.1.7.1) and Amiable Compositeur Decision No. 15856 of 18 December 2018 (Exhibit ANI 8.1.7.2). ↩
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activities that require environmental licenses, registrations or equivalent authorizations before the environmental authority or that, occupying areas larger than one hectare, require urbanization, subdivision or construction licenses.
The purpose of this program is to evaluate the expected levels of impact on the archaeological heritage due to the construction and operation of the aforementioned works, projects and activities, as well as to design and implement the necessary administration measures for the corresponding Archaeological Management Plan.
525. While Article 57 of the same Decree 763 of 2009, states that:
Interventions in construction projects of hydrocarbon transport networks, mining, dams, road infrastructure, as well as in other projects, works or activities that require environmental licenses, registrations or equivalent authorizations before the environmental authority, or that occupying areas larger than one hectare require a license for urbanization, subdivision or construction.
Prior to initiating the works or activities, the interested party must implement a Preventive Archeology Program that in an initial phase will enable it to present the corresponding Archeological Management Plan. As a condition to start the works, said Plan must be approved by the Colombian Institute of Anthropology and History. Notwithstanding the above, for each of the phases of the Preventive Archaeology Program that involve prospecting activities or archaeological excavations, the interested party must request the respective intervention authorization from the ICANH.
526. In turn, article 2.6.5.7 of Decree 1080 of 26 May 2015 states that:415
The Archaeological Management Plan must be conducted as approved by the ICANH and it may involve one of the following
415 Decree 138 of 2019 modified Part VI of Decree 1080 of 2015. However, Article 2.6.5.7 of Decree 1080 of 2015 was not modified in its text. Furthermore, the transitional regime of the same in article 4, states that: "In general, the new procedure will apply to procedures that are in progress. However, the interested party may choose whether to update their process to the new guidelines, or to finish it under the regulations under which it was initiated." Therefore, as explained by the expert INERCO in his expert report in section 3.2 (CER-005), the permits processed for UF 2 were not affected by the change in regulations. ↩
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activities: a) verification and monitoring activities; b) excavation and recovery activities; c) specialized laboratory and analysis activities. The ICANH will specify in the terms of reference to be issued the content and periodicity of the progress reports, as well as the terms of the final report.
527. Fifth, article 1 paragraph 10 of Decree 833 of 26 April 2002 defines what an archaeological management plan is, which is complemented by the Legal Regime and Technical Guidelines for Preventive Archaeology Programs in Colombia of 15 July 2010. In this document, the ICANH presented the legal guidelines to implement Preventive Archaeology Programs in the context of the design, construction and operation of road infrastructure construction projects, and defined the stages for the development of Preventive Archaeology Programs in these projects.
528. Sixth, the first paragraph of Section 15 of the Concession Agreement establishes that the dispute resolution mechanisms agreed by the Parties shall be subject to the provisions of Law 1563 of 2012. Section 15.1(a) also establishes the agreement of the Parties that the decision of the Amiable Compositeur on any disputes expressly agreed in the Concession Agreement is final and binding for the Parties. Furthermore, in resolving a dispute, Section 15.1(f)(iv) of the Concession Agreement entitles the Amiable Compositeur to interpret the provisions of the Concession Agreement. Additionally, Section 15.1(k)(vii) of the Agreement establishes the binding force of the Amiable Compositeur’s decisions, and states that the decision shall have binding force between the Parties and that it shall have settlement effects in accordance with the Applicable Law. Accordingly, Article 60 of Law 1563 regulates the effects of the decisions of Amiable Compositeurs, and provides that:
The Amiable Compositeur shall act as an agent of the parties and, in its decision, it may specify the scope or form of compliance with the obligations arising from a legal transaction, it may determine whether there has been a breach of contract and it may decide on conflicts of liability arising between the parties, among other determinations.
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The decision of the Amiable Compositeur shall produce the legal effects of a settlement agreement.
Unless otherwise provided for, the decision of the Amiable Compositeur shall be based on equity, notwithstanding that the Amiable Compositeur may resort to legal rules, if it considers it convenient.
529. In turn, article 2483 of the Colombian Civil Code regulates the effects of a settlement agreement, namely:
The settlement agreement produces res judicata effects in the last instance; but a declaration of annulment or rescission may be sought, in accordance with the preceding articles.
530. In accordance with the obligations framework contained in the Concession Agreement, in Technical Appendices 6 and 8, in the EERs-UF 2, in the decrees and in the corresponding law, the Arbitral Tribunal considers that the counterclaimant, ANI, is not right in its counterclaim alleging a breach of the archaeological obligations related to UF 2.
531. First, the counterclaim relating to UF 2 was largely presented only with general and conclusory allegations, without specificity. In addition, the claim was not supported by specific and detailed evidence, only by several reports from the Supervisor, statements from ICANH, and communications between the Parties and the Supervisor that were submitted as evidence. Therefore, the lack of precision and definition in the formulation and substantiation of the claim leads this Tribunal to conclude that [ANI] did not satisfy the burden of proof to identify POB’s alleged specific breaches.
532. For the resolution of the claim examined in this Section, it is necessary to point out that ANI brings up some facts that occurred prior to the EERs-UF 2, particularly at the
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archaeological site called Los Alcaparros;416 both in the preliminary issues section regarding the breaches in archaeological matters,417 as well as in the facts section that serve as the basis for the Counterclaim.418
533. As regards these particular facts invoked by ANI, POB states that they were the basis of ANI’s position prior to the EERs-UF 2.419 Furthermore, POB asserts that they are the basis for ANI’s claim and arguments before the Amiable Compositeur,420 and that they constitute the same arguments raised in the Counterclaim.421
534. Consequently, POB argues that any dispute related to a claim based on the facts that occurred before the EERs-UF 2 has already been settled by the Amiable Compositeur 422 and, therefore, the counterclaim is subject to res judicata.423 Thus, the scope of the decisions made in December 2018 by the Amiable Compositeur, pursuant to the Concession Agreement at Section 15(a), instructs this Tribunal. Thus, if the decision on the facts, claims and arguments presented during the Exemption of Liability Event proceedings derives from the same ones raised in the Counterclaim, this Tribunal can determine whether res judicata is applicable.
535. In its decision No. 15854 of December 2018, regarding El Divino Niño archaeological site, the Amiable Compositeur stated that:424
There remain some brief considerations in relation to ANI’s argument that the Concessionaire failed to
416 ANI Statement of Counterclaim, pp. 66-75. ↩
417 ANI Statement of Counterclaim, pp. 10-19. ↩
418 ANI Statement of Counterclaim, pp. 60-83. ↩
419 POB and S&B Statement of Defense to the Counterclaim, ¶ 664. ↩
420 The EER claims regarding the archaeological findings of both El Divino Niño and Los Alcaparros in relation to UF2 were made jointly by the same Amiable Compositeur Panel, however, it issued two separate decisions. ↩
421 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 665-666. ↩
422 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 660, 663, 667-669. ↩
423 POB and S&B Statement of Defense to the Counterclaim, ¶ 664. ↩
424 Exhibit 8.1.7.1, p. 39. ↩
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comply with its obligations regarding archaeological management.
536. ANI submitted to the Amiable Compositeur evidence such as CP- PER-3314-2018,425 identified in these proceedings as Exhibit ANI 8.1.11.2, CP- PER3468-2018,426 identified in these proceedings as Exhibit ANI 8.1.11.3, and CP- PER-3659-2018, identified in these proceedings as Exhibit ANI 8.1.11.18,427 among others.
537. Likewise, in Decision No. 15856 of December 2018, regarding Los Alcaparros archaeological site, the Amiable Compositeur stated:
There remain some brief considerations in relation to ANI’s argument that the Concessionaire failed to comply with its obligations regarding archaeological management.
538. ANI submitted to the Amiable Compositeur evidence such as CP-PER-3314-2018,428 identified in these proceedings as Exhibit ANI 8.1.11.2, CP-PER3468-2018, identified in these proceedings as Exhibit ANI 8.1.11. 3, CP-PER-3659-2018,429 identified in these proceedings as Exhibit ANI 8.1.11.18,430 and ICANH’s Minutes of the visit of 29 June 2018,431 identified in these proceedings as Exhibit ANI 8.1.18; among other evidence.
539. Therefore, this Arbitral Tribunal understands that the disputes on archaeological management based on facts prior to the declaration of the EERs-UF 2 were analyzed and decided by the Amiable Compositeur. Hence, these are subject to res judicata, in accordance with Article 60 of Law 1553 of 2012, Article 2483 of the Colombian Civil Code
425 ANI Statement of Counterclaim, p. 66. Also, Exhibit 8.1.7.1, p. 24. ↩
426 ANI Statement of Counterclaim, p. 69. Also, Exhibit 8.1.7.1, p. 24. ↩
427 ANI Statement of Counterclaim, p. 72. Also, Exhibit 8.1.7.1, p. 24. ↩
428 ANI Statement of Counterclaim, p. 66. Also, Exhibit 8.1.7.1, p. 24. ↩
429 ANI Statement of Counterclaim, p. 69. Also, Exhibit 8.1.7.1, p. 24. ↩
430 ANI Statement of Counterclaim, p. 72. Also, Exhibit 8.1.7.1, p. 24. ↩
431 ANI Statement of Counterclaim, p. 72. Also, Exhibit 8.1.7.2, p. 25. ↩
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and Section 15 of the Concession Agreement.
540. The above is supplemented by ANI’s own statement where it acknowledges that the Amiable Compositeur “assessed the Concessionaire’s conduct and considered it in accordance with the diligence requirements set forth in the Agreement”.432
541. ANI has not objected to the decisions of the Amiable Compositeur as inappropriate or outside or in disregard of the power granted by the Parties to it in the Concession Agreement.433 Therefore, such decisions are final and binding on the Parties pursuant to Section 15(a) of the Agreement. Moreover, in the present arbitration proceedings, ANI has not claimed that such decisions of the Amiable Compositeur overstepped its authority. Therefore, the claim for breach of the archaeological obligations based on facts prior to the EERs-UF 2, enjoy res judicata effects among the Parties.
542. However, although it is true that in its pleadings ANI bases its counterclaim on subsequent events, and even expressly clarifies that it only refers to issues subsequent to EERS-UF 2, it is evident in several instances of its submissions that ANI does refer to events prior to EERs-UF 2. Thus, considering the decisions of the Amiable Compositeur and its res judicata character, the Tribunal understands that said claims must be rejected.
543. Regarding the facts that occurred after the EERs-UF2, which are the basis of the counterclaim related to UF 2 filed by ANI,434 there is no res judicata effect and this Arbitral Tribunal has the power to decide over that claim. Therefore, we will proceed to settle the dispute considering only these subsequent facts.
544. The allegation of lack of sufficient archaeological personnel in the recovery sites, and even in the laboratory, does not imply an improper Social and Archaeological
432 ANI Statement of Counterclaim, p. 76. ↩
433 ANI Reply on the Counterclaim, ¶ 236. ↩
434 ANI Statement of Counterclaim, p. 83. ↩
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Management of the Project, nor is it a determining factor as to the failure to overcome the EER. ANI presented different requirements made to POB between 2019 and 2021,435 such as, for example, ANI Exhibits 8.1.28.5, 8.1.28.6, 8.1.28.6, 8.1.28.7, 8.1.28.8, among others.
545. These requirements made by the Supervisor requested or reminded of the need to have the necessary resources to overcome the EERs, and to explain the reasons for the decrease in the personnel in charge of the excavations. In addition, ANI claims that such requirements “were not answered or ruled on in order to determine full compliance with the obligations”.436 In response to this, POB claims to have answered and complied with ICANH’s437 recommendations, providing different communications through POB Exhibit C-233, demonstrating that POB acted in a diligent manner.
546. In addition to the above, section 5.2.4 of INERCO’s expert report (POB Exhibit CER-005), explains that:438
There are no objective criteria to affirm that there was a shortage of professionals and assistants in the archaeological activities; ANI does not state in any of its communications what is the favorable and sufficient number of personnel for the attention of the EERs.
547. POB Exhibit CER-005 also explains that the archaeological work was done “continuously and with personnel approved by ICANH, according to the needs of the project”.439
548. In the same vein, during the Final Hearing of Evidence, the expert archaeologist Tatiana Santa testified:440
It is also important to mention here that the staff is being defined by the archaeologist. The archaeologist is the one who defines
435 ANI Statement of Counterclaim, p. 81. ↩
436 ANI Statement of Counterclaim, p. 68. ↩
437 POB and S&B Statement of Defense to the Counterclaim, ¶ 625. ↩
438 Exhibit CER-005, pp. 44-45. ↩
439 Exhibit CER-005, p. 45. ↩
440 Transcript of Final Trial Hearing 2022.12.15 P2, p. 15. ↩
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how many people he needs to handle the finding, how many people he can have in his excavation.
549. Thus, POB was able to demonstrate that it is the archaeologist responsible for the findings who defines the resources to be used in the recovery works; without ANI presenting any expert on the matter to challenge whether this corresponds to science or not. Therefore, POB acted in a reasonable and advisable manner regarding its duty on Social and Archaeological Management.
550. The allegation of failure to protect the enclosures to the archaeological sites, in the same way, does not imply an improper Social and Archaeological Management of the Project, and nor is it a determining factor for the failure to overcome the EER. ANI factually substantiates the breach of the obligations with the presentation of several requirements made by the Supervisor to POB from 2019 to 2021.
551. For example, ANI Exhibits 8.1.28.1, 8.1.28.7, 8.1.28.8 and 8.1.28.9, among others, demonstrate requests to devote reasonable resources for the adequate protection of the archaeological findings. However, in the same way, POB responded to such requirements 441 and complied with ICANH’s suggestions, as evidenced in the documents provided in POB Exhibit C-233.
552. In addition, POB demonstrated that, due to COVID-19 and the restriction measures imposed by the Government of Colombia, during a period of time it was unable to adequately address the enclosures, however, it took reasonable and advisable measures under the circumstances442, thus evidencing that POB fully complied with its obligations.
553. Similarly, POB Exhibit CER-005 explains and demonstrates that443 :
[T]he coverings in the archaeological areas are made in order to make recovery tasks easier to perform, avoiding delays due to
441 Statement of Defense to the Counterclaim, par. 633-637. ↩
442 Statement of Defense to the Counterclaim, par. 638-640. ↩
443 Exhibit CER-005, p. 46. ↩
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weather conditions, either rain or sun. [...] this does not mean that greenhouse-type enclosure constructions are required from a technical point of view.”
554. In the same sense, archaeologist Tatiana Santa testified during the Final Hearing of Evidence that: “enclosures are made in some archaeological sites to make the work easier, but it is not necessarily for the protection of the heritage”.444 Therefore, POB acted in a reasonable and advisable manner regarding its Social and Archaeological Management duties.
555. ANI did not challenge the declarations of archaeologist Tatiana Santa, nor did it present any expert opinion in response to the INERCO report. The argument that witness Santa does not have the “expertise to issue this type of report (this is her first opinion) and, moreover, that she expressed her opinions based on highly biased information”,445 is not persuasive for this Arbitral Tribunal. This is because, as witness Santa explained during the Final Evidentiary Hearing, the opinions issued in Exhibit POB CER-005 were made based on the intervention authorizations granted by the ICANH, and on the Archaeological Management Plan approved by the ICANH.446
556. Furthermore, ANI’s witness, Ms. Natalia Mayorga, the Supervisor’s representative, who testified about the inquiries to POB for its Social and Archaeological Management, did not testify about the qualifications of the archaeologist Ms. Santa. Therefore, POB did not breach its archaeological obligations.
557. Regarding the authorizations and the Archaeological Management Plan, and the breach alleged by ANI that without such authorizations POB could not carry out the works to overcome the EER, the Tribunal does not find any breach,
444 Transcript of Final Trial Hearing 2022.12.15 P2, p. 15. ↩
445 ANI Post-Hearing Memorial, par. 145. ↩
446 Transcript of Final Trial Hearing 2022.12.15 P2, pp. 8-9. ↩
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neither to the Concession Agreement, nor to the law or to the obligations defined by the Amiable Compositeur.
558. POB demonstrated that it processed all the authorizations, the Archaeological Management Plan, and that it conducted an adequate Preventive Archaeology Program in the Contractual Social Management Plan.447 It was also demonstrated that the Authorization for Archaeological Intervention No. 8559, contrary to ANI’s448 allegations, was renewed and that the ICANH extended the term as evidenced in POB Exhibit C-227.
559. In addition, it is clear from the record, and unchallenged, that ICANH never sanctioned POB 449 for failing to comply with the different Authorizations for Archaeological Intervention issued during the work’s duration, or with the Archaeological Management Plan, or with the applicable law. Thus, POB not only complied with acquiring the required permits, but it also carried them out in compliance with ICANH guidelines and the mandate of Colombian law.
560. On the other hand, regarding the obligation to prepare and submit the final report of the preventive archaeology program, the Arbitral Tribunal finds that there is a breach of contractual and legal duties. Although Authorization for Archaeological Intervention No. 6429 expired,450 and the same purpose was assigned to a new authorization for archaeological intervention,451 the final report of Authorization for Archaeological Intervention No. 6429 has not been submitted.452
561. POB Exhibit CER-005 does not explain or demonstrate, as to this particular report, that it has been submitted to the public entity, and POB has not submitted reliable, clear and direct evidence that such final report has been presented.
447 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 588-606. ↩
448 ANI Statement of Counterclaim, p. 82. ↩
449 POB and S&B Reply, ¶ 253. ↩
450 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 600-603. ↩
451 Exhibit 8.1.33 (CE-1061-2020), p. 1. Also Exhibit C-224. ↩
452 Exhibit 8.1.33 (CE-1061-2020), p. 2. Also Exhibit C-222. ↩
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562. However, the failure to carry out this administrative procedure is neither relevant nor determinant to the Social and Archaeological Management, nor to the reasonable and advisable activities required to overcome the EER. This relevance is confirmed, contrary to what ANI claims,453 as demonstrated,454 by the fact that the recovery of the UF 2 findings was carried out in accordance with the ICANH guidelines and the applicable law.455
563. Furthermore, “the interventions associated to the works and activities previously impacted by the aforementioned Exemption of Liability Events of Functional Unit 2, comply with the Technical Specifications identified for this event in Technical Appendix No. 1”,456 hence, the Parties signed the Completion Minutes in relation to UF 2. Therefore, POB has not breached any of its obligations in archaeological matters.
564. With regard to the lack of diligence in the Social and Archaeological Management, which purportedly delayed the overcoming of the Exemption of Liability Event,457 and consequently caused a breach of the deadlines defined in the EERs-UF 2,458 the Tribunal considers that POB’s actions were within what was reasonably possible and advisable as mandated by the Concession Agreement in Section 14.2(f).
565. According to the evidence presented, the archaeological site Los Alcaparros located in UF 2, involves a great archaeological magnitude and complexity in its administration.459 This magnitude and complexity is evidenced by the fact that the project carried out by POB has revealed approximately 41% of all the findings of all the fourth generation (4G) projects carried out in Colombia.460
453 ANI Statement of Counterclaim, p. 289. ↩
454 Exhibit CER-005, pp. 7-8, 33, 35, 39. ↩
455 POB and S&B Statemen of Defense to the Counterclaim, ¶ 627. ↩
456 Exhibit C-240; Exhibit 8.1.28.2. ↩
457 ANI Statement of Counterclaim, p. 83. Also in ANI Reply on the Counterclaim, ¶¶ 237, 244. ↩
458 ANI Post-Hearing Memorial, ¶¶ 147-150. ↩
459 Exhibit CER-005, p. 39. ↩
460 Exhibit CER-005, p. 39. ↩
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566. For example, at the Los Alcaparros site “at least 200 funerary concepts” have been found;461 while at the El Divino Niño site “26 tombs have been found, which are a reference for the study of past Muisca societies”;462 among other findings of ceramic fragments, lithic artifacts and high density fauna remains (See Table 4-5),463 conditions that, in accordance with the actions taken by POB, demonstrate compliance.
567. Considering this, POB proved that it requested the extension of Authorizations for Archaeological Interventions No. 6429 and No. 8559464 with the aim of completing the extensive archaeological work and thus overcoming the EER. The testimony of archaeologist Tatiana Santa clarified that “the magnitude of the findings at Los Alcaparros and its special characteristics may explain why this site has not yet been completed”.465
568. Regarding the El Divino Niño archaeological site, “the complexity and particularity of the archaeological evidence identified has to do with the density and type of tombs found”.466
569. Furthermore, ANI does not deny the magnitude and complexity of the archaeological findings in UF 2, nor did it present direct and concrete evidence challenging that such magnitude and complexity were not the determining factors for the delay. Therefore, ANI has not proven that POB failed to comply with its archaeological obligations, while POB succeeded in proving that it complied with such obligations.
570. Finally, in relation to the argument that the Completion Minutes of Functional Unit 2 do not affect POB’s lack of diligence in archaeological matters, the Tribunal considers that, on the contrary, it does have an impact.467 The Completion Minutes of Functional Unit 2, both partial and total, demonstrate that POB acted
461 Exhibit CER-005, p. 41. ↩
462 Exhibit CER-005, p. 42. ↩
463 Exhibit CER-005, p. 41. ↩
464 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 596-609. ↩
465 Transcript of Final Trial Hearing 2022.12.15 P2, p. 5. ↩
466 Exhibit CER-005, p. 39, 42. ↩
467 ANI Reply on the Counterclaim, ¶ 254. ↩
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within what is reasonably possible and advisable, since the Completion Minutes acknowledge compliance with “the minimum acceptance values for the Indicators and the Technical Specifications”,468 criteria agreed by the Parties in Section 4.17 of the Concession Agreement.
571. In the same Completion Minutes it was acknowledged that “the existence of the EER at the Los Alcaparros site and the lack of construction of the pedestrian bridge at the El Divino Niño site does not affect compliance with the Agreement”.469 Furthermore, the evidence submitted and the arguments presented in the Arbitration, as has been assessed in this Section, support the absence of breaches by POB with respect to each of its obligations. Therefore, the execution of the Completion Minutes is relevant, and no breach by POB is found to subsist.
572. In conclusion, the Tribunal finds no breach by POB regarding the archaeological obligation in UF 2. First, POB acted in a reasonably possible and advisable manner, within the circumstances, as it made available all personnel and technical resources necessary for the protection of the archaeological sites; it installed the enclosures and appropriately kept them in place to protect the findings; and it processed and acquired all the necessary permits and authorizations to conduct the Preventive Archaeology Program in the Contractual Social Management Plan.
573. Second, POB acted diligently in its Social and Archaeological Management, complying with ICANH guidelines, and thus fulfilling the contractual obligations and the mandate of law.
574. Third, POB performed the necessary activities to overcome the Exemption of Liability Event, although it is true, as alleged by ANI, that to date the EER at the Los Alcaparros site has not been overcome.
468 Exhibit C-240, ¶ 16. Also, Exhibit 8.1.28.1, ¶ 47. ↩
469 Exhibit C-240, ¶ 16. ↩
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575. Fourth, ANI did not meet its burden of proof, failing to demonstrate non-compliance by POB. In turn, POB proved that it complied with its obligations in archaeological matters.
576. The Arbitral Tribunal therefore dismisses ANI’s counterclaim regarding POB’s obligations in archaeological matters in relation to UF 2.
577. ANI claims that POB failed to comply with the obligation to operate and maintain the road corridor with respect to UFs 4 and 5, because it did not duly carry out the activities required to ensure the continuity of service, accessibility and safety of the road corridor for users.470
578. ANI alleges that POB failed to comply with the O&M results obligation for the road corridor in UFs 4 and 5. ANI also argues that POB breached the obligation to guarantee the minimum standards of quality, service and accessibility of the road corridor, in accordance with the provisions of the Concession Agreement.471 Likewise, it alleges that POB completely halted the activities in UFs 4 and 5,472 and that it disregarded various requirements of the Supervisor regarding improper or poor O&M practices.473
579. ANI also argues that POB failed to comply with its obligations regarding Maintenance activities and Priority Interventions in the road corridor sections of UFs 4 and 5, as the Supervisor has pointed out by since 2017. The aforementioned breaches allegedly caused shoulder losses in several sectors and the transformation of some of these sectors into Critical Points.474
470 ANI Statement of Counterclaim, p. 19. ↩
471 ANI Statement of Counterclaim, p. 296. ↩
472 ANI Statement of Counterclaim, p. 304. ↩
473 ANI Statement of Counterclaim, p. 313. In the same sense, ANI Reply on the Counterclaim, ¶ 137. ↩
474 ANI Statement of Counterclaim, p. 314. In the same sense, ANI Reply on the Counterclaim, ¶ 137. ↩
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580. First, ANI argues that the Project Operation obligation includes guaranteeing the continuity of the service, as provided in section 3.1.1. of Technical Appendix 2; guaranteeing the integrity of the Project corridor, as provided in section 3.1.6 of Technical Appendix 2; and guaranteeing road safety, as provided in section 3.3.7 of Technical Appendix 2.475 Likewise, ANI argues that the Maintenance obligation includes having to correct the damages or deficiencies that may affect the road’s accessibility, identified by the Supervisor or by the Concessionaire itself, as provided in section 6.1 of Technical Appendix 2.476
581. Second, ANI argues that the Maintenance obligation is also of a legal nature, and that it entails that the Concessionaire must respect the quality standards and guarantee the continuity of service, as provided in Law 1508 of 2012.477
582. Third, ANI argues that the O&M obligation is permanent in nature, from the execution of the Infrastructure Delivery Minutes until the Hand-Back Minutes,478 and that it was not suspended by the execution of the EER Minutes dated 1 August 2018.479
583. Fourth, ANI argues that the O&M obligations of the road were not suspended by the EER either, since the EER Minutes determined that the Priority Interventions referred to in Section 4.3 of Technical Appendix 1 were not suspended by the EER and therefore, the Concessionaire should have continued with the works to guarantee accessibility and road safety conditions.480
584. ANI emphasizes that the O&M obligation “is not satisfied by the good intentions of the Concessionaire, but with the full and complete fulfillment of the
475 ANI Statement of Counterclaim, pp. 296-298. ↩
476 ANI Statement of Counterclaim, pp. 298-300. ↩
477 ANI Statement of Counterclaim, p. 301. ↩
478 ANI Statement of Counterclaim, p. 297. In the same sense, ANI Reply on the Counterclaim, ¶ 126. ↩
479 ANI Statement of Counterclaim, p. 308. In the same sense, ANI Reply on the Counterclaim, ¶¶ 134-136. ↩
480 ANI Statement of Counterclaim, pp. 306-309. ↩
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Provision of the services.”481 This obligation involves “carrying out the works necessary to ensure the optimal provision of transportation, connectivity and traffic services”,482 which includes “a comprehensive service, that is not limited to the cross section (crown, lanes, berms, gutters, embankment shoulders, slopes) from the crown ditches and the cuts, among others”.483
585. ANI alleges that the road corridor’s conditions have critically deteriorated as a result of POB’s failure to carry out O&M and/or Priority activities, which are essential ongoing obligations, in force and enforceable on the Concessionaire because they were not suspended by the EER. For the above reasons, the safety and accessibility of the road have not been guaranteed, thus breaching POB’s obligations undertaken during the Pre-Operational Stage.484
586. POB argues that it has diligently performed all the activities established in the Concession Agreement and in its Technical Appendices 1 and 2, including the O&M obligations in the Pre-Operational Stage of UFs 4 and 5.485 Furthermore, POB points out that it has diligently informed ANI of the emergence of Critical Points on the road in UFs 4 and 5, the attention of which would be outside the obligations acquired by POB in the Concession Agreement. Likewise, POB maintains that the activities required by the Supervisor and ANI are a consequence of ANI’s contractual breaches.486
587. First, POB argues that the O&M obligations in the Pre-Operational Stage are expressly and precisely stated in the Concession Agreement, as provided for in Law 1508 of 2012.487 Likewise, it argues that the quality standard and service levels required by law are those defined in the Agreement, according to the characteristics
481 ANI Reply on the Counterclaim, ¶ 129. ↩
482 ANI Reply on the Counterclaim, ¶ 127. ↩
483 ANI Reply on the Counterclaim, ¶ 130. ↩
484 ANI Reply on the Counterclaim, ¶ 138. ↩
485 POB and S&B Statement of Defense to the Counterclaim, ¶ 257. ↩
486 POB and S&B Statement of Defense to the Counterclaim, ¶ 262. ↩
487 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 269-271, 300. ↩
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of the Project, and that they do not have an effect beyond what the Parties agreed.488
588. Second, POB argues that the only Service Levels applicable in relation to the Project’s Operation and the Maintenance of UFs 4 and 5 in the Pre-Operational Stage are the operating indicators called O4 and O5, which refer to the response time for incidents, accidents and emergencies as provided in the Concession Agreement and Technical Appendix 2, Table 2.489
589. Third, POB argues that the Maintenance obligation set forth in paragraph 6.1 of Technical Appendix 2 is not applicable during the Pre-Operational Stage.490 Technical Appendix 4 expressly states that it is not applicable in Section 1 thereof.491
590. Fourth, POB argues that the obligation for Priority Interventions consists of the performance of all activities required to meet the minimum Service Levels of the Pre-Operational Stage, which are not Interventions.492 Furthermore, it argues that, since the minimum Service Levels in the Pre-Operational Stage of UFs 4 and 5 are defined in Table 1 of Technical Appendix 2, POB was only required to respond to incidents, accidents and emergencies.493
591. Fifth, POB argues that addressing the Critical Points requires the performance of activities that qualify as Interventions. These Interventions are suspended by the EER494 and they fall outside of the O&M’s obligations framework established in Technical Appendix 2.
488 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 271-275. ↩
489 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 276-277, 280-283. ↩
490 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 284, 364. ↩
491 POB and S&B Statement of Defense to the Counterclaim, ¶ 302. ↩
492 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 284, 316, 318. ↩
493 POB and S&B Statement of Defense to the Counterclaim, ¶ 282. ↩
494 POB and S&B Statement of Defense to the Counterclaim, ¶ 314. ↩
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592. POB claims that it has carried out all the activities required by it within the framework of the Concession Agreement and that it has not breached any obligation. This allegation is supported by the analysis carried out by FTI, who, after evaluating the communications between POB, ANI and the Supervisor, was able to conclude in its report CER-004 that all activities were performed, and that POB complied with the minimum Service Levels for the Pre-Operational Stage, specifically those related to indicators O4 and O5.495 Furthermore, POB underscores such compliance with the fact that the Supervisor and ANI have never rejected the Service Levels of the Preoperational Stage of UFs 4 and 5.496
593. POB states that the activities to address the Critical Points that have arisen as a consequence of the suspension of the construction of UFs 4 and 5 comprise slope reinforcement, earthworks and the creation of new drainage, among others. Relying on FTI’s evaluation in its report CER-004, POB argues that the tasks to be performed in the existing Critical Points in the layout of UFs 4 and 5 are located in areas affected by the EER, and, since they constitute Interventions, they cannot be carried out.497
594. POB states that the activities required by the Supervisor and ANI are related to Critical Points that emerged after 2018, and that these are Interventions suspended by the EER.498 Furthermore, it argues that they are not POB’s obligation, since these activities are a consequence of ANI’s breaches.499 POB concludes that it has complied with its obligations. The continuity of the service, safety and accessibility of the road allegedly is ANI’s responsibility, according to the Agreement’s provisions and by virtue of ANI’s actions.
495 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 305-307. ↩
496 POB and S&B Statement of Defense to the Counterclaim, ¶ 308. ↩
497 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 319-325. ↩
498 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 333-334, 338-340. ↩
499 POB and S&B Statement of Defense to the Counterclaim, ¶ 345. ↩
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595. The Arbitral Tribunal will first clarify the framework that regulates the obligations, in order to subsequently present its analysis that will lead to the resolution of the dispute regarding the O&M obligation of UFs 4 and 5.
596. First, the Concession Agreement establishes in general terms the framework of the Parties’ obligations. In particular, Section 4.2 sets out the main obligations during the Preconstruction Phase.500 Paragraph (p) establishes that the Concessionaire assumes the results obligations provided for in the Agreement and its Appendices, upon receiving the infrastructure. In addition, paragraph (v) establishes that the Concessionaire must carry out the Project’s O&M, in accordance with the requirements set forth in Technical Appendix 2 and that it must comply with the Minimum Service Level of the infrastructure foreseen for the Preconstruction Phase. Thus, the O&M obligations are precisely and specially defined in Technical Appendix 2.
597. Second, regarding the risks assigned to the Concessionaire, Section 13.1(a)(i) of the Concession Agreement establishes that the infrastructure’s O&M obligation - even in the Pre-operational Stage- is a result-based obligation, and that the favorable or unfavorable effects derived from the conditions of the infrastructure will not reduce this obligation.
598. Third, paragraph 4.3 of Technical Appendix 1 defines what a Priority Intervention is, and establishes, in paragraph (c), that Priority Interventions will not be considered interventions as established in the General Part and the Technical Appendix. It also lists what these Priority Interventions consist of, namely:
500 Reply on the Counterclaim, par. 124. ↩
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(a) In order to comply with the minimum service levels for the Pre-Operational Stage established in Technical Appendix 2, the Concessionaire must carry out all activities that, according to the state of the art, are necessary for such purpose. These activities will be called Priority Interventions, which may include, among others, the following:
(b) In order to meet the minimum service levels on the Project infrastructure that is not paved, Priority Interventions may include, among others, the following:
599. Fourth, specifically, Technical Appendix 2 contains the Concessionaire’s O&M obligations. Part 3 establishes the Operation obligation. In particular, section 3.1 regulates the general principles of Project Operation, namely: continuity in the service (paragraph 3.1.1); consistency (paragraph 3.1.2); and road safety (paragraph 3.1.5). Likewise, relevant for the counterclaim on the breach of the O&M obligation, section 3.3 regulates the specific Operation obligations.501 Namely: Operation of the road during the Pre-operational Stage (paragraph 3.3.1); response to incidents, accidents and emergencies (numeral 3.3.3.1); and road safety (numeral 3.3.7).
600. Fifth, section 3.3.1 of Technical Appendix 2 establishes that: “The Concessionaire has the obligation to comply with the minimum service levels for the pre-operational stage established in the following table”:
501 Reply on the Counterclaim, par. 125,126, 136. ↩
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For the following subsectors, the measurement of the following Service Levels in Table 1 will not apply:
| UF | Origin) | Destination | Approximate length, origin destination | Service Level not measured |
|---|---|---|---|---|
| 4 | La Calera | Choachi | 31 Km | State of margins, central separator. Service Area and Project Corridor Surface, longitudinal and transverse drainages Vertical Signage Potholes |
| 5 | Choachi | Cáqueza | 21.27 Km | State of margins, central separator. Service Area and Project Corridor Surface, longitudinal and transverse drainages Vertical Signage Potholes |
601. It is evident from the table that the measurement of the Minimum Service Levels in UFs 4 and 5 does not require the performance of Priority Interventions.
602. Sixth, the EER Minutes expressly states:502
[A]s a consequence of the occurrence and declaration of this Exemption of Liability Event, the Parties agree to SUSPEND from 31 October 2017 the term for the performance of all works and activities associated with the Interventions corresponding to Functional Units 4 and 5 of the Project.
603. It also expressly establishes:503
[R]emaining enforceable and in force only: [...] obligations related to the Priority Interventions as defined in Section 4.3 of Technical Appendix 1, as well as the operation and maintenance obligations corresponding to the pre-operational stage in accordance with Section 3.3.1 of Technical Appendix 2 of the
502 Exemption of Liability Event Minutes of 1 August 2018 (EER-UF 4&5), p. 29, par. Two. ↩
503 Ibid. ↩
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Concession Agreement, provided that they are not affected by the present EER declaration.”
604. Finally, it establishes that:504
[N]otwithstanding the foregoing, the Concessionaire must comply with the contractual obligations that are applicable during the so-called “Special Period”, provided that said obligations are not affected by the EER recognized herein.
605. In accordance with the obligations framework contained in the Concession Agreement, in the Technical Appendices 1 and 2 and in the EER Minutes, the Arbitral Tribunal considers that ANI is not justified in claiming POB’s breach of the O&M obligation in UFs 4 and 5.
606. It is essential to state that Law 1508 of 2012 and its regulatory decree, invoked by ANI in its Counterclaim505 and accepted by POB in the respective Statement of Defense,506 provide that:507
The quality standard refers to the minimum characteristics inherent to the good or service that is the subject matter of the agreement, and the service level is the condition or requirement established for an administration indicator to define the scope and characteristics of the services to be provided.
607. Thus, the service levels and the quality standard that must be met in order to be entitled to the Retribution are those specifically agreed by the Parties in the Agreement, since they “must respond to the characteristics of each project”.508 Therefore, the obligational framework that governs POB regarding O&M is the one
504 Exemption of Liability Event Minutes dated 1 August 2018 (EER), p. 30, ¶ 2 ↩
505 ANI Statement of Counterclaim, pp. 301-302. ↩
506 POB and S&B Statement of Defense to the Counterclaim, ¶ 270. ↩
507 ANI Statement of Counterclaim, p. 302. Also, POB and S&B Reply, ¶ 271. ↩
508 Article 6 of Decree 1467 of 2012 cited in the ANI Statement of Counterclaim, p. 302. ↩
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provided in the Concession Agreement as detailed above, and not the one established in the law, generally.
608. Considering the above, first, the obligatory framework does not require POB to carry out works or activities beyond those established in the Service Level indicators for UFs 4 and 5.
609. Table 1 - Service Levels for the Pre-Operational Stage, contained in Technical Appendix 2, expressly excludes, for UFs 4 and 5, works or activities related to patching/shoveling, vertical signaling; surface, longitudinal and transversal drainage; and condition of margins; central separation; service area and project corridor,509 leaving only Service Levels O4 and O5, as established in paragraph 3.3.3.1, regarding incidents, accident and emergencies response time.
610. Likewise, paragraph 3.3.1 of Technical Appendix 2 states that:510
The results obligations in terms of operation and service level that are required of the Concessionaire before the signing of the Functional Unit Completion Minutes will be those indicated in Table 1 - Service Levels for the Pre-Operational Stage.
611. Therefore, the exclusion of said works and activities in accordance with Table 1 - Service Levels in UFs 4 and 5, delimits the obligations of the Concessionaire during the Pre-Operational Stage. It is strictly understood that, as the Concessionaire is not measured by the performance of these works or activities, the Concessionaire has no obligation in this regard.
612. It is true that POB accepted permanent result obligations to guarantee the continuity of the road service, road safety and the accessibility of the Project corridor. However, these obligations are general in nature and they are subject to the specific obligations of the Pre-Operational Stage. Based on the legal principle
509 Technical Appendix 2, p. 16. ↩
510 Technical Appendix 2, p. 17 par. 5. ↩
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that special matters prevail over general matters, the obligational framework is established, and the Tribunal concludes that POB has no obligation beyond the attention to incidents, accidents and emergencies according to the Service Levels in UFs 4 and 5.
613. The obligations to guarantee the continuity, regularity, quality of the technical service, road safety and integrity of the concessioned road are binding, but they can be avoided, contrary to what ANI claims, because the Concession Agreement provides for exceptions in its text, as evidenced in paragraph 3.3.1. of Technical Appendix 2.
614. Additionally, the Priority Interventions established in paragraph 4.3 of Technical Appendix 1, constitute the works or activities necessary to comply with the Minimum Services in the Pre-Operational Stage, which, as is understood, are defined in paragraph 3.3.1 of Technical Appendix 2, and particularly in Table 1 - Service Levels in the Pre-Operational Stage. Therefore, the argument raised by ANI, that POB has not complied with its Maintenance obligation in UFs 4 and 5, due the lack of performance of Priority Interventions as described in paragraph 4.3 of Technical Appendix 1, has no contractual support, since they are not works or activities that POB its obliged to perform.
615. On the other hand, the EER Minutes expressly and clearly establish that the Priority Interventions, as defined in paragraph 4.3 of Technical Appendix 1, as well as the O&M obligations on the Pre-Operational Stage according to paragraph 3.3.1 of Technical Appendix 2, are not suspended by the EER, as long as they are not affected by the EER. Therefore, POB has no obligation to perform works, either as Priority Interventions or as O&M, if they are affected by the EER.
616. In this regard, the Critical Points on the road, which affect accessibility, road safety, continuity and regularity of service, are related to the lack of performance of O&M works in UFs 4 and 5 since 2017. However, such failure is a consequence of the impossibility to perform works due to the presence of the
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springs, i.e., due to the occurrence of the EER, and is not by itself a breach of any of POB's obligation.
617. In addition, POB's FTI expert, in its opinion CER-004, states that:511
The activities required to fix the so-called Critical Points are considered Interventions, that is, works or activities that require the use of tools in sectors that coincide with the protection round of the springs, which are consequently suspended.
618. POB's FTI expert believes that attention to Critical Points requires:512
Construction works of mechanically stabilized walls, recovery of the subgrade by rebuilding the embankment, construction of drainage channels and accounts, embankment stabilization activities and protection works.
619. These works go beyond of POB's O&M obligations set out in Technical Appendix 2. Therefore, POB has not breached its obligations.
620. Furthermore, POB complied with its O&M obligations and carried out the Priority Interventions, as provided for in the obligatory framework, as stated by the FTI expert.513 POB has responded to incidents, accidents and emergencies in accordance with the Service Levels. In this regard, ANI has not argued any fault or defect in POB's performance, and therefore the Arbitral Tribunal does not recognize any default.
621. Finally, ANI did not gather or present evidence to prove the non-compliance in the different areas where O&M works were required, nor evidence to contradict POB's expert opinion, referring to the fact that the required activities were of such nature that they were suspended by the EER.
511 Exhibit CER-004, ¶ 73.3.-7.37. ↩
512 Exhibit CER-004, ¶ 7.3.10. ↩
513 Exhibit CER-004, ¶ 7.3.11. ↩
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622. The burden of proof required the claim to be formulated precisely. ANI did not accurately present the claim as to the incidents requiring POB's attention. Nor did it present with precision the claim as to the O&M works or activities to be expected from POB. Additionally, ANI did not precisely indicate on which sections of the UFs 4 and 5 track was POB required to carry out O&M works.
623. On the contrary, in its claim ANI only generically references “the deterioration of the concessioned corridor",514 stating that "the project's Supervisor has required POB to implement actions and measures that allows guaranteeing road safety"; and that there were “sectors that have deficiencies in their maintenance, as an example we present communications CP-PER-9630C-2021, CP-PER-9631C-2021, CP-PER-9440C-202 and CP-PER-9438C-2021".515
624. Additionally, the claim was based solely on Supervisor's reports and communications sent to POB by ANI and the Supervisor as evidence. But this evidence does not demonstrate, nor does ANI explain to the Arbitral Tribunal in a detailed, itemized and concrete manner, the scope of POB's alleged non-compliance. Therefore, the lack of specificity and precision in the formulation of the claim results in the failure to satisfy ANI's burden of proof.
625. The absence of detailed and segregated evidence of the works or activities necessary to comply with the Priority Interventions, and of attention to the Critical Points, leads the Arbitral Tribunal to conclude that POB complied with its obligations. The Supervisor's reports, which date from different times since 2018, are not sufficient evidence since they do not contradict POB's assertion that the Concessionaire had performed works that go beyond the obligatory contractual framework,516 and they do not respond to the requirements to perform such works in light of the EER Minutes.
514 ANI Statement of Counterclaim, ¶ 76. ↩
515 ANI Statement of Counterclaim, ¶ 77. ↩
516 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 310-314. ↩
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626. In turn, as noted above, POB submitted an expert opinion, CER-004, in which POB explained that the works and activities required by ANI and the Supervisor could not be carried out due to the presence of the springs.517 Furthermore, in the same exhibit CER-004, POB presented in detail the activities or works that could not be carried out as a consequence of the EER declaration.518
627. This expert evidence was not contested by ANI with any evidentiary means. Therefore, ANI did not satisfy its burden of proof by not contesting whether the works or activities, which POB was supposed to carry out, were not suspended or could not be carried out because they affected the spring protection zones. Therefore, in the absence of evidence to the contrary, the Arbitral Tribunal understands that O&M's obligations, necessary to permanently guarantee continuity, road safety and accessibility in the Project, beyond attending to incidents, accidents and emergencies response activities, were suspended.
628. The Arbitral Tribunal finds no breach of POB's O&M obligation in relation to UFs 4 and 5. First, the O&M obligation in the Pre-Operational Stage is defined by the Service Levels as set forth in Table 1 of Technical Appendix 2.
629. Second, the O&M obligation only consists of attention to incidents, accidents and emergencies as stated in numeral 3.3.3.1 of Technical Appendix 2.
630. Third, the permanent result O&M obligation is affected by the EER, which suspended all Intervention, Priority Intervention, activity or O&M work that impacts the areas protected by the presence of springs.
631. Fourth, POB has performed the necessary and required works in compliance with O4 and O5 service level Indicators.
517 Exhibit CER-004, ¶ 7.3.3 ↩
518 Exhibit CER-004, ¶¶ 7.3.9-7.3.10. ↩
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632. Fifth, the attention to Critical Points requires the performance of Interventions, i.e., works or activities that impact the areas protected by the presence of springs, which are suspended by the EER Minutes.
633. Sixth, ANI failed to meet its burden of proof by not indicating in an exact and detailed manner POB's acts that amount to a failure to comply with the obligational framework. Furthermore, ANI did not adequately challenge POB's evidence that that the required works are suspended by the EER Minutes.
634. Therefore, the Arbitral Tribunal dismisses ANI's counterclaim concerning POB's O&M obligation in UFs 4 and 5.
635. The Respondent claims, by way of compensation for damages, interest for POB's default in the payment of funding obligations 5, 6, 7 and 8 of the Supervisor Subaccount.519
636. The Respondent points out that, with the execution of the Concession Agreement, POB assumed the obligation to establish a Trust Fund [Patrimonio Autónomo] in accordance with Section 1.114 of the General Part of the Concession Agreement throughout a mercantile trust agreement. In turn, Section 3.14 of the General Part of the Agreement establishes that the referred Trust Fund must be formed by the following accounts: (i) Project Account and (ii) ANI Account. The ANI Account contains, among others, the Supervisor Subaccount, which is funded by the Concessionaire, under the terms established in Section 4.5 (e) of the Special Part of the Concession Agreement, and accordingly to the beginning of each contractual stage: (i) Preconstruction; (ii) Construction and; (iii)
519 Statement of Counterclaim, p. 26; Reply on the Counterclaim, ¶¶ 171-175. ↩
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O&M. ANI adds that Section 4.5(e) of the Special Part of the Agreement establishes the funding terms of the Supervisor Subaccount in the different Phases and Stages of the Agreement.520
637. The Construction Phase shall be funded “[w]ithin five (5) Days following the beginning of each three hundred and sixty-five (365) Day period counted from the Commencement Date of the Construction Phase".521
638. On the other hand, ANI points out that, Section 3.6 of the General Part of the Agreement, which regulates the respective interest on remuneration and late payment, establishes that “[t]he late payment rate applicable to the payments due by the Parties under this Agreement shall be the equivalent to the DTF plus ten percentage points (10%), but in no case a rate higher than the maximum rate allowed by the Applicable Law”.522
639. Thus, ANI indicates that, since the Construction Phase started on 15 December 2015, the funding corresponding to this stage had to be carried out annually on December 20, as maximum deadline.523
640. The Respondent claims that POB did not comply with the obligation to fully carry out the fifth, sixth and seventh installments on the Supervisor Subaccount, corresponding to the 2018, 2019 and 2020 periods, for which late payment interests were accrued since 20 December of each period, until 19 November 2021,524 and then updated to 22 July 2022.525
641. The Respondent calculates the default interest on each of these accounts as follows:
520 Statement of Counterclaim, pp. 55-56; ¶ 150; Statement of Counterclaim, pp. 330-335. ↩
521 Statement of Counterclaim, ¶ 152. ↩
522 ANI Statement of Counterclaim, p. 58; ANI Statement of Counterclaim, p. 337 ↩
523 ANI Statement of Counterclaim, ¶ 153; ANI Statement of Counterclaim, pp. 335-336. ↩
524 ANI Statement of Counterclaim, ¶ 154. ↩
525 ANI Reply on the Counterclaim, ¶ 171. ↩
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642. Funding 5, in the amount of COP $12,978,956,112 corresponding to the Construction Phase, was to be paid on 20 December 2018, however, POB made 2 partial payments: (i) on 13 April 2019 for COP $4,402,734.901 and (ii) on 7 December 2020 for COP $8,576,118,353. Therefore, ANI argues that POB is obliged to pay the amount of COP $3,180,932,398, which corresponds to the capital plus late payment interest, pursuant to the obligation to make Funding 5 installment.526
643. Funding 6, in the amount of COP $13,478,596,227 corresponding to the Construction Phase, was to be paid on 20 December 2019, however, POB made 1 partial payment for COP $4,572,309,472. Considering POB's partial payment, the calculation of late payment interest as of 19 November 2021 amounts to COP $2,960,022,269, for a total capital plus late payment interest of COP $11,866,309,024527.
644. Funding 7, in the amount of COP $13,679,069,843 corresponding to the Construction Phase, was to be paid on 20 December 2020, however, POB did not made any payment for this item, which has accrued late payment interest for the amount of COP $1,507,505,276.528
645. In total, and for this item, the Respondent considers that POB owes a total of COP $15,186,575,119.529
526 ANI Statement of Counterclaim, ¶ 155; Respondent's Post-Hearing Brief, ¶ 160. ↩
527 ANI Statement of Counterclaim, ¶ 156; Respondent's Post-Hearing Brief, ¶ 161. ↩
528 ANI Statement of Counterclaim, ¶ 157; Respondent's Post-Hearing Brief, ¶ 162. ↩
529 ANI Statement of Counterclaim, ¶ 157; Respondent's Post-Hearing Brief, ¶ 162. ↩
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646. The Respondent argues that these amounts are owed by POB to ANI pursuant to Articles 1602,530 1605,531 1608,532 1615,533 1617534 and 1625535 of the Civil Code, as well as case law of the Supreme Court of Justice and the Council of State on the notice of default due to late payment.536
647. Thus, considering that POB had the obligation to fund these accounts, which is an obligation to deliver an amount of money in favor of ANI, the Respondent concludes that the breach of this obligation implies the duty to compensate default interest due to late payment537.
648. The Respondent rejects POB's arguments in response to this claim.
649. First, ANI claims that it does have standing to claim in connection with the funding of the Supervisor Subaccount. The Respondent argues, based on the jurisprudence of the Council of State and the Constitutional Court, that a claimant has standing to sue if it has the potential to claim the
530 Civil Code, Article 1602: “Every legally concluded contract is a law for the parties, and cannot be invalidated except by their mutual consent or for legal reasons.” ↩
531 Civil Code, Article 1605: “The obligation to give contains the obligation to deliver the thing; and if it is a certain species or body, it also contains the obligation to preserve it until delivery, under penalty of paying damages to the creditor who has not defaulted in receiving." ↩
532 Civil Code, Article 1608: “The debtor is in default: 1.) When the obligation has not been fulfilled within the stipulated term; unless the law, in special cases, requires that the debtor be required to be placed in default. 2.) When the thing could not be given or performed but within a certain period of time and the debtor has let it pass without giving or performing it 3.) In other cases, when the debtor has been judicially subject to a counterclaim by the creditor". ↩
533 Civil Code, Article 1615: “Compensation for damages is due from the moment the debtor is in default, or, if the obligation is not to do, from the moment of the violation". ↩
534 Civil Code, Article 1617: "If the obligation is to pay a sum of money, compensation for damages due to delay is subject to the following rules: 1.) Contractual interest continues to be owed, if a higher than legal interest has been agreed upon, or legal interest begins to be owed, in the opposite case; remaining, however, in their force the special provisions that authorize the collection of current interest in certain cases. The legal interest is fixed at six percent per annum. 2.) The creditor has no need to justify damages when only charging interest; the fact of delay is sufficient. 3.) Late interest does not produce interest. 4.) The above rule applies to all types of income, royalties and periodic pensions." ↩
535 Civil Code, Article 1625: "Any obligation may be extinguished by an agreement in which the parties concerned, being capable of freely disposing of what is theirs, consent to render it null and void. Obligations are also extinguished in whole or in part: 1.) For the solution or effective payment." ↩
536 ANI Statement of Counterclaim, pp. 324-329. ↩
537 ANI Statement of Counterclaim, pp. 336-337. ↩
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entitlement to a right granted by law or if it has the ownership of the legal interest at stake in the proceedings.538
650. For the specific case, the Respondent argues that, pursuant to Section 2.6(A)(8) of the Parties' representations and warranties, specifically the Concessionaire declares and warrants that it is aware that the sole beneficiary of the ANI Account is ANI itself. Accordingly, Section 3.14 of the General Part of the Agreement also states that the sole beneficiary of the ANI Account is ANI itself. The Respondent reiterates that POB had the obligation to make the funding in accordance with the terms set forth in Section 4.5(e) of the Special Part of the Agreement, and that in Section 3.6 of the General Part of the Agreement the Parties agreed on the default interest and the applicable rate.539
651. Thus, ANI concludes that, as the sole beneficiary of the ANI Accounts —which includes the Supervisor Subaccount— it is entitled to proceed with the collection of the default interest agreed in the Agreement, as a consequence of POB's failure to fund.540
652. Second, the Respondent reiterates that POB breached its contractual obligations regarding the funding of the Supervisor Subaccount,541 for which POB owes default interest, the amount of which is updated as of 7 July 2022, the date of the filing of its Reply on the Counterclaim.542
653. The Claimants deny ANI's claim on the amounts and default interest regarding the Supervisor Subaccount funding.
538 ANI Reply on the Counterclaim, ¶¶ 146-151. ↩
539 ANI Reply on the Counterclaim, ¶¶ 152-155. ↩
540 ANI Reply on the Counterclaim, ¶¶ 156-160. ↩
541 ANI Reply on the Counterclaim, ¶¶ 162-170. ↩
542 ANI Reply on the Counterclaim, ¶¶ 171-176. ↩
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654. First, POB states its compliance with the contractual obligations to fund the Supervisor Subaccount, therefore the first of the requirements of contractual liability claimed by ANI would not be met.543
655. Second, POB indicates that ANI did not suffer a compensable damage, hence, the requirements of civil liability would not be met either.
656. The Claimants argue that, with this claim, ANI seeks to assert for itself resources that belong to the Trust Fund. POB argues that, in accordance with the applicable law, in particular Article 1233 of the Code of Commerce, trust funds [Patrimonios Autónomos] are a legal institution by virtue of which, through a trust contract executed with a trust entity, a body of rights is created with assets independent of those of the parties involved in the trust contract.544
657. POB argues that its obligation was to establish such trust fund and in relation to the Supervisor Subaccount, which is part of the ANI Account of the Trust Fund, the Agreement provides that (i) the origin of the resources are the funds that correspond to the Concessionaire; and (ii) the purpose of such resources is “the attention of the payments to the Supervisor of the Agreement” but not ANI's assets. POB's specific obligation was to make contributions to the Supervisor Subaccount of the Trust Fund, under the terms of Sections 3.14.(i)(iv)(1) of the General Part and 4.5(e) of the Special Part.545
658. In this regard, and considering that POB's obligation to pay was on the Trust Fund and not on ANI's assets, the Claimants conclude that the Respondent does not have standing to claim these amounts546.
543 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 412-414. ↩
544 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 420-421. ↩
545 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 423-425. ↩
546 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 427-429. ↩
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659. Third, POB alleges that ANI seeks to benefit from its own fault or willful misconduct, since the claim would be based on its own contractual breaches in relation to the structuring of the Project and the resolution of the EER. These breaches allegedly caused the value of the funding foreseen in the Agreement to be disproportionate and detrimental to POB. POB's works that ANI's non-compliance allow it to perform as of September 2018 lead to the Supervisor's work being so reduced that it has no justification to maintain the funding foreseen for such sub-account in the Construction Phase.547
660. In the Rejoinder to the Counterclaim, the Claimants argue that, based on the documents produced by ANI in the Arbitration, there was no technical justification for not reducing the funding of the Supervisor Subaccount. On the contrary, and based on Exhibit CER-008: JS Held's Funding Expert Opinion, they argue that ANI should have made a reduction of 64 to 69% of the value of such funding. This would coincide with POB's argument that the value of the funding should be that of the O&M Stage (approximately 66% reduction compared to the value of such funding in the Construction Phase).548
661. Fourth, the Claimants allege that the damages claimed by ANI are incorrectly assessed, due to two reasons.
662. First, ANI uses the wrong rate to calculate the late payment interest. POB points out that ANI relies on Section 3.6(a) of the General Part of the Agreement to argue that the default interest applicable in this case should be calculated at a rate of DTF + 10 percentage points. According to POB, this rate is not applicable, since it refers to the payments due by the Parties, but not to the obligation to make the contributions to the Supervisor Subaccount, which should be governed by the rules of the mercantile trust.549 POB adds that, to the extent that default interest constitutes a penalty for non-compliance, a broad or
547 Statement of Defense to the Counterclaim, ¶¶ 430-432. ↩
548 POB and S&B Rejoinder on the Counterclaim, ¶¶ 111-113. ↩
549 POB and S&B statement of Defense to the Counterclaim, ¶¶ 436-440. ↩
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extensive interpretation of the rules that provide for default interest cannot be admitted.550 In fact, according to the Agreement, the yields of the Supervisor Subaccount are intended for the Trust Fund Minor Works Subaccount.551
663. Second, because ANI calculates interest on interest, which would be contrary to the applicable law and the provisions of Article 886 of the Code of Commerce.552
664. The Arbitral Tribunal notes that ANI's counterclaim is the counterpart of POB's claim regarding the losses derived from the non-reduction of the funding amounts of the Supervisor Subaccount.
665. In this regard, and as already analyzed and resolved in Section IV.B.3 of this Award, the Tribunal considers that it was logical and reasonable that the amounts of the funds of this sub-account were reduced, according to the needs of the Project, the impossibility to carry out Interventions in UFs 4 and 5; the reduction of the monthly amounts of the Supervisor's Contract in the Construction Phase, and additionally, that such facts are attributable to ANI and not to POB.
666. Consequently, the Arbitral Tribunal considers that this counterclaim should be rejected, declaring that POB does not have the contractual obligation to make larger contributions to the Supervisor Subaccount than those already made.
550 POB and S&B Statement of Defense to the Counterclaim, ¶ 441. ↩
551 POB and S&B Statement of Defense to the Counterclaim, ¶ 442. ↩
552 POB and S&B Statement of Defense to the Counterclaim, ¶¶ 444-447. ↩
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667. In the previous sections the Arbitral Tribunal concluded that while ANI breached its contractual obligations, POB, on the other hand, complied with its own.
668. However, as POB points out, ANI's failure to comply led to the impossibility of carrying out the Interventions in UFs 4 and 5. Considering the above, POB requests the Arbitral Tribunal to declare that the Concessionaire is not obliged to carry out the Interventions in UFs 4 and 5, while the rest of the Agreement remains in force. Furthermore, ANI requests that the Arbitral Tribunal declare the Early Termination of the Agreement in accordance with the provisions of Section 14.1(e) thereof.
669. The decision on the Parties' breaches impacts the Parties' claim and counterclaim, since the Arbitral Tribunal considers that the Agreement cannot continue in a separated form. Therefore, it grants ANI's claim for Early Termination, but due to ANI's own breaches, as analyzed below.
670. The Claimants state that ANI's contractual and legal breaches regarding its duty to plan and structure the Project, as well as the repudiation of the EER Minutes activities of UFs 4 and 5 led to the impossibility of performing the Interventions in said UFs. They point out that such impossibility to perform the Interventions in UFs 4 and 5 entitle the Claimants to the damages requested in this Arbitration.553
671. In this regard, the Claimants request that the Arbitral Tribunal in their Statement of Claim declare that (i) POB is not obliged to carry out the Interventions in UFs 4 and 5
553 POB Statement of Claim, ¶ 335. ↩
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relating to the Construction Phase (which would imply stating that POB is only obliged to carry out the other non-construction activities), and (ii) the Concessionaire's obligations during the Construction Phase of the Concession Agreement are exhausted and understood to be completed with the execution of the Completion Minutes of Functional Units 1, 2 and 3.554
672. The Claimants support these claims, invoking the reasons why according to them ANI's claim for Early Termination of the Agreement is ill-founded, and therefore the Arbitral Tribunal will address both claims together.
673. In any event, POB has clarified that, contrary to the Respondent's statement, POB does not seek to be "release" UFs 4 and 5, but rather, it seeks a declaration that the Concessionaire is not obliged to carry out the Interventions in such UFs, as a consequence of ANI's breaches, as requested in the Statement of Claim.
674. ANI opposes the Claimants' request to “release” UFs 4 and 5, stating that POB is not obliged to perform them. It points out that such release “is unfeasible in the Colombian legal system and contravenes the principles of state procurement".555 ANI highlights the importance of UFs 4 and 5 for the nature of the subject matter of the Agreement, given that they have a greater scope and influence in relation to the physical scope of the Project and the agreed Retribution scheme.556
675. The entity points out that releasing UFs 4 and 5 from the Project would breach the principles of state procurement contained in the Political Constitution, Law 80 of 1993 and, specifically, it would be detrimental to the equality and objective selection of bidders.557
554 POB Statement of Claim, ¶¶ 575 (ii) and 575(iii). ↩
555 ANI Statement of Defense, ¶ 85. ↩
556 ANI Statement of Defense, ¶ 86. ↩
557 ANI Statement of Defense, ¶ 96. ↩
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676. The Respondent insists that the obligations of the Construction Phase are result obligations, and therefore the Concessionaire obligations cannot be fulfilled merely by completing UFs 1, 2 and 3, given that the Project would become a completely different one, thus violating the "principles of equality and objective selection, inherent to state contracting".558
677. As explained in detail above, ANI denies that Activity 1 regarding the EER Minutes is concluded.
678. However, ANI notes that, in the alternative, and in the event that the Arbitral Tribunal considers that Activity 1 is effectively concluded, and in the event that POB's claims of non-compliance regarding its obligations to exceed the EER in UFs 4 and 5 are rejected, ANI requests that the Arbitral Tribunal declare the Early Termination of the Agreement pursuant to Section 14.1(e) thereof.559
679. ANI states that the possibility of early termination of the Agreement is provided for in Section 14.1(e) of the Agreement.560 ANI indicates that, given that 730 days have passed since the original deadline for the completion of the affected Functional Units, without overcoming the EER -not being, likewise, feasible to perform Activity 2, because changing the original layout would modify the purpose of the Agreement, which is prohibited by the jurisprudence of the Constitutional Court and the Council of State- it would be appropriate to proceed with the Early Termination of the Concession Agreement.561
558 ANI Statement of Defense, ¶ 99. ↩
559 Statement of Counterclaim, pp. 27-31. ↩
560 ANI Statement of Defense, ¶ 331. ↩
561 ANI Statement of Defense, ¶ 20 (ix) - Exhibit 8.1.1.1, ↩
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680. Thus, ANI's request for termination is presented as an alternative in the event that ANI's claims regarding POB's breaches in managing of the EER of Functional Units 4 and 5 are not resolved in its favor, and it would be based on the impossibility of making adjustments to the scope of the Agreement that alter its original subject matter, referencing Section 14.1(e) of Concession Agreement 002 of 2014.562
681. According to ANI, Activity 1 of the EER Minutes, which involves the preparation and presentation of mitigation measures and works before the environmental authorities, has not concluded, as these authorities have not rejected the possibility of continuing the Project according to the original layout, so in its view there would still be the option of maintaining the Project in its original layout if acceptable Mitigation Measures are found, in collaboration with the environmental, governmental and control authorities, as has occurred in other similar projects.563
682. ANI informs that on 16 June 2021, it was decided that the Regional Environmental Authorities would hold a working group with the National Environmental Licensing Authority (ANLA), in which ANLA presented legal and technical support to authorize similar interventions. As a result, the need to present environmental management measures to allow the feasibility of the interventions in the riparian buffer zones of the springs in UFs 4 and 5 was determined.
683. In this context, ANI requested that POB prepare and submit such management measures to the competent entities to make the original layout feasible. However, according to ANI, POB has not definitively responded to this request, which has prevented it from obtaining the necessary environmental permits to perform the interventions in UFs 4 and 5 in accordance with the scope agreed in the Agreement. In summary, ANI argues that Activity 1 of the EER Minutes has not yet been completed due to the lack of submission of the environmental alternatives required by POB.564
562 ANI Statement of Defense, ¶ 330-331. ↩
563 ANI Statement of Defense, ¶¶ 332-333. ↩
564 ANI Statement of Defense, ¶¶ 334-336. ↩
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684. ANI presents communications from the competent Environmental Authorities, CAR and Corporinoquía, which have been received by the Entity. These communications allegedly contain relevant pronouncements on the environmental process related to the interventions in UFs 4 and 5, and do not indicate an explicit rejection of the mitigation measures presented by the Concessionaire.565
685. On the part of Corporinoquía, observations were submitted, but there is no information on whether the Concessionaire addressed or resolved them. As for the CAR, there is no evidence of a final pronouncement confirming the rejection of the Mitigation Measures as stated by the Concessionaire.
686. In spite of this, ANI denies POB's position that it has undertaken all the necessary steps to mitigate the environmental impacts on the original layout of the Project and that Activity 2 described in the EER Minutes for UFs 4 and 5 should proceed, which would entail modifying the layout of the road and the scope of the Agreement.566
687. For ANI, POB's position is inadmissible, since even if it were considered that Activity 1 of the EER Minutes for UFs 4 and 5 was concluded, Activity 2, related to the execution of an amendment modifying the Agreement, has not been evaluated or deemed appropriate by the Entity. Moreover, ANI considers that executing the Amendment is not mandatory and is neither factually nor legally feasible, since it could distort the Agreement and would not guarantee that the situation leading to the declaration of the EER will not repeat itself.
688. For ANI, its only obligation is to comply with the contractual subject matter within the framework regulated by law and the Agreement, therefore, given the impossibility of overcoming the EER in UFs 4 and 5 in the 730 days established in the Agreement, it is appropriate to apply the
565 ANI Statement of Defense, ¶ 337. - Exhibit 8.1.34.15, Exhibit 8.1.34.16, Exhibit 8.1.34.17, Exhibit 8.1.34.18, Exhibit 8.1.34.19, Exhibit 8.1.34.20, Exhibit 8.1.34.21. ↩
566 ANI Statement of Defense, ¶ 338-339. ↩
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Early Termination of the Agreement as set forth in Section (e) of Article 14.1 of the Agreement.567
689. ANI affirms that its actions have always been guided by good faith in the agreement and the interest in performing the Agreement with its original scope and purpose.568
690. One sign of good faith is that the Parties began to explore alternatives for the performance of the Project, including the possibility of an alternative layout to the original one proposed by POB. ANI cites the negotiations that took place around 10 October 2019, aimed at developing studies and designs to find a new layout for UFs 4 and 5.
691. Upon receipt of the proposed Amendment, ANI requested a concept to the Supervisor of the Project. The concept, issued in a communication dated 18 November 2019, concluded that POB's proposal did not comply with the legal and contractual requirements established for the Project.569
692. Thus, the Claimants' assertion regarding ANI's alleged refusal to execute the Studies and Designs Amendment is not accurate, as it is necessary to clarify the following:570
i) Activity 1 of the EER Minutes has not yet been concluded.
ii) The execution of an amended document by ANI, as a public entity, involves various internal and external processes, which have not been completed to date.
iii) Negotiations prior to the execution of an Amendment are not binding.
567 ANI Statement of Defense, ¶ 340-342 ↩
568 ANI Statement of Defense, ¶ 343. ↩
569 ANI Statement of Defense, ¶¶ 344-346. ↩
570 ANI Statement of Defense, ¶ 347. ↩
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iv) The modification of a State Agreement must respect established legal and case law limits.
693. Finally, it stresses that, although discussions were held on the proposed Amendment submitted by the Claimants, not all the legal, contractual and procedural requirements necessary to carry out a contractual modification of such magnitude have been complied with. Therefore, it is not accurate to state that the only outstanding issue with respect to the proposed Amendment was its signature.571
694. The Claimants assert that Colombian law does not allow ANI to request Early Termination of the Agreement in this case, because: (i) the objective and time requirements established therein are not met; (ii) ANI cannot terminate the Agreement without compensating the Claimants for the damages caused, (iii) ANI has acted in bad faith, and (iv) Early Termination would illegally limit ANI's liability.572
695. ANI announced its intention to seek Early Termination of the Agreement based on Section 14.1(e) of the Concession Agreement. This claim is raised as an alternative in the event that Activity 1 is not considered completed, or if it is assumed that Activity 2 is completed, and if it is established that ANI's efforts under “Compromiso Colombia” do not comply with Section 14.2(vi).573
696. The Claimants argue that this claim must be rejected for two main reasons: first, because the conditions established by ANI for its own claim are not met, specifically for the failure to complete Activity 2 as set forth in the EER Minutes;574 second, because Section 14.1(e)575 of the Agreement has cumulative conditions that in this case
571 ANI Statement of Defense, ¶¶ 348-349. ↩
572 POB and S&B Statement of Claim, ¶¶ 27-28. ↩
573 POB and S&B Statement of Claim, ¶ 381. ↩
574 POB and S&B Statement of Claim, ¶ 383. ↩
575 POB and S&B Statement of Claim, ¶ 384; Exhibit C-001: Contract, General Part, Article 14.1(e). ↩
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are not met, i.e., the time elapsed since the expiration of the original deadline, the need for a good faith review between the Parties on the modification of the Interventions, and that subsequent to such good faith review, the Parties determine that it is not feasible to modify the Interventions.576
697. As to the first cumulative condition set forth in the Agreement, the Claimants argue that ANI's position should be rejected because the negotiations in question were not covered by Section 14.1(e) of the Concession Agreement nor by Activity 2 of the EER Minutes, but by Section 14.2(d)(vi) of the Agreement and Activity 2. They also point out that these negotiations took place before the 730 days stipulated by Section 14.1(e) had expired.577
698. In particular, the Claimants are emphatic in pointing out that:578
It should be noted that these negotiations were carried out well before the 730 days referred to in Section 14.1(e). Indeed, the negotiations carried out by the Parties took place between January and October 2019, well before the 730 days regulated in Section 14.1(e) -which, as seen, ended on 16 January 2021 or at least on 15 December 2020.
699. For the Claimants, accepting the contrary would constitute an incorrect interpretation of the order of the factors agreed upon by the Parties in the Agreement, and would go against the Colombian legal system, by granting ANI an excessive power to request the Early Termination without fulfilling its contractual obligations and assuming that the Parties can negotiate a review of the Agreement before the 730-day term expires.579
576 POB and S&B Statement of Claim, ¶¶ 383-386. ↩
577 POB and S&B Statement of Claim, ¶¶ 387-391. ↩
578 POB and S&B Statement of Claim, ¶ 388. ↩
579 POB and S&B Statement of Claim, ¶ 390 and Exhibit CL-101: Supreme Court of Justice, Civil Cassation Chamber, judgment of 30 August 2011. ↩
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700. The second cumulative condition for Early Termination is not met either, as the Parties did not determine that it is unfeasible to review the scope of the Interventions, including the possibility of releasing UFs 4 and 5.
701. The Claimants argue that ANI engages in an inaccurate characterization of reality by arguing that Activity 2 was completed without reaching an agreement to overcome the EER of UFs 4 and 5, which would entitle it to seek Early Termination under Section 14.1(e) of the Agreement.
702. They point out that ANI's interpretation is incorrect because it ignores the objective scope of the negotiations and determinations regulated in Section 14.1(e) of the Agreement, which provides that Early Termination can only be requested when, after reviewing in good faith the scope of the Agreement, it is not possible to modify the scope of the Interventions.580
703. They add that, during the Tender, S&B raised an observation stating that the Concessionaire could request Early Termination when it considered that it was not feasible to modify the scope of the Interventions. ANI responded that this was not correct and that the Parties should reach an agreement on the impossibility of modifying the scope of the works after a thorough and good faith review.
704. However, the Claimants assert that these negotiations did not take place in the present case, as ANI repudiated the terms of the EER Minutes and did not allow the Parties to carry out the necessary steps to evaluate the possibility of modifying the scope of the Interventions in UFs 4 and 5. They also assert that the negotiations of Activity 2 of the EER Minutes were not aimed at determining whether it was
580 POB and S&B Statement of Claim, ¶ 392-395. ↩
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possible to modify the scope of the Interventions within the meaning of Section 14.1(e) of the Agreement, thus, that requirement was not complied with.581
705. In support of the foregoing, the Claimants state that during negotiations between January and October 2019, the Parties actively discussed the mechanism to handle a situation in which, after completing the studies and designs stipulated in the Studies and Designs Amendment, it would not be possible to carry out the Interventions in UFs 4 and 5 due to circumstances such as an adverse decision by the Environmental Authorities, financial problems or the lack of agreement between the Parties to modify UFs 4 and 5 within a predetermined timeframe.582
706. In that context:
a. The Concessionaire proposed to establish a 2-month period for the Parties to negotiate in good faith the contractual modifications necessary to remove UFs 4 and 5 from the Project. ANI, for its part, suggested that reference be made to Section 14.1(e) as a regulation in this scenario.
b. After consulting with its shareholders, the Concessionaire agreed to continue the negotiations of the Amendment with the text proposed by ANI, provided that it was clear that, if it were not possible to perform UFs 4 and 5 due to the conditions previously mentioned, both Parties would commit to make their best efforts in good faith to release UFs 4 and 5 from the Project, ensuring the economic equilibrium of the Agreement for both Parties.
c. Although ANI did not respond directly to this communication from the Concessionaire, the terms of the Studies and Designs Amendment agreed by both parties include wording on this point, in its Tenth Clause.
d. The Tenth Clause of the Studies and Designs Amendment would apply specifically after concluding the steps set forth in such Amendment, which are
581 POB and S&B Statement of Claim, ¶¶ 396-399. ↩
582 POB and S&B Statement of Claim, ¶ 401. ↩
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related to the determination of a new possible layout for UFs 4 and 5. This layout would be submitted to ANLA for approval (condition i), and based on this layout, the Parties would analyze the financial aspects (condition ii) and then negotiate the necessary contractual modifications to resume the fulfillment of UFs 4 and 5 (condition iii).
e. It is therefore clear that the Parties foresaw this situation. However, due to ANI's repudiation of the Agreement and the EER Minutes, these studies and designs cannot be carried out, which in turn prevents the configuration of the scenario foreseen in Section 14.1(e) and, therefore, the application of this Section in the context of the EER of UFs 4 and 5.
707. Finally, the Claimants highlight that ANI itself admits that there is a scenario in which it could be feasible to execute the Studies and Designs Amendment: if in the framework of “Compromiso Colombia” it is determined that the presence of springs prevents the performance of the Interventions in UFs 4 and 5.583
708. As regards the last cumulative condition, this is also not met in the opinion of the Claimants, since ANI allegedly did not act in good faith.584
709. The reference to good faith in Section 14.1(e) of the Agreement establishes how negotiations between the Parties must be conducted as a prior step to having the right to request Early Termination of the Agreement. If negotiations are not conducted in good faith, the condition set forth in this Section is not met and therefore the legal consequence provided for herein cannot be applied.
710. In this regard, the Claimants assert that ANI's actions depart from good faith as evidenced especially by the following:
(i) ANI did not even analyze the feasibility of the Studies and Designs Draft Amendment that was the subject of negotiations between the Parties for
583 POB and S&B Statement of Claim, ¶ 402. ↩
584 POB and S&B Statement of Claim, ¶¶ 404-408. ↩
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approximately 10 months. This, despite having informed POB that it would submit said draft Amendment for review by its internal divisions.
(ii) ANI made unilateral decisions departing from what the Parties agreed, without consulting or informing POB.
(iii) At the same time, ANI undertook a series of actions to threaten POB's contractual rights shortly after receiving the Notice of Arbitration.
(iv) After two years and allegedly without evaluating the feasibility of the Studies and Designs Amendment, it has suggested that the feasible solution to overcome the EER is to change the environmental regulations, something that was never discussed with POB, or to wait for the decisions of a forum in which POB does not participate (“Compromiso Colombia"). This change in ANI's position in relation to the negotiations with POB constitutes a violation of good faith that should govern contractual relations between private parties and state entities.
(v) Finally, it takes advantage of POB's efforts to negotiate, based on the premise of acting in good faith to overcome the EER of UFs 4 and 5, as arguments to support the request for Early Termination of the Agreement.
711. In summary, the Claimants conclude that ANI has failed to meet the temporal and objective conditions for the Early Termination of the Agreement, while apparently seeking to avoid its contractual liability, by seeking to terminate the Agreement under Section 14.1(e) to limit the payments it must make under Section 18.3 of the Concession Agreement.
712. Furthermore, the Claimants point out that by virtue of the additional results derived from the execution of the Studies and Designs Amendment, the Parties agreed to analyze the possibility of entering into a contractual amendment to the Concession Agreement to alter the layout of UFs 4 and 5, regulating the consequent contractual amendments, or to take the decision to exclude UFs 4 and 5 from the Project pursuant to Section 14.1(e) of the Agreement, which was simply not complied with.
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713. Indeed, the purpose of the Studies and Designs Amendment was not intended to assess the feasibility of modifying the Interventions, nor to exclude UFs 4 and 5. Instead, it sought to carry out additional actions that would allow the Parties to make informed decisions regarding UFs 4 and 5. Accordingly, it is not accurate to assert that the Parties sought to apply Section 14.1(e). Rather, the objective was to provide the Parties with objective information to make appropriate and well-informed decisions in accordance with Section 14.2(d)(vi) and the EER Minutes. This was intended to solve the effects arising from ANI's breaches of its planning obligations.585
714. As noted above, Section 14.1(e) provides that before requesting early termination, the Parties must make a mutual and informed determination that it is not possible to modify the planned Interventions, including the release of UFs 4 and 5. This decision must be based on a negotiation process in which the Parties reach an agreement, which, according to the Claimants, did not occur.
715. The discussion between the Parties focuses on the provisions of Section 14.1.e of the Concession Agreement which regulates the termination of the Agreement in the case of an EER. This provision states:
If the new amended Works Plan referred to in Section 14.1(d) above expires, or if seven hundred and thirty (730) Days elapse from the expiration of the term originally foreseen for the completion of the affected Functional Unit -whichever occurs first- without the completion of the corresponding Interventions, the payment of the Special Compensation corresponding to such Unit shall be suspended until the Completion Minutes of the Functional Unit has been executed. If the reason for non-completion is an Exemption of Liability Event or if it is attributable to ANI, the Parties in good faith shall review the scope of the Agreement to determine if it is feasible to modify the scope of the
585 POB and S&B Statement of Claim, ¶ 323. ↩
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Interventions, including the possibility of modifying or releasing the respective Functional Unit -prior recalculation of the Retribution that reflects the modifications made, recalculation that shall be made by mutual agreement of the Parties or by the Amiable Compositeur. If it is not feasible to modify the scope of the Interventions, either Party may request the Early Termination of the Agreement.
716. The Claimants' main arguments to oppose the Early Termination requested by ANI are the following:586
(i) 730 days did not elapse after the expiration of the deadline for the delivery of UFs 4 and 5 before the Parties carried out negotiations under Activity 2;
(ii) The Parties did not determine that it is unfeasible to modify the Interventions or release UFs 4 and 5 of the Concession Agreement; and
(iii) ANI has not acted in good faith.
717. The Arbitral Tribunal will analyze each of them separately.
718. First, the Claimants point out that the negotiations between the Parties were covered by Section 14.2(d)vi of the Agreement and by Activity 2 of the EER Minutes, and not by Section 14.1(e) of the Agreement. Accordingly, the negotiations would have taken place well before the 730 days established in Section 14.1(e) of the Agreement.587
719. In this regard, ANI states that UFs 4 and 5 had a termination date of 15 December 2018, or, alternatively, 16 January 2019. The 730 days from those dates elapsed on 15 December 2020 or 16 January 2021. In turn, the Claimants
586 POB and S&B Statement of Claim, ¶ 385. ↩
587 POB and S&B Statement of Claim, ¶ 388. ↩
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estimate that negotiations between the Parties took place between January and October 2019, well before these dates elapsed.588
720. As noted above, the period of Activity 2 was set at 2 months, extendable twice, i.e., a total of 6 months. The Parties extended Activity 2 from at least January to October 2019. Even if the formal start date of Activity 2 were to be taken as 11 October 2019, the date of dispatch of the POB Addendum, the 6 months from that date would end on 11 April 2020. This date is prior to the date on which 730 days had passed since UFs 4 and 5 should have been completed.
721. However, Section 14.1(e) of the Agreement does not establish a term-start relationship between the expiration of the 730-day period and the commencement of bona fide negotiations. The quoted Section also admits the interpretation that, in the event of failure to complete the Interventions within 730 days from the expiration of the originally scheduled deadline for the completion of the affected Functional Unit, due to an EER, the Parties -rather that remaining inactive while awaiting for such days to elapse- must in good faith review the scope of the Agreement to determine whether it is feasible to modify the scope of the Interventions.
722. This interpretation of Section 14.1(e) of the Agreement is aligned with the principle of contractual good faith. Thus, it would have been contrary to good faith if one of the Parties refused to start negotiations in advance of the expiration of the 730-day period, invoking that it must elapse first, before negotiations started.
723. The particular circumstances of the EER were perfectly known to both Parties. In particular, it is the Claimants' understanding that Activity 1 was terminated, i.e., that there were no authorizations from the competent authorities. As a result, the Agreement could not be performed under the agreed conditions, making it necessary to review its scope or the scope of the Interventions. Thus, initiating
588 POB and S&B Statement of Claim, ¶ 388. ↩
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such negotiations without waiting for the passage of 730 days from the original term of UFs 4 and 5 would have been consistent with its understanding and the contractual principle of good faith.
724. Indeed, the Claimants assert that 10 months of negotiations had elapsed by October 2019, at which point they were in a position to submit a formal proposal for the Amendment, thereby shifting the opportunity to respond to ANI. Thus, in the Claimants' own understanding, the process of reviewing the scope of the Agreement was a lengthy process that, in this particular case, required technical studies by a third party. The duration and complexity of that process only confirm that it was not necessarily reasonable to wait for the 730 days to elapse before commencing negotiations between the Parties.
725. In turn, in the Arbitral Tribunal's opinion, it does not seem fruitful to expect that, once the round of negotiations contemplated under Section 14.2(d)vi of the Agreement, established as Activity 2 of the EER Minutes, had concluded, the Parties would have then to initiate another round of negotiations under Section 14.1(e) of the Agreement, with the same object and purpose.
726. Furthermore, according to the explicit wording of Section 14.1(e) of the Agreement, the passage of 730 days, without the affected UFs having been completed, directly affects the suspension of the payment of the Special Compensation, but not the initiation of negotiations. With respect to the initiation of the review of the scope of the Agreement, the literal wording of Section 14.1(e) is broader and does not condition the initiation of the review to the prior lapse of 730 days.
727. For the foregoing reasons, the Arbitral Tribunal is not persuaded by the Claimants' first objection.
728. Second, the Claimants argue that the Parties have not determined that it is impracticable to modify the Interventions or release UFs 4 and 5. In this regard, the Arbitral Tribunal considers that the Section under analysis does not require an express statement by the Parties to that effect. Thus, there is no requirement that the
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Parties, at the end of the review and negotiations, issue a joint statement indicating that it was not possible to reach a modification agreement.
729. In addition, Section 14.1(e) does not establish the duration of the negotiations. In other words, the Parties did not foresee a specific time period for such negotiations, which is in keeping with the very nature of negotiations of this nature.
730. Likewise, Section 14.2(d)vi does not establish the duration of the negotiations. In the EER Minutes, the Parties assigned to the negotiation in the context of Activity 2 a maximum period of 6 months. Conservatively, this period could be calculated from the submission of the proposed Amendment by POB, dated 11 October 2019. ANI did not respond favorably to the proposed Amendment, during that period, which extended until 10 April 2020. The 6 months is a reasonable period and was agreed upon by the Parties. However, ANI's silence, which is indeed a bad faith behavior, as will be explained below, can also be understood as a rejection of the proposed Amendment, or the rejection of the offer to modify the Agreement.
731. Indeed, the Claimants charge ANI with having repudiated Activity 2, i.e., they also understand that the execution of an Amendment negotiated in this context did not succeed. While the Claimants allude to the existence of ANI's informal commitments to sign such an agreement, such commitments will always remain informal commitments, especially in the case of a public entity, whose actions are subject to additional formalities.
732. The fact that POB's offer was not accepted by ANI indicates the latter's lack of consent to modify the scope of the Interventions, the scope of the Agreement or to exclude UFs 4 and 5. Thus, the modification of the scope of the Interventions or the scope of the Agreement was not feasible.
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733. In conclusion, the Arbitral Tribunal also considered the magnitude of the modifications proposed. In fact, it was not a question of moving the corridor of UFs 4 and 5 a few meters. Rather, the proposed Amendment contemplated a significant redesign of the Project, including the proposal to relocate the corridor “to the other side of the mountain.” It is precisely the magnitude of the modifications that suggests that, by falling to accepted the proposed Amendment within a reasonable period - or at some point in the past - ANI considered said modification unfeasible in light of the scope of the Interventions and the Agreement.
734. For the foregoing reasons, the Arbitral Tribunal is not persuaded by the Claimants' second objection either.
735. Third, the Claimants reproach the Respondent for not having acted in good faith throughout the negotiations, which was reflected in ANI's failure to analyze the feasibility of the draft Amendment that was the subject of negotiations between the Parties, taking actions to threaten POB's rights; seeking solutions within the framework of “Compromiso Colombia" of which POB does not participate; and using POB's previous negotiation efforts to support the request for Early Termination of the Agreement.
736. The Arbitral Tribunal finds that ANI's lack of an express response to the proposed Amendment is, in fact, a very uncooperative behavior that does not meet the minimum standards of good faith required in the negotiations that the Parties should have had.
737. Notwithstanding, ANI's bad faith actions, in the opinion of this Arbitral Tribunal, does not preclude the possibility of declaring the Early Termination of the Agreement under the terms of clause 14.1(e) of the Concession Agreement. Indeed, the exercise of the right to request the Early Termination of the Agreement does not constitute a breach of good faith by itself, insofar as it is a power established in the Concession Agreement, and to the extent that the requirements are met, it is possible to proceed with the declaration of Early Termination under this ground, which will be corroborated by the Arbitral Tribunal below.
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738. Thus, the Arbitral Tribunal is not persuaded by the Claimants' third objection either, because, although ANI did not act in good faith, this Tribunal also considers that the elements required to declared Early Termination according to clause 14.1(e) of the Agreement are met. ANI's lack of good faith is not an obstacle for such declaration, as we shall see.
739. Fourth, the Claimants' objections having been dismissed, the Arbitral Tribunal will conduct a further analysis of the grounds in Section 14.1(e).
740. In order to request Early Termination of the Agreement under Section 14.1(e) hereof, the following requirements must be met: 730 days must have elapsed since the deadline provided for the completion of UFs 4 and 5; ii) this must have occurred due to an EER or “a cause attributable to ANI”; iii) Having carried out a review of the scope of the Agreement in good faith, the Parties must determine whether it is possible to modify the scope of the Interventions (including the possibility of modifying or excluding the respective UF); iv) If it is not possible to modify the scope of the Interventions, either Party may request the Early Termination of the Agreement.
741. The fulfillment of requirement (i) is evident and self-explanatory, since it is not being disputed by the Parties that UFs 4 and 5 are unfinished as of today, at the end of 2024, even though their completion dates were foreseen for the end of 2018 - beginning of 2019.
742. With respect to requirement ii), it is important to highlight that the Early Termination of the Agreement is applicable both in the event that the impossibility was generated as a result of an EER or due to causes attributable to ANI. This Arbitral Tribunal ruled that ANI had failed to comply with its obligations at the time of structuring the Project and the Tender Public. At the same time, the Parties qualified the presence of the springs as an EER. In other words, the presence of the springs constituted both, a breach attributable to ANI and, an EER, according to the Parties' own qualification. In view of this double qualification of the phenomenon, the two criteria for the Early Termination of the Agreement are meet, namely, whether the non-completion would have been caused by the
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presence of the springs as an EER, or as a breach by ANI.
743. With respect to requirement iii), the Arbitral Tribunal notes that, although ANI breached its obligation to act in good faith in the negotiation, the factual assumptions to give rise to Early Termination are also met. In fact, the very grounds of Section 14.1 address situations of impossibility to continue with the performance of the Concession Agreement due to a cause attributable to ANI, as is the bad faith and lack of cooperation in responding to the Amendment submitted by the Claimants, or in participating in any other way in a negotiation based on such submission.
744. In any event, the Tribunal considers that ANI was not under any obligation to consent or authorize the terms of the Amendment submitted by the Claimants. In the opinion of the Arbitral Tribunal, the breach did not occur because an agreement on this point had not been reached, but because any action that would really correspond to ANI's obligation to negotiate in good faith with the Claimants a solution for Activity 2 had not been demonstrated.
745. The Arbitral Tribunal notes that the Claimants' proposal in their Amendment contained proposals for Interventions that could not have been accepted by ANI purely and simply for the purpose of modifying the layout, as we will detailed below.
746. Indeed, Section 14.1(e) of the Agreement refers to “scope” with a lowercase letter. That is, it is not a defined term in the Agreement. However, Technical Appendix 1 of the Agreement is entitled “Project Scope." In turn, “Intervention" is a defined term in the Agreement in Section 1.87, as: “It will have the scope established in Technical Appendix 1."
747. In other words, any modification to what is outline in Technical Appendix 1 would also mean a modification of the Interventions or the scope of the Agreement. Section 2.1 of Technical Appendix 1 provides a description of the route and its
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location, as well as details of the technical characteristics for UFs 4 and 5.589 Thus, by proposing its modification through the Amendment, the modification of the Interventions was proposed.
748. In this context, it is relevant to bear in mind that the Amendment proposed by POB did not, through its mere acceptance, generate a new layout for UFs 4 and 5. On the contrary, the proposed Amendment established, mainly, that the Concessionaire would have a maximum term of 14 months to submit to ANI the following studies (first clause):590
a. Engineering Studies and Designs on the alternative route proposed to connect the municipality of La Calera with the Bogotá-Villavicencio road and the connection of the latter with Functional Unit 3, Subsector 2. The above studies shall contain at least the provisions of Annex A of this Amendment (the “Engineering Studies and Designs”). As identified in Annex A, the preparation of the Engineering Studies and Designs will be divided into two stages, namely: (i) determination by the Concessionaire of the best possible corridor alternative (“Stage 1") and (ii) further studies on the selected corridor (“Stage 2”).
b. Complementary studies (traffic study, financial budgets and the proposal for new agreement conditions) in relation to the alternative layout for Functional Units 4 and 5, studies that will contain at least what is indicated in Annex B of this Amendment (the "Complementary Studies”).
749. As ANI has correctly argued throughout this process, the mere execution of the Amendment, by itself, do not render the Interventions feasible.
750. Notwithstanding the foregoing, the obligation to negotiate in good faith in the context of Activity 2 required ANI to provide a timely response the Claimants Amendment proposal, or promptly propose other possible ways for progress or solution, and ANI failed to take any action in this regard and for more than 8
589 Exhibit C-008. ↩
590 Exhibit C-119. ↩
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months remained silent, which constitutes a reprehensible conduct that, added to the breach of its obligation to detect the springs, is what made it unfeasible to carry out UFs 4 and 5.
751. On the other hand, the Arbitral Tribunal, and for the reasons already stated for which the Early Termination will be accepted, considers that it is legally unfeasible to declare that POB is not obliged to carry out the Interventions in UFs 4 and 5, and at the same time order it to continue carrying out other operations (such as maintenance) ad eternum. The Tribunal considers that this would not be a solution that would allow the Parties to continue with the proper performance of the Agreement. Indeed, to the extent that the Interventions cannot be carried out without initiating a tender, the concession relating to UFs 4 and 5 has become unfeasible.
752. This is further corroborated by the fact that both Parties confirm that the Arbitral Tribunal could not declare the partial termination of the Agreement, nor is this what either of them has requested.591
753. For the foregoing reasons, the Arbitral Tribunal will grant ANI's request for Early Termination, rejecting the Claimants' claims that request the Arbitral Tribunal to declare that (i) POB is not obliged to perform the Interventions in UFs 4 and 5 related to the Construction Stage (which would imply stating that POB is only obliged to perform the other non-construction activities, such as, for example, the O&M activities), and that (ii) POB is not obliged to perform the construction activities in UFs 4 and 5 related to the Construction Stage (which would imply stating that POB is only obliged to perform the other non-construction activities, such as, for example, the O&M activities), (ii) the obligations of the Concessionaire during the Construction Phase of the Concession Agreement are exhausted and understood to be completed with the execution of the Completion Minutes of the Functional Unit of UFs 1, 2 and 3.592
Now, it is important to highlight that the Arbitral Tribunal will accept the claim for Early Termination of the Concession Agreement under Clause 14.1(e) of the Concession Agreement, but on the basis of a cause attributable to ANI.
591 Claimants' Post-Hearing Memorial, ¶ 446; Claimants' Post-Hearing Memorial, ¶¶ 382-387. ↩
592 POB Statement of Claim, 575 (ii) and 575(iii). ↩
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The reason why the Parties could not advance in the negotiations to be developed during Activity 2 is due to ANI's own bad faith on this point.
754. Therefore, although the subsidiary claim for Early Termination filed by ANI is accepted, and the termination of the Agreement is declared, the ground is fulfilled since it was ANI's conduct that implied that the 730 days elapsed without reaching agreements to overcome the EER.
755. Thus, due to ANI's non-compliance, the Early Termination of the entire Agreement is declared, for the reason set forth in clause 14.1(e), declaring that the Agreement concluded as of the date of notification of this Award.
756. On this point, an arbitration award, submitted by the Claimants addresses a similar situation in which (i) the claimant's (concessionaire's) claim that its obligation is or has become impossible to perform was upheld, but at the same time (ii) it was determined that the impossibility to perform arose form its own fault, and therefore its contractual liability derived from its breaches is left untouched. In this sense, the Tribunal's decision to accept the claim for early termination of the Agreement, but due to the fault of ANI itself, is consistent with this principle and falls within the language of Section 14.1(e) so that it also engenders its contractual liability, in this case towards POB as Concessionaire.593
593 Exhibit 8.1.16.25 (ARBITRAL TRIBUNAL OF CONCESIÓN VIAL DE LOS LLANOS S.A.S. v. ANI, pp. 291-292. In this ruling, the Arbitral Tribunal states as follows: “Consequently, although the contractor cannot be obliged to comply due to the impossibility of performance that arises in the specific case, this does not mean that it is released from its obligation without having to bear any economic burden, since, it is reiterated, such impossibility is not unrelated to the concessionaire, but, on the contrary, it is attributable to its behavior. In effect, having evidenced the breach of its obligations as a consequence of a deficient planning of the project and its financial structuring, it is clear that the liability of the concessionaire is compromised and it must compensate the damages caused to the contracting entity, to the extent that they are evidenced with the requirements established in the legal system to be considered as compensable damages, aspects on which the Tribunal already analyzed in depth when it analyzed the claims for compensation presented in this process by ANI and dismissed them unfavorably. In the foregoing terms, the Tribunal will declare the claim to be successful, but on the understanding that it is a case of impossibility of performance, which in any case compromises the Contractor's contractual liability because it arises from an event attributable to it". ↩
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757. In view of what has been resolved in the previous Sections, i.e. that the Early Termination of the Agreement is accepted, but due to ANI's breaches, the Arbitral Tribunal must decide two fundamental questions. First, whether the Claimants are entitled to receive compensation because of ANI's breaches, and second, if so, how much compensation they are entitled to.
(i) Position of POB and S&B
759. The Claimants assert that ANI's breaches have caused them damages that should be compensated.
760. The Claimants refer to Article 90 of the Political Constitution, which establishes that the State shall be liable for unlawful damages attributable to it, caused by the action or omission of public authorities. They assert that this provision is the constitutional basis for the State's economic liability.594
761. The Claimants also refer to Article 50 of Law 80 of 1993, which reiterates the constitutional provision just transcribed.
594 POB and S&B Statement of Claim, ¶ 447. ↩
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762. As regards the obligation to compensate for damages, the Claimants argue that:595
ANI has the obligation to fully compensate the damages caused to the Claimants for the breaches previously described, including consequential damages and lost profits. This is established in Article 90 of the Political Constitution, Article 50 of Law 80 of 1993 and paragraph 3 of Article 26 of Law 80 of 1993. Furthermore, this has been reiterated on multiple times by the Constitutional Court, the Council of State and national Arbitral Tribunals [citation omitted].
763. Finally, they refer to the principles of comprehensive compensation and the mandates of the State to compensate for unlawful damages attributable to them, to maintain that “all proven damage must be compensated, regardless of the evidentiary disputes that may arise around its quantification".596
764. The Claimants point to the recent decision of the State Defense Council, according to which the non-performance of a part of the relevant contract is due to the contracting entity's failure to comply with its obligations relating to the contract planification.597
765. The Claimants also clarify that this is not a request for compensation or damages arising from an EER but rather relates to the breaches by ANI that prevented the performance of UFs 4 and 5.598
766. The Claimants consider that the Arbitral Tribunal must reject any argument raised by ANI tending to limit its liability, since in their opinion the damages suffered by the Concessionaire are a direct consequence of ANI's breaches:599
595 POB and S&B Reply, ¶ 38.iv. ↩
596 POB and S&B Statement of Claim, ¶ 455. ↩
597 POB and S&B Statement of Claim, ¶454; Exhibit CL-072. ↩
598 POB and S&B Statement of Claim, ¶¶ 486-488. ↩
599 POB and S&B Statement of Claim, ¶¶ 489-493. ↩
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a. The first breach by ANI would be its failure to provide accurate and complete information during the public tender, which contravenes legal regulations prohibiting state entities from exempting themselves from liability for such matters.
b. The above would be without prejudice to the fact that ANI has attempted to base its argument on Section 14.2 of the Agreement, invoking the concept of idle costs due to longer stay on site, in an effort to limit the damages that the Claimants can claim.
767. These breaches are not the responsibility of the Claimants and, therefore, ANI cannot exempt itself from its legal duty to reestablish the economic balance of the Agreement. This obligation to reestablish the balance is particularly relevant since ANI has breached its own contractual obligations, which has caused this balance to be broken.
768. In view of the foregoing, it is considered that ANI cannot use Section 14.2(h) of the Agreement to exempt itself from its liability for its breaches. This Section:
a. Is not applicable to the Claimants' claim.
b. The interpretation that ANI seeks to prove is contrary to mandatory rules of public order that govern its legal duties as a Contracting Entity, and therefore would have no effect.
769. Accordingly, the Claimants conclude that the damages experienced by POB are attributable to ANI because they are a direct consequence of the contractual breaches committed by the latter. Both case law and doctrine establish that, in order to attribute damages to public entities in cases of contractual breaches, it is necessary to prove (i) the existence of a contractual breach and (ii) the relationship between such breach and the damages sought.600
600 POB and S&B Statement of Claim, ¶ 497. ↩
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770. In this case, both elements are met, since ANI breached its contractual obligations, and POB suffered a decrease in assets and loss of profits as a direct consequence of such breaches. Therefore, the damages are attributable to ANI and the Tribunal should order its compensation.
771. In any case, the Claimants argue that the circumstances described regarding UFs 4 and 5 have generated an economic imbalance in the Agreement, so ANI has the obligation to make the compensations required to reestablish said economic equilibrium.601
772. The Claimants support the foregoing in a series of arguments. First, Article 27 of Law 80 of 1993 -which is applicable to PPP contracts by virtue of Article 3 of Law 1508 of 2012-, establishes that equality must be maintained between the rights and obligations arising at the time of entering into a state contract.602
773. Second, it places a limit on the autonomy of the will of the parties. Therefore, “contractors may always exercise this right as a legal mechanism to request the reestablishment of the balance of the contract".603
774. Third, as required by the State Defense Council case law, the facts in this case meet these requirements:604
a. The springs were discovered after the execution of the Agreement.
b. The existence of the springs is not attributable to the Concessionaire.
c. The existence of the springs was unforeseeable for the Concessionaire.
d. The existence of the springs causes serious harm to the Claimants.
601 POB and S&B Statement of Claim, ¶ 348. ↩
602 POB and S&B Statement of Claim, ¶ 349. ↩
603 POB and S&B Statement of Claim, ¶ 351. ↩
604 POB and S&B Statement of Claim, ¶ 353. ↩
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775. The compensation requested by the Claimants would be appropriate, since the circumstances and breach of ANI have generated an economic imbalance of the Agreement, which imposes a legal and contractual obligation on the entity to compensate. Indeed:605
(ii) ANI's position
776. Regarding the alleged damages claim by the Claimants due to ANI's alleged breach, the Respondent argues that the contractual liability requirements, which would entitle the Claimants to seek damages are not met. ANI argues that it has fully complied with all the necessary actions, acts and formalities in connection with the structuring of the Project, the activities of the EER Minutes and the regulatory duties for the fulfillment of the State's purposes.
777. To attribute liability, two aspects must be analyzed: the factual scope and the legal attribution criteria, which includes different titles of attribution such as failure to provide the service, special damage, abnormal damage and exceptional risk. Liability attribution is an essential principle in the State's liability regimes and requires factual support and legal attribution.
605 POB and S&B Statement of Claim, ¶ 355. ↩
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778. Finally, ANI argues that the Claimants have not demonstrated the existence of an unlawful damage, i.e., an injury that they should not have to bear. Consequently, ANI argues that the Claimants do not meet the necessary requirements to allege damages and that, in fact, is POB who has caused damages to ANI.606
779. ANI concludes as follows: ANI has fully complied with its obligations related to the financing of ANI Contributions on the contractually agreed dates. The resources corresponding to Functional Units 4 and 5 allocated to ANI’s Contributions are available in the Subaccounts designated for this purpose. The payment of these resources to the Concessionaire has not been made because the necessary legal and contractual requirements have not been met. These requirements include obtaining the Completion Minutes or Partial Completion Minutes of the Functional Units, as well as the availability of the infrastructure and compliance with established service levels and quality standards. Consequently, the Claimants’ claim is neither applicable not valid. The requirements for obtaining payments are not met. From a financial perspective, the economic design of the Agreement implies that the Concessionaire makes an investment in order to receive a payment in return. Hence, it would not be appropriate to make a payment or retribution for the Functional Units in which no investment has been made.607
780. ANI highlights that in paragraph four of the EER Minutes, the Concessionaire stated and accepted that it would not claim idle costs due to longer stay in site, releasing ANI from any liability in this matter.608
781. ANI also argues against the Claimants’ assertion that there was an economic imbalance in the Agreement, as follows: ANI argues that the occurrence of EER in UFs 4 and 5 affects all the Parties to the Agreement and has a releasing effect on all of them.
606 ANI Statement of Defense, ¶¶ 393-397. ↩
607 ANI Statement of Defense, ¶ 409. ↩
608 ANI Statement of Defense, ¶ 678. ↩
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This means that a breach of the economic equilibrium cannot be alleged to the exclusive detriment of one of the Parties.609
782. ANI also points out that the risk sharing scheme provided for in the Agreement establishes that POB agreed to assume the costs generated in case an EER materializes. Therefore, POB’s lack of diligence in the management of the EER does not justify the claim of economic imbalance.610
783. ANI emphasizes that economic imbalance cannot generate damages, nor does generates the recognition of profits. It argues that POB has misinterpreted the concept and seeks damages without valid grounds.611
784. ANI further emphasizes that the request for the reestablishment of the economic equilibrium filed by POB is untimely and that it has not been proven that POB’s negligence did not contribute to the imbalance.
785. In summary, ANI rejects POB’s allegations of an alleged economic imbalance of the Concession Agreement, arguing that the Exemption of Liability Event affects all Parties and that the risk sharing scheme provided for in the Agreement supports its position. It also stresses that the economic imbalance does not justify claims for damages or the recognition of profits and that the request for the reestablishment of the economic equilibrium is inadmissible.
786. In conclusion, according to ANI, the breach of contractual balance alleged by POB has not occurred, since the elements that would support this claim have not been met. Therefore, no damage or loss of profit has been generated that justifies its recognition in favor of POB. Furthermore, ANI considers that the approach taken by POB
609 ANI Statement of Defense, ¶¶ 768 et seq. ↩
610 ANI Statement of Defense, ¶¶ 788 et seq. ↩
611 ANI Statement of Defense, ¶¶ 793 et seq. ↩
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is imprecise and inappropriate, so the Tribunal should reject any claim in this regard.612
787. Ultimately, ANI argues that even if there were an imbalance in the contractual equilibrium, POB did not make any timely request to reestablish such balance. During the signing of the EER Minutes related to UFs 2, 4 and 5, POB did not present any objection or request to reestablish the contractual economic balance. This suggests its conformity with the measures adopted in those Minutes and its acknowledgement that those measures reestablish the contractual balance, in accordance with the jurisprudence of the Council of State. Therefore, any request in this sense by POB is considered extemporaneous and improper according to ANI.613
(iii) The Agreement and Applicable Law
788. The Arbitral Tribunal notes that the basis of the Claimants’ claim is based, firstly, on the fact that the damages suffered by POB are a direct consequence of the breaches attributable to ANI, which is why ANI has the obligation to compensate the damages caused as a consequence of its unlawful conduct.
789. Alternatively, the Claimants point out that, in any case, the situations relating to the impossibility of carrying out the Interventions in UFs 4 and 5 have generated an economic imbalance in the Agreement, which ANI must compensate.
790. For these purposes, the Arbitral Tribunal must take into consideration the following legal and constitutional provisions.
791. Article 90 of the Constitution of the Republic of Colombia, which establishes the following:614
612 ANI Statement of Defense, ¶ 796. ↩
613 ANI Statement of Defense, ¶ 800. ↩
614 Exhibit CL-111: Article 90, Political Constitution of Colombia. ↩
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The State shall be liable for any unlawful damages attributable to them, caused by the action or omission of public authorities. In the event that the State is sentenced to pay financial compensation for such damages, which have been the result of the willful or grossly negligent conduct of one of its agents, the State must claim against the latter.
792. Law 80 of 1993, which establishes the obligation to reestablish contractual equilibrium, if this balance is affected by causes not attributable to the affected party.615 This is established in article 50 of the aforementioned law:616
Entities shall be held accountable for any unlawful actions, abstentions, acts and omissions that are attributable to them and that cause harm to their contractors. In such cases, they must compensate for any loss in assets that may occur, any prolongation of the loss, and any profit, benefit or gain not received by the contractor.
793. The Arbitral Tribunal also takes into account the following relevant case law which differentiates both the grounds and the effects of the compensation due, on the one hand, as a consequence of the breach of the economic equilibrium of the contract, and, on the other hand, as a consequence of a breach of contract.
794. Thus, the State Defense Council has stated:617
The Third Section of this Body has accepted the theories developed by foreign doctrine regarding the sources that generates the rupture of the economic-financial equilibrium of the state contract, pointing out that this may be altered by acts and facts of the administration or by external or foreign factors to the parties involved in the contractual relationship. The former are called “fait du prince” and “potestas ius variandi” (administrative law), while the assumptions that emerge from the second source are framed within the so-called “theory of
615 POB and S&B Statement of Claim, ¶¶ 348-355. ↩
616 Exhibit CL-117: Article 50 of Law 80 of 1993. ↩
617 Exhibit CL-107. ↩
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unforeseeability” and in parallel in the “theory of foreseeability”. The foregoing allows to deduce, with absolute clarity, that contractual balance may be altered by the exercise of authority within the framework of legality or by situations unrelated to the parties, which make the performance more or less burdensome; however, such alteration does not arise from the unlawful behavior of the parties to the contract.
The breach of contract, on the other hand, has its origin in the unlawful conduct of one of the contracting parties, i.e., that a party assumes a course of action contrary to the obligations assumed when entering into the contract and, as the main effect, causes unlawful damage to the other party which, of course, is not obliged to bear it; in addition, the breach generates the obligation to fully compensate the damages caused to the performing party. [Emphasis added]
795. In this regard, the Council of State has concluded that the breach of contract by one of the parties entitles the other party to full compensation for the damage, which does not necessarily occur in all cases due to a breach of contractual economic equilibrium:618
Now, although the Claimant requested in this trial the declaration of breach of the economic equilibrium of the contract due to the facts already described, the Chamber must emphasize - as it has pointed out in previous opportunities - that, although the breach of one of the contracting parties entails the affectation of the rights of the performed party, and therefore it may be thought that the breach of contract by the administration generates a breach of the economic equilibrium of the contract (especially when paragraph 1 of article 5 of Law 80 of 1993 indicates the breach as one of the causes of such imbalance), it is equally true that the contractual non-compliance must be handled with greater propriety under the perspective of contractual liability, since we are dealing with two “...institutions different in their configuration and in their effects": thus, contractual liability arises out of the unlawful damage caused by the party in breach of the contract, which generates the duty to fully compensate the damages
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caused, i.e., the affected party has the right to obtain full compensation, which is not the case in all events of breach of the economic equilibrium of the contract. [Emphasis added]
796. Regarding the concept of damage, the Council of State has indicated that:619
For the damage to be compensable doctrine and case law have established that it must meet the characteristics of being certain, concrete or determined and personal.
797. In this regard, the Council of State also resolved that:620
The compensable damage must therefore be certain, or present and/or future. A type of certain future damage is the loss of profits, since there is certainty as to its existence.
(iv) Analysis of the Arbitral Tribunal
798. First, in relation to the Claimants’ right to receive damages, this Tribunal considers that POB is entitled to request that the damages be compensated as a consequence of ANI’s breaches.
799. The Arbitral Tribunal has already determined that ANI breached its duty to structure the Agreement, a breach that was then aggravated by its reluctance to negotiate in good faith a solution to EER of UFs 4 and 5. In these circumstances, ANI’s unlawful conduct has been corroborated, and its harmful consequences must be compensated to POB.
800. Indeed, and as explained above, although the Arbitral Tribunal accepted the Respondent’s claim for Early Termination pursuant to the provisions of Article 14.1(e) of the Concession Contract, it accepted such claim because its factual
619 Exhibit CL-116. ↩
620 Exhibit CL-121. ↩
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criteria were met due to ANI’s own fault, and therefore its contractual liability towards the Concessionaire remains unaffected.
801. Second, Article 90 of the Constitution of the Republic of Colombia recognizes the principle of full reparation for damages, repeated in Article 50 of Law 80 of 1993. By virtue of these provisions, the State, through ANI in this case, is obliged to fully compensate the Concessionaire for any unlawful damages caused as a result of actions or omissions attributable to it.
802. This principle of comprehensive reparation for damages has also been recognized by the jurisprudence of the Council of State, as noted above.
803. In this regard, the Arbitral Tribunal accepts the Claimants’ claim, in the sense of declaring that ANI’s breaches have caused POB unlawful damages, which must be fully compensated by ANI.
(b) Amount of damages claimed by the Claimants
(1) Position of POB & S&B’s
804. The Claimants make two damage quantifications for different scenarios:
(i) By means of FTI’s First Expert Opinion (Exhibit CER-001) they make a damages quantification based on POB’s Statement of Claim in which it is assumed that, as a consequence of ANI’s breaches, UFs 4 and 5 cannot be performed and UFs 1, 2 and 3 can be performed for the entire duration of the Agreement (“LoP Loss UF4 and UF5”);
(ii) By means of FTI’s Second Expert Opinion (Exhibit CER-002) they make a quantification of damages based on ANI’s subsidiary request for Early Termination of the Agreement in which POB assumed that, as a consequence of ANI’s breaches, POB will not be able to continue performing any of the UFs or exercising all of the rights and obligations under the Concession Agreement (“Loss LoP Project”);
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(iii) FTI’s Third FTI Expert Opinion (Exhibit CER-006) (i) updates the calculations of both scenarios; (ii) addresses certain arguments raised in the Contradiction Expert Opinion submitted by ANI; (iii) and makes other updates according to new instructions.
i. Quantification of damages for non-performance of UFs 4 and 5 (“Loss LoP UF4 and UF5”)
805. FTI has used the “Loss of profits” (LoP) methodology to quantify POB’s damages with the following exercise: (i) assess POB’s Current Position, with the contractual breaches; (ii) project the Counterfactual Position in which POB would be without the breach; and (iii) compare the current position and the counterfactual position, the difference between which is the damages subject to compensation.621
806. This methodology calculates (i) the assets lost suffered; and (ii) the profit, benefit or gain foregone by POB.
807. To present the Current Position:622
621 POB and S&B Statement of Claim, ¶ 459. ↩
622 POB and S&B Statement of Claim, ¶ 463. ↩
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808. To present the Counterfactual Position: FTI projected what would have happened if ANI had acted in accordance with the Agreement, which would have meant that UFs 4 and 5 could have been performed and the Functional Unit Termination Minutes of UFs 4 and 5 executed on 15 December 2018, and begun receiving the corresponding Retribution as of January 2019623.
809. As a result of contrasting the Current Position and the Counterfactual Position, FTI concluded that Claimants (i) have incurred costs that they would not have incurred if ANI had fulfilled its contractual obligations and (ii) will forego profits that they would have received if ANI had fulfilled its contractual obligations.
810. Regarding the costs, the Counterfactual Position does not include certain values that are included in the Current Position, such as:624 (i) values associated with the additional costs due to an extended Construction Phase of UFs 4 and 5,
623 Exhibit CER-001, ¶ 6.1.1 y 6.2.1. ↩
624 POB and S&B Statement of Claim, ¶¶ 466, 468-470. ↩
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which include (a) higher funding in the Supervisor Subaccount625 and (b) higher amounts for obligations related to Priority Interventions; (ii) amounts incurred in relation to the IDB Credit Agreement due to ANI’s breaches; and (iii) amounts incurred for EPC claims, which would not have been incurred if ANI had fulfilled its contractual obligations.626
811. Regarding the lost utility, the Counterfactual Position assumes that, if ANI had fulfilled the Agreement, UFs 4 and 5 could have been performed. Therefore, the Concessionaire would have incurred the Capex expenses associated with said UFs as well as the O&M Costs associated with these UFs and, consequently, it would have received the corresponding Retribution,627 which includes the concepts of (i) ANI Contributions; (ii) Toll Collection; and (iii) income from Commercial Exploitation.628
812. FTI’s Third Expert Opinion updates the amount owed under this concept, considering the date of the Third Expert Opinion as the Evaluation date and concludes that the LoP UF 4 and UF 5 amounts to COP $1,665.0 billion.629
625 POB argues that ANI has breached the Agreement by not taking appropriate action to reduce the value of the funding corresponding to this sub-account. As explained by FTI, the Agreement provides that funding for this sub-account is almost 3 times greater during the Construction Phase than during the Operation and Maintenance Phase. This is explained by the fact that the work of the Supervisor is considerably greater when the activities related to the works of the Project are being performed. Due to the EER, these works, two of the most significant UFs for the Agreement in terms of Capex and Opex, are not being performed, and yet ANI has refused to execut a contractual agreement that reduces funding for this sub-account. ↩
626 Among the damages claimed by POB are the damages suffered at the level of the EPC Contractor (Constructor POB Consortium) at the time of ANI’s breaches. The Concession Agreement and the EPC Contract are linked contracts, since they have the common purpose of carrying out the Interventions. Thus, due to the way in which ANI itself structured the Concession Agreement, what happens in the Concession Contract – specifically in relation to the performance of the Interventions - will have consequences in the EPC Contract. For this reason, ANI has the obligation to compensate the EPC Contractor for any damages caused by its breaches of the Concession Agreement. ↩
627 POB and S&B Statement of Claim, ¶ 467 ↩
628 Exhibit CER-001, ¶ 2.2.3. ↩
629 Exhibit CER-006, ¶ 2.3.4 (2). ↩
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ii. Quantification of Damages for Early Termination of Agreement (“Project LoP Loss”)
813. In preparing the Second FTI Expert Opinion that was submitted with the Statement of Defense on the Counterclaim, instructions were given to calculate the losses suffered by POB, maintaining the same Assessment Date and the same information cut-off date as the First Expert Opinion and assuming that, as a consequence of ANI’s breaches and in accordance with the arguments raised by ANI in its Counterclaim, it will not be possible for POB to continue with all of its rights and obligations under the Agreement as of March 2022.630
814. Thus, in the Second FTI Expert Opinion the “Project LoP Loss” is calculated, to distinguish it from the “LoP Loss UF 4 and UF 5” assessed in the First Expert Opinion according to the summarized instructions.
815. Conceptually, the difference between both calculations is due to the instructions to assume regarding the future state of the Project under the Current Position. Specifically:631
816. Regarding the application of the cost calculation formula established for Early Termination of the Concession Agreement, FTI analyzes the conceptual difference between the Project LoP Loss and the Agreement Termination Payment. It notes that, although both the Project LoP Loss and the Agreement Termination Payment seek to
630 Statement of Defense to the Counterclaim, ¶¶ 548-559. ↩
631 Exhibit CER-002, ¶ 2.2-3.2. ↩
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compensate POB in a situation where it will not continue with the performance of the Project, the type of compensation granted for each concept is different:632
817. In conclusion, if the purpose of the Arbitration Award is to return POB to the position it would have been, but for ANI’s breaches, only the Project LoP Loss fully compensates POB for the losses it has suffered, since only this concept takes into account the value of the rights POB acquired by entering into the Agreement. On the other hand, the Agreement Termination Payment would limit the compensation made by ANI to POB to certain costs (net of revenues) incurred up to the Early Termination of the Agreement, without taking into account the profits not received by POB both in the past and in the future as a consequence of ANI’s breaches.
818. FTI’s Third Expert Opinion updates the amount due for this concept, considering as the Evaluation date the date of its Third Expert Opinion and concludes that the LoP Project amounts to COP $2,227.8 billion.633
632 Exhibit CER-002, ¶ 3.4. ↩
633 Exhibit CER-006, ¶ 2.3.4 (1). ↩
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iii. Amounts and calculations broken down by UFs as requested by the Arbitral Tribunal in Procedural Order No. 17 and Procedural Order No. 18
819. As explained above, on 1 December 2023, the Arbitral Tribunal issued Procedural Order No. 17, by means of which it requested the Claimants to “submit a disaggregated calculation for each of the 1, 2, 3, 4 and 5 Functional Units” using the same methodology used in their previous expert reports.
820. Pursuant to Procedural Order No. 17, Claimants filed the Fourth FTI Expert Opinion (Exhibit CER-009), as instructed in Procedural Order No. 17,634 which presents (i) the breakdown by UF of POB losses;635 and (ii) the disaggregation by UF of POB costs.636
821. FTI’s Fourth Expert Opinion presents the calculation of the profits that POB did not receive under the Loss of Profit methodology (used in its previous reports), disaggregated by each of the five UFs of the Project.637 To this end, this report disaggregates by UF both the income components and the cost components of the Current Position and the Counterfactual Position developed in Opinions CER-001 and CER-002.638
822. Thus, the Opinion presents the result of the disaggregation by UF of the POB losses for the different scenarios proposed,639 that is, (i) for the UF 4 and UF 5 LoP scenario,640 and (ii) for the Project LoP scenario.641
634 Exhibit CER-009, ¶ 1.2. ↩
635 Exhibit CER-009, section 3. ↩
636 Exhibit CER-009, section 4. ↩
637 Exhibit CER-009, ¶ 2.2. ↩
638 Exhibit CER-009, ¶ 3.3. ↩
639 Exhibit CER-009, ¶ 3.4. ↩
640 Exhibit CER-009, ¶ 3.4.1, Table 3.13. ↩
641 Exhibit CER-009, ¶ 3.4.1, Table 3.14. ↩
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823. The Opinion then does the same with the disaggregation of POB costs, distinguishing between those costs incurred by POB and those to be incurred642.
824. In turn, pursuant to Procedural Order No. 18, dated 12 April 2024, Claimants filed a communication accompanied by FTI’s Fifth Expert Opinion (Exhibit CER-010), responding, where appropriate, to the opposing party’s report regarding Exhibit CER-009, and updating some of its calculations.
(ii) ANI’s position
i. On the quantification of damages for non-performance of UFs 4 and 5 (“Loss LoP UF4 and UF5”);
825. The Respondent rejects the damages claimed for damages related to the LoP UF4 and UF5 Loss scenario, pointing out that, although POB says it is asking for full compensation of the damage, what it is really asking for is the Retribution of the Agreement.
826. ANI argues that the requirements for POB to receive any Retribution under the terms of the Agreement have not been met. In fact, ANI argues that, in accordance with Section 3.1 of the Concession Agreement, the right to Retribution comes into existence when the Completion Minutes of each Functional Unit is executed, which have not been executed with respect to UFs 4 and 5, as acknowledged in the same FTI Expert Opinion.643
827. In this regard, ANI points out that all the amounts corresponding to the Retribution of UFs 4 and 5 have been funded by ANI on the dates and in the terms set forth in the Concession Agreement and created for such purpose, but that these cannot be given to POB because the requirements to obtain the Retribution of
642 Exhibit CER-009, ¶ 4.1. ↩
643 ANI Rejoinder, ¶ 249-251. ↩
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UFs 4 and 5 have not been met, mainly the lack of infrastructure, i.e. the completion of UFs 4 and 5.644
828. ANI adds that in accordance with the provisions of Section 2.2. “Agreement value and budgetary contributions” of the Concession Agreement it is established that the concept of contract value cannot be used as a guarantee in favor of the Concessionaire, since the Retribution is contingent upon the fulfillment of various obligations by the Concessionaire, including among others, the verification of the availability of the infrastructure and compliance with the service levels and quality standards established in the Agreement.645
ii. On quantification of Damages for Early Termination of Agreement (“Project LoP Loss”);
829. The Respondent asserts that the claim for compensation corresponding to the LoP Loss of the Project was submitted untimely by the Claimants, since the procedural moment to present all the claims is in the Statement of Claim. ANI adds that, if this claim were admitted, the due process principle would be violated since ANI would not be able to adequately challenge this formulation.646
830. On the other hand, the Respondent points out that, in the event that the Arbitral Tribunal decides to address the merits of this claim, it should be dismissed on the grounds that ANI would have complied with its contractual obligations and, for its part, POB would have failed to comply with its own to overcome the EER. As a result, POB has not completed the contracted works nor is it entitled to the Retribution. Thus, Early Termination would occur due to events attributable to the Concessionaire and would therefore not cause unlawful damage that must be compensated.647
644 ANI Statement of Defense, ¶ 404-420. ↩
645 ANI Rejoinder, ¶ 252. ↩
646 ANI Reply on the Counterclaim, ¶¶ 263-267. ↩
647 ANI Reply on the Counterclaim, ¶¶ 268-272. ↩
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831. Finally, ANI argues that the right to retribution in PPP contracts is conditioned to the availability of the infrastructure, the compliance with the service levels and the quality standards in the different functional units. Thus, ANI concludes that POB is not entitled to request compensation for damages for the Retribution foregone in the event that Early Termination of the Concession Agreement is declared, since to date it has not completed the works related to the UFs 4 and 5, which is the inherent requirement for Retribution.648
832. On the other hand, ANI points out that, in the event that Early Termination of the Agreement is declared, it is not appropriate to grant a compensation for damages, but rather the liquidation of the Agreement, in accordance with the rules agreed in Section 18.3 of the Concession Agreement.649
833. ANI points out that the liquidation of the Agreement corresponds to a balance of accounts of the services performed and that must be recognized, therefore, if the balance of the performance of the Agreement indicates that ANI must make an economic recognition to the Concessionaire by virtue of the performance of the Agreement, this acknowledgement would be based on the performed contractual obligations and as a compensation for damages. ANI adds that this balance must correspond to the technical and financial information of what has been performed by the Parties, which at this moment the Tribunal lacks, so it would not have objective elements of judgment to proceed to make a judicial liquidation that covers the entire performance of the Agreement.650
iii. On the amounts and calculations broken down by UFs as requested by the Arbitral Tribunal in Procedural Order No. 17 and in Procedural Order No. 18
834. Pursuant to Procedural Order No. 17, Respondent submitted a Contradiction Report on exhibit CER-009 submitted by the Claimants.
648 ANI Reply on the Counterclaim, ¶¶ 273-274. ↩
649 ANI Reply on the Counterclaim, ¶ 233. ↩
650 ANI Reply on the Counterclaim, ¶¶ 233-234; Contradiction Report, pp. 33-35. ↩
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835. In said Contradiction Report, the Respondent points out that Exhibit CER-009 (i) would not comply with Procedural Order No. 17, since it covers dates, items and evidence that exceed what was analyzed in Exhibits CER-001 and CER-002;651 and (ii) the calculations of the profit received by POB in UFs 1, 2 and 3 would not have been purged as required by Procedural Order No. 17;652 (iii) the non-existence of POB’s entitlement to the Retribution for UFs 4 and 5;653 (iv) the fact that the EER does not provide for acknowledgements;654 (v) the early termination formula of the Agreement is incompatible with the Loss of Profit methodology;655 (vi) that claims submitted by third parties to POB, such as the EPC Claims, were included;656 (vii) that the Arbitral Tribunal does not have competence to rule on UFs 1, 2 and 3;657 and (viii) finally, it highlights the difference between damages and the reestablishment of the economic equilibrium of the Agreement.658
836. For all these reasons, ANI requests that the evidentiary value of exhibit CER-009659 be dismissed.
837. Pursuant to Procedural Order No. 18, the Respondent submitted its response to Exhibit CER-010 accompanied by a counter report of such exhibit.
838. ANI does not propose an alternative calculation or amount to that submitted by the Claimants.
(iii) Analysis of the Arbitral Tribunal
839. In line with the previous decision, on POB’s right to full compensation, the Tribunal considers that it is necessary for this Tribunal to determine the amount of the damages
651 Memorial submitted in Response to Exhibit CER-009, section 2.1; Contradiction Report Exhibit CER-009, pp. 7-11. ↩
652 Memorial submitted in Response to Exhibit CER-009, section 2.2; Contradiction Report Exhibit CER-009, p. 6. ↩
653 Memorial submitted in Response to Exhibit CER-009, section 2.3; Contradiction Report exhibit CER-009, section 6. ↩
654 Memorial submitted in Response to Exhibit CER-009, section 2.4. ↩
655 Memorial submitted in Response to Exhibit CER-009, section 2.5; Contradiction Report Exhibit CER-009, section 8. ↩
656 Memorial submitted in Response to Exhibit CER-009, section 2.6. ↩
657 Memorial submitted in Response to Exhibit CER-009, section 2.7. ↩
658 Memorial submitted in Response to Exhibit CER-009, section 2.8. ↩
659 Memorial submitted in Response to Exhibit CER-009, ¶ 89. ↩
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suffered by POB and which are attributable to ANI. For this purpose, it is necessary to take into account the following considerations.
840. First, it is necessary to highlight that, as decided in the preceding Sections, the Tribunal has accepted ANI’s subsidiary claim for Early Termination of the Concession Agreement, in accordance with Section 14.1(e) of the Agreement, but as a consequence of breaches attributable to ANI and, therefore, leaving its contractual liability derived from such breaches unimpaired.
841. Thus, and as it has already been stated, the Arbitral Tribunal considers that damages in favor of POB are due, by virtue of the principle of full reparation of the damage.
842. However, the Tribunal rejects ANI’s position that, in the event that Early Termination of the Concession Agreement is declared under Section 14.1(e) of the Agreement, the liquidation formulas set forth in Section 18.3. of the Agreement and/or Section 12.1(h) regarding compensation for Exemption of Liability Event should be applied.
843. First, inasmuch as the principle of full reparation of damages takes precedence over any contractual provision to the contrary, although in this case the Arbitral Tribunal concludes that it is not even necessary to establish this order of precedence.
844. In effect, Section 18.3 of the Agreement regulates situations of liquidation of the Agreement that look, in essence, to the comp items and amounts performed, and that cannot be interpreted as an exemption or exclusion of liability clause that substitutes any other indemnity. In no section of said Section or of the Concession Contract have the Parties attributed such an effect, ignoring or eliminating the possibility of the Claimants to claim damages other than the reimbursement of those costs incurred that are included in the settlement items of the Agreement. This is especially so in the case of costs and damages suffered as a consequence of ANI’s breaches.
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845. Second, since neither Party has requested the liquidation of the Concession Agreement pursuant to Section 18.3 of the Agreement, this Arbitral Tribunal is therefore not competent to do so.
846. Indeed, the Claimants are not seeking in this Arbitration the liquidation of the Agreement, but rather the compensation of the damages suffered as a consequence of the breaches of ANI that have caused unlawful harm to POB that the latter is not obliged to bear.
847. The Claimants also do not seek compensation for Exemption of Liability Event pursuant to Section 12.1(h) of the Concession Agreement, but rather damages for ANI’s breaches, including ANI’s breaches of its obligations set forth in the EER Minutes.
848. Third, and in line with the foregoing, because the Tribunal considers that Early Termination under Section 14.1(e) of the Agreement, but for breaches attributable to ANI, is not provided for in any of the Agreement liquidation scenarios set forth in Section 18.3 of the Agreement and cannot be applied by analogy.
849. Indeed, the Arbitral Tribunal agrees with the Claimants that the formula set forth in Section 18.3(f) of the Agreement, which contemplates Early Termination in the Construction Phase, would not be applicable because it does not include all the costs incurred by the Concessionaire, but only those that have been recognized by ANI and that are attributable to a series of specific activities established in the Agreement for such purpose, from the Commencement Date until the execution of the Completion Minutes of the Agreement.660 In addition, this formula implies the application of a capitalization rate to such costs, depending on whether it is Early Termination due to (i) request of the Concessionaire, (ii) due to causes not attributable to any of the Parties, and (iii) due to causes attributable to the Concessionaire.661 The same applies
660 Exhibit CER-002, ¶ 3.4.7. ↩
661 Exhibit CER-002, ¶ 3.4.8. ↩
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to the formula established in Section 18.3(g) of the Agreement, which contemplates Early Termination in the Operation and Maintenance Stage. None of them applies to the scenario studied in this Award of Early Termination due to causes attributable to ANI.
850. Second, and as already explained, the Claimants quantify the damages claimed in two scenarios (i) UF 4 and UF 5 LoP Loss and (ii) Project LoP Loss.
851. However, the Tribunal considers that neither of the two scenarios allows the quantification of the damages that the Arbitral Tribunal considers should be compensated to POB.
852. It should be recalled that the UF 4 and UF 5 LoP Loss Scenario assumes a current position in which (i) the construction of UFs 4 and 5 would have been completed and the Completion Minutes of Functional Unit executed on 15 December 2018; (ii) POB would have been compensated in the cost overruns associated with the archaeological findings; and (iii) UFs 1, 2 and 3 could continue to be performed and POB will continue to receive profits for their performance (although with some adjustments with respect to the projected costs and revenues) and a counterfactual position in which it will not be possible to complete the required Interventions for UFs 4 and UF 5, meaning that theses UFs (and, as a consequence, the entire Project), will remain in Construction Phase until the termination of the Agreement.
853. Thus, this scenario seeks to demonstrate the costs already incurred by the Concessionaire, as well as the costs that it will continue to incur, despite being unable to receive UFs 4 and 5 Retribution.
854. The reason why the UF 4 and UF 5 LoP Loss scenario does not apply is obvious; the Arbitral Tribunal has accepted the ANI’s subsidiary claim for Early Termination of the Agreement. As explained, the Tribunal does not consider it feasible to declare that the project remains in the Construction Phase ad eternum. In this regard, the Concessionaire will not (i) be entitled to receive the Retribution for UFs 4 and 5 (for the reasons explained below), (ii) nor will it have to continue incurring costs with respect to UFs 4 and 5.
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855. On the other hand, the Project LoP Loss scenario puts us in a situation where, as a consequence of non-compliance by the ANI and, in the event that Early Termination of the Agreement is declared, it will not be possible to continue with the entire Agreement. That is, POB will not continue receiving any Retribution, nor will it have to incur any costs with respect to any UF of the Agreement, since it has been terminated early.
856. In this scenario, FTI has calculated a loss scenario that considers the present value of the profits not received by POB from the beginning of the Agreement until its termination, with respect to the entire Project, that is, with respect to all UFs.
857. This subsidiary scenario has the obstacle that it includes the entire Project in the same calculation and under practically the same situations, even though, in the opinion of this Arbitral Tribunal, the situation of UFs 1, 2 and 3 is different from that of UFs 4 and 5.
858. Indeed, UFs 1, 2 and 3 were performed and completed by POB, and all of them have UF Completion Minutes.662 Thus, in accordance with Section 3.1 of the Concession Agreement, POB has the contractual right to receive Retribution for these UFs, in accordance with the contractual terms. The Arbitral Tribunal considers that the loss of profit or loss of earnings related to UFs 1, 2 and 3 meets the requirements of certainty and reliability required by the jurisprudence of the Council of State.
859. However, the same does not occur with UFs 4 and 5, which have not been performed and completed. The Project’s LoP Loss scenario (like the UFs 4 and 5 LoP Loss scenario) assumes, in a counterfactual position, that, if not for ANI’s breaches, the Completion Minutes for UFs 4 and 5 would have been executed in December 2018.663
662 Annexes FTI-05 (Completion Minutess of UF1 and UF2); FTI-64 (Completion Minutes of UF3). ↩
663 Exhibit CER-002, ¶ 1.2.4, 1.3.2. ↩
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860. However, there is no further evidence to confirm that UFs 4 and 5 Completion Minutes were actually going to be signed on 15 December 2018. The Claimants point out, regarding the status of the Project, that the Interventions in UFs 4 and 5 have been suspended since October 2017 by virtue of the EER Minutes664 and without an analysis of the percentage of progress that would allow this Tribunal to be convinced that UFs 4 and 5 had been completed on time.
861. There is no further information in the case file concerning the progress status of UFs 4 and 5 as of October 2017, when the Interventions in these UFs were suspended. A reference to the percentage of progress of UFs 4 and 5 is found in the Contradiction Expert Report presented by the ANI, which states that the percentage of progress of the interventions in UFs 4 and UF 5 was of 5.07% and 1.69%.665 Regarding this statement, the Tribunal notes that there is no evidence to justify it, since this statement does not contain any annex or reference,666 even though it has not been disputed by POB.
862. Consequently, the Arbitral Tribunal considers that it does not have sufficient evidence to be convinced that UFs 4 and 5 would have been effectively completed and the corresponding Functional Unit Completion Minutes executed by December 2018.
863. In this regard, the Arbitral Tribunal considers that the lost profits in respect of UFs 4 and 5, that is, the loss of earnings in respect of said UFs, does not meet the requirement of certainty and reliability required for it to be compensable damage. However, the Arbitral Tribunal considers that the costs incurred by POB with respect to UFs 4 and 5 are compensable, to the extent that they have been evidenced and have not been dismissed for other reasons in this Award.
664 Claimants Post-Hearing Memorial, ¶ 409, C-002: EER Minutes, p. 29. ↩
665 Contradiction Opinion, p. 28. ↩
666 This statement has a footnote whose reference indicates only “ANI Information”, with no other support to validate it. ↩
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864. From the above, it is possible to conclude that since the Early Termination of the Concession Agreement has been granted, but due to ANI’s breach, the Arbitral Tribunal considers that the full reparation of the damages covers (i) all the profits lost by POB, from the beginning of the Agreement until its termination (due to breaches attributable to ANI) with respect to UFs 1, 2 and 3, but not the profits foregone with respect to UFs 4 and 5, except for those (ii) costs incurred with respect to UFs 4 and 5, dully proved and that have not been dismissed for other reasons.
865. Third, it is necessary to determine the specific amounts of each of these points.
866. First, regarding point (i), the Arbitral Tribunal found that the evidence submitted in the process did not contain the necessary elements to determine the amount of profit lost in respect of UFs 1, 2 and 3 separately from the amount of profit lost in respect of UFs 4 and 5. This was because the Claimants did not originally present an amount calculated based exclusively on UFs 1, 2 and 3. Nor was it possible to obtain an amount derived from the calculation of the Project’s LoP Loss, because FTI’s Reports did not analyze these losses disaggregated by UF, which would allow separating the amounts of some of the UFs from the amounts of the others.
867. For this reason, through Procedural Order No. 17, the Arbitral Tribunal requested the calculation of the amounts of profits not received by POB broken down by UF; in order to determine the amount corresponding to the profit not received only with respect to UFs 1, 2 and 3. As explained, this ruling contains said quantification for two different scenarios: LoP Loss for UFs 4 and 5 and Project LoP Loss. Considering that the ANI’s subsidiary claim for Early Termination has been accepted, the amounts determined for the Project’s LoP Loss scenario must be taken into account. Likewise,
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and since POB’s claims regarding the funding667 have been accepted, the scenario that includes these amounts must be taken into account (LoP Loss scenario of the POB Funding Project).668
868. According to Exhibit CER-010, which contains the most updated version of the analysis disaggregated by the different UFs, thus updating Exhibit CER-009, this amount is quantified as: COP $160,000,000,000 for UF 1; COP $332,200,000,000 for UF 2; and COP $316,900,000,000 for UF 3.669
869. However, in the case of UF 2, the amount indicated must be subtracted from the amount corresponding to the EPC Claims (COP 5.8 billion), over which, as determined in Section IV.A.2 of this Award, the Arbitral Tribunal lacks jurisdiction. Thus, in the case of UF 2, the Project LoP Loss amounts to COP $326,400,000,000.
870. Thus, the total LoP Loss of the Project corresponding to UFs 1, 2 and 3 amounts to COP $803,300,000,000.
871. Second, with respect to point (ii), the Arbitral Tribunal considers that the costs incurred with respect to UFs 4 and 5 that have been demonstrated and that have not been dismissed in this Award for other reasons are included in the full reparation of damages.
872. These costs are:670
667 Section IV.B.3 of the Award. ↩
668 Exhibit CER-009, ¶ 2.2.5. ↩
669 Exhibit CER-010, ¶ 5.3.1, Table 5-2. ↩
670 The costs indicated here originate from the Exhibit POB CER-010, ¶ 5.4.1, Table 5-3. However, the Arbitral Tribunal does not include in the following list of costs incurred by POB the concept “Funding Obligations”, given that this concept was treated and awarded to POB separately, in Section IV.B.3 of this Award. ↩
671 Exhibit CER-010, Table 5-3; Appendix 1. ↩
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873. The costs incurred for the performance of the Interventions in UFs 4 and 5 do not include the Claims of the EPC Contractor, arising from the EPC Contract, regarding which the Arbitral Tribunal has already determined that it does not have jurisdiction.679 Likewise, with respect to the amounts relating to the reduced funding that POB was obliged to make, the provisions of that Section680 shall apply, which is why the “POB Funding” scenario has been used, as explained above.
672 Exhibit CER-010, Table 5-3; Appendix 1. ↩
673 Exhibit CER-010, Table 5-3; Appendix 1. ↩
674 Exhibit CER-010, Table 5-3; Appendix 1. ↩
675 Exhibit CER-010, Table 5-3; Appendix 1. ↩
676 Exhibit CER-010, Table 5-3; Appendix 1. ↩
677 Exhibit CER-010, Table 5-3; Appendix 1. ↩
678 Exhibit CER-010, Table 5-3, Appendix 1. ↩
679 Section IV.A.2. ↩
680 Section IV.B.3. ↩
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874. Accordingly, the Arbitral Tribunal considers that the costs incurred in respect of UFs 4 and 5, and which must be compensated to POB amount to a total of COP $413,605,900,000.
875. Fourth, it is necessary to refer to exhibit CER-009 that the Arbitral Tribunal has considered valid to quantify the damages (updated in exhibit CER-010) and the reasons why the objections to said report made by the Respondent have been dismissed.
876. First, the Respondent raises a series of objections regarding the calculation of the amounts in exhibit CER-009 and that these would not comply with the terms of Procedural Order No. 17 because they exceed the cut-off date and would not correspond to the requested analysis period, since the two scenarios would include projections of future costs and expenses and not “actually incurred” figures as required by Procedural Order No. 17.681
877. In summary, the Respondent notes that the Loss LoP UFs 4 and 5, and Loss LoP Project scenarios project a counterfactual scenario in which POB would continue to operate UFs 1, 2 and 3 until 2040, which would exceed the cutoff date of 31 July 2021. On the other hand, the Respondent points out that in order to comply with Procedural Order No. 17, FTI was required to take on actual revenues and subtract actual costs in order to clean up the amount of profit required, and that, by contrast, Exhibit CER-009 allegedly only quantified the costs incurred.682
878. However, the Arbitral Tribunal finds that the exhibit CER-009 complies with the terms of Procedural Order No. 17, which states that, in order to present the disaggregated calculations of incurred costs and lost profits, POB should “use the “Loss of Profit” model already upheld and adopted in the CER 1 and CER 2 exhibits, for each of the Functional Units 1 to 5.”
681 Memorial Submitted in Response to Exhibit CER-009, section 2.1; Contradiction Report Exhibit CER-009, sections 1, 2, 3. ↩
682 Memorial Submitted in Response to Exhibit CER-009, section 2.2. ↩
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879. In this sense, the cut-off date of Reports CER-1 and CER-2 refers to the cut-off date of the financial and operational information of the Project. However, this does not mean that the damages claimed by POB should be calculated only up to this date. Indeed, the Loss of Profit methodology used in Exhibits CER-1, CER-2, CER-6 and, pursuant to Procedural Order No. 17, also the exhibit CER-009 “considers the incremental profits (i.e., revenues net of costs) that Claimants have failed to receive as a result of the Alleged Acts from the beginning of the Agreement until its termination (i.e., both in the past and in the future)”.683 That is, this methodology necessarily includes projections of future costs and profits, and those after 31 July 2021, which is consistent with the request in Procedural Order No. 17.
880. The Arbitral Tribunal does agree with the Contradiction Opinion that the scenarios under the Loss of Profit methodology and the costs incurred are not cumulative,684 because the former includes the latter. But in this case, that does not occur and they do not accumulate, because, as indicated, (i) the profits not received under the Loss of Profit methodology, of UFs 1, 2 and 3 and (ii) the costs incurred of UFs 4 and 5 are granted.
881. Second, the Respondent also considers that exhibit CER-009 should be dismissed, due to a series of substantive considerations, which should be dismissed at this point, since they have already been addressed in this Award and which, ultimately, lead to the decision on damages that has been awarded to the Claimants. For the sake of completeness, brief references will be made to each of them.
882. The Respondent alleges that POB is not entitled to receive the Retribution for UFs 4 and 5, since these UFs have not been delivered and their respective termination Minutes have not been signed.685 The Arbitral Tribunal agrees with
683 Exhibit CER-006, ¶ 2.2.2. ↩
684 Contradiction Opinion to Exhibit CER-009, p. 12. ↩
685 Memorial Submitted in Response to Exhibit CER-009, section 2.3; Contradiction Report exhibit CER-009, section 6 ↩
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this position, as has already been decided previously, which is why POB has not been awarded the damages consisting of the aforementioned Retribution of UFs 4 and 5.
883. The Respondent points out that the EER Minutes allegedly established that a circumstance beyond the control of the Parties would have compromised the normal performance of UFs 4 and 5, so there would not be a breach by ANI that would allow these claims to be adapted as compensatory.686 However, this Arbitral Tribunal has already decided that there were breaches by ANI; both of the law, the Agreement and the EER Minutes, which does allow these claims to be adapted as compensation for POB.687
884. The Respondent alleges that the calculations made by FTI are not those that correspond to the early termination formula recognized in the Agreement.688 However, this Arbitral Tribunal has already explained why this formula is not applicable to the quantification of POB’s689 damages. It is also reiterated that, by means of this Award, the Concession Agreement is not being liquidated, but rather the damages suffered by the Claimants and which have been claimed in this Arbitration are being granted.
885. The Respondent argues that the Arbitral Tribunal has no competence to rule on the EPC690 Claims or on UFs 1, 2 and 3, in general, because they allegedly have the respective Completion Minutes and, in particular, with respect to the archaeological findings of UF2.691 On the first point, the Arbitral Tribunal has already decided that it does not have the competence to rule on the EPC Claims, which is why it is not ruling on them. On the second point, the Arbitral Tribunal considers that it does have competence to rule on the damages caused with respect to UFs 1, 2 and 3, since the Respondent filed a subsidiary claim for Early Termination of the Agreement before which the Claimant claimed the damages that would derive
686 Memorial Submitted in Response to Exhibit CER-009, section 2.4. ↩
687 Section IV.B.2 of the Award. ↩
688 Memorial Submitted in Response to Exhibit CER-009, section 2.5; Contradiction Report Exhibit CER-009, section 8. ↩
689 Section IV.D.2. ↩
690 Memorial Submitted in Response to Exhibit CER-009, section 2.6. ↩
691 Memorial Submitted in Response to Exhibit CER-009, section 2.7. ↩
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therefrom, including the profits foregone with respect to UFs 1, 2 and 3, which necessarily implies ruling on them.
886. Third, as to the distinction made by the Respondent with respect to damages and the reestablishment of the economic equilibrium of the Agreement,692 the Arbitral Tribunal has already ruled on this point, analyzing in detail the legal basis for the full compensation of damages owed to the Claimants.693
887. Fourth, although the Arbitral Tribunal is aware that this recognition is not specifically requested by the Claimants, the Tribunal considers that this decision falls within its request “(viii) That [the Arbitral Tribunal] grant any other remedy or compensation to the Claimants that it deems legally or contractually relevant and that is proven in this Arbitration”.694
888. Fifth, by Procedural Order No. 18, the Parties were given an opportunity to comment on the memorials and reports of their counterparty. Likewise, POB was instructed to:
[D]ifferentiate, separately for each UF, whether EPC’s costs and expenses were included in the calculation of damages, and to specify the overall value of these EPC costs and expenses in each of the UFs (“Aggregate Value”). Additionally, within the Global Value of each UF, to specify whether these costs and expenses have been invoiced by the EPC to POB, and, separately, whether they have been paid by POB to the EPC.
889. The Claimants complied with the requirement by submitting Exhibit CER-010.695 The Respondent, for its part, presented its objections, essentially identical to those formulated in response to CER-009.696 As previously stated, the Arbitral Tribunal took into account the updated amounts of the Project’s LoP Loss to
692 Memorial Submitted in Response to Exhibit CER-009, section 2.8. ↩
693 Section VI.D.1 of the Award. ↩
694 POB and S&B Statement of Claim, ¶ 589. ↩
695 Exhibit CER-010. ↩
696 Memorial Submitted in Response to the Contradiction Financial Expert Opinion dated March 2024. ↩
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determine the loss of POB upon termination of the Agreement; in turn, the breakdown of the costs incurred for UFs 4 and 5 was taken into account.
890. In conclusion, the Arbitral Tribunal grants POB compensation for the Project’s LoP Loss corresponding to UFs 1, 2 and 3 amounting to COP $803,300,000,000, together with compensation for the costs incurred by POB for the performance of the Interventions in UFs 4 and 5 amounting to COP $413,605,900,000.
2. IS S&B ENTITLED TO COMPENSATION OR DAMAGES AND IN WHAT AMOUNT?
(a) Position of POB and S&B
891. The Claimants claim that S&B has incurred compensable damages of nine and a half billion pesos (COP $9,500,000,000). They point out that, due to ANI’s breaches, S&B has been forced to maintain a series of stand-by letters of credit (the “S&B Stand-By Letters of Credit”) for a longer period than it would have had to maintain them in force if ANI had complied with the Agreement. They explain that S&B is obliged to maintain the S&B Stand-By Letters of Credit in force under the Equity Contribution Agreement, Subordination and Share Retention Agreement (“ECA”) that it signed with the IDB as a requirement for the latter to provide financing for the Project.
892. Indeed, Claimants point out that, pursuant to the ECA, S&B is obliged to keep S&B’s Stand-By Letters of Credit in effect until any of the following conditions occur: (i) the Construction Phase of the Project is completed; (ii) all of the resources to which S&B is obligated under the ECA are disbursed; or (iii) all of the debt owed to the Lenders participating in the ECA is paid.697
697 POB and S&B Statement of Claim, ¶¶ 477-478. ↩
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(b) ANI’s position
893. ANI rejects S&B’s claim for damages since the elements of liability according to the jurisprudence of the Supreme Court of Justice are: the event, the damage and the attribution to the person who caused it based on a causal relationship. However, in the present case, it is noted that the alleged damage does not exist, nor is there any evidence of the damaging event given that ANI did not carry out any positive or negative action that would have caused it.698
894. However, any damage that the company may have suffered must be proven by the company and in case it is proven that the company suffered a damage it would be attributable to POB’s negligence to overcome the EERs of UFs 2, 4 and 5; additionally, the damage would be caused thanks to the breach of its obligations regarding the activities necessary to build those Functional Units. Finally, the financial risk and the obligations to achieve the financing of the Project are of the Concessionaire and not of ANI, according to the Agreement. Therefore, the present Tribunal should dismiss the Concessionaire’s claims in this regard.
895. On the other hand, ANI points out that the Claimants fall into an alleged contradiction insofar as they have stated that ANI has no cause of action against S&B, so that, under the same criterion, S&B would not have a cause of action against ANI either.699
(c) Analysis of the Arbitral Tribunal
896. The Arbitral Tribunal rejects the Claimants’ claim regarding the financial losses suffered by S&B.
897. Indeed, the Tribunal does not find that S&B had an independent cause of action under the Agreement. While the Arbitral Tribunal took into consideration its participation in the issuance of the bid, for purposes of corroborating the
698 ANI Statement of Defense, ¶20(ix). ↩
699 ANI Statement of Counterclaim, p. 171. ↩
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international character of the Arbitration (Section IV.A.1 of the Award), it did so because it was expressly so stated in Section 15.3 of the Agreement and the accompanying footnote.
898. However, this determination does not automatically translate into S&B’s substantive rights under the Agreement. On the contrary, the Agreement has been executed between ANI and POB, who holds the contractual rights as Concessionaire.
899. Consequently, the Tribunal considers that there is no obligation on the part of ANI towards S&B, so that ANI’s breaches of the Agreement do not generate civil liability on the part of ANI, nor an obligation to compensate S&B for damages.
V. DESICION
900. Based on the background information presented, the Tribunal has the necessary information to issue this Partial Award on Jurisdiction, Liability and Damages. In the legal analysis section of this Partial Award, the Tribunal addressed the issues in the order that was most efficient given the questions posed. In this operative part, the Tribunal summarizes its decision on those issues in the order in which the Parties presented them in their written submissions, and therefore decides as follows:
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caused by ANI’s breaches and by virtue of the declaration of Early Termination of the Agreement. ANI shall pay POB the amount of COP $413,605,900,000;
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COP $803,300,000,000 for loss of profit with respect to UFs 1-3, for a total of COP $1,336,405,900,000.
18. The file remains open and the Tribunal reserves jurisdiction over the matter of interest and costs, in accordance with Procedural Order No. 16. The Tribunal instructs the Parties to submit their written submissions on interest and costs, in accordance with Articles 31.4 and 34 of the Rules. In the pleadings, each Party shall clearly and concisely state the subject matter of its claim for interest and costs of the Arbitration, the legal grounds on which such claim is based, and shall provide the necessary evidence in support of the claim for costs of the Arbitration. The submission of the pleadings on interest and costs of the Arbitration shall be made simultaneously, and within 27 days from the date of issuance of this Partial Award, on 15 January 2025. In turn, the written responses to the claim for interest and costs of the Arbitration shall be filed simultaneously, and within 27 days of the filing of the initial pleadings, on 11 February 2025.
Any claim or request, other than claims for interest and costs, not directly expressed in this Partial Award, is deemed denied. This Award constitutes a liquidation of all claims presented in this Arbitration, except as set forth herein. In addition, this Partial Award is enforceable immediately and ANI is obligated to pay the total amount of COP $1,336,405,900,000 awarded to POB.
We hereby certify that, for the purposes of Article 1 of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, this Partial Award was issued in Bogotá, Colombia.
Date: 19 December 2024
|
Cristian |
Digitally signed by Christian |
ELINA |
Digitally signed by ELINA |
|
Cristian Conejero, Arbitrator |
Elina Mereminskaya, Arbitrator |
Signature
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I, Eduardo Palmer, affirm under my oath as Arbitrator that I am the person described herein and that I have executed the present instrument which is the Partial Award.
Signature
I, Elina Mereminskaya, affirm under my oath as Arbitrator that I am the person described herein and that I have executed this instrument which is the Partial Award.
ELINA
MEREMINSKAYA *
Elina Mereminskaya
Arbitrator
Digitally signed by ELINA
MEREMINSKAYA*
Date: 2024.12.19 17:47:09-03'00'
I, Cristian Conejero, affirm under my oath as Arbitrator that I am the person described herein and that I have executed this instrument which is the Partial Award.
Signature