International Chamber of Commerce
International Court of Arbitration
ARBITRATION No. 22370 / DDA
DIVINE INSPIRATION GROUP (PTY) (South Africa)
Applicant
vs/
THE DEMOCRATIC REPUBLIC OF CONGO (Dem. Rep. of Congo)
Respondent
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1. This final award (the "Final Award") is made in accordance with the arbitration rules of the International Chamber of Commerce ("ICC") in force on 1 January 2012 (the "Regulations" in case No. 22370 / DDA (the "Arbitration").
2. The applicant in Arbitration is the company DIVINE INSPIRATION GROUP (PTY) (the "Applicant" or "DIGOIL", created and organised under the law of South Africa, whose registered office is at:
c/o Ian Levitt Attorneys
19th Floor
Sandton City Office Tower
2196 Sandton City, Gauteng
South Africa
3. It is represented by its counsel:
Maître Bernard Remiche
Maître Vincent Cassiers
SYBARIUS
Chaussée de Waterloo 880
B-1000 Bruxelles
Belgium
Phone: +32 2 379 00 50
Fax: +32 2 375 82 56
Email: [email protected]
[email protected]
4. The following joined the representation of the Applicant as of 13 June 2018:
| Mr John Evans Mrs Steffi Spitznagel Ms. Maria Dogaru Kerman & Co LLP 200 Strand London WC2R 1DJ United Kingdom Phone: +44 20 7539 7272 Email: [email protected] [email protected] Maria. [email protected] |
Mrs Stacey Kivel Attorney at law Email: [email protected] |
5. The Respondent is the DEMOCRATIC REPUBLIC OF CONGO (the "Respondent" or the "DRC") in the person of the Minister of Justice, keeper of the seals and minister for Human Rights, Mr Alexis Thambwe-Mwamba:
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Palais de justice, 3eme Niveau,
Place de l'Indépendance
Gombe, Kinshasa
Democratic Republic of Congo
Telephone: + 243 99 99 43 284
Email: [email protected]
with copy to: [email protected]
[email protected]
6. It is represented by:
Maître André Kalenga-ka-Ngoyi
Assistant Director of the Minister of Justice, Keeper of the Seals and Minister for Human Rights
Maître Valencia Bolebe Ekosso 'Gombe
Counsel in charge of the National and International Litigation
Palais de justice, 3eme Niveau,
Place de l'Indépendance
Gombe, Kinshasa
Democratic Republic of Congo
and by its counsels:
Maître Michel Pombia-Wa-Ngoloko
91 rue Faubourg Saint-Denis
75010 Paris
ID D 2069
FRANCE
Email: [email protected]
Maître Josephe Nzau Matuta
3835 Avenue de la Douane
Gombe, Kinshasha
DEM. REP. of CONGO
email: [email protected]
7. The following are also concerned by this arbitration:
Minister of Hydrocarbons
Immeuble Cohydro, Niveau 2
1, avenue du Comité Urbain
Gombe, Kinshasha
Democratic Republic of Congo
and
The Minister of Finance
Boulevard Tshatshi, en face de la Banque Centrale du Congo,
BP 7907 Gombe, Kinshasa
Democratic Republic of Congo
8. The Applicant and the Respondent are hereinafter referred to separately as the "Party" and together as the "Parties".
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9. The Court of Arbitration (the "Court of Arbitration") is composed of three arbitrators, Mr Grégoire Bakandeja Wa Mpungu, as co-arbitrator on appointment of the Applicant, Mrs Ghizlane El Idrissi, as co-arbitrator on appointment of the Respondent, and Mrs Christine Lécuyer-Thieffry, as president by joint designation of the Parties.
10. The arbitrators' contact details are as follows:
Christine Lécuyer-Thieffry
66, rue de Monceau,
75008 Paris, France,
Phone: +33 9 72 50 43 25
Email: [email protected]
Professor Gregoire Bakandeja Wa Mpungu
PR GREGOIRE BAKANDEJA & VINCENT DE PAUL ALUMBA Associés
12 Avenue Tabu Ley (formerly Tombalbaye),
Immeuble Wassim, 2eme étage, Appartement 2
(Référence: Croisement des Avenues Kasai et Tabu Ley)
Commune de la Gombe
Kinshasa, Congo
Telephone: +243 815 093 816
Fax: +243 815 093 816
Email: [email protected]
Mrs Ghizlane El Idrissi
EL IDRISSI
Walili Street
42, Boulevard Abdelmoumen
7eme étage no. 52
Casablanca
Morocco
Tel.: +212 6 38 85 68 03
+33 6 21 24 31 02
Email: [email protected]
11. The dispute relates to two hydrocarbon resource sharing contracts that the Respondent concluded, the first on 14 December 2007, with the association formed between the Applicant and la Congolaise des Hydrocarbures ("COHYDRO"), jointly designated in said contract as the "Contractor" ("the 2007 Contract")1 And, the second, in January 2008 with the consortium consisting of the association between the Applicant and Petro SA and H-Oil Congo Limited, COHYDRO, Congo Petroleum and Gas Sprl and Sud Oil Sprl, together also referred to in this second contract as the "Contractor"
1 Production Sharing Agreement between the Democratic Republic of Congo and the Divine Inspiration Group (PTY) Ltd and la Congolaise des Hydrocarbures, Blocks 8, 23 and 24 of the Central Basin, December 2007, hereinafter "2007 Contract", Exhibit DM-VIII. ↩
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(the "2008 Contract ").2 The 2007 Contract and the 2008 Contract are also referred to hereafter as the "Disputed Contracts ".
12. The Arbitration Agreement (the "Arbitration Agreement") is contained in Article 30 "Arbitration" of each of the disputed Contracts which, in identical terms, provides:
30.1 All disputes arising out of the Contract, with the exception of those referred to in paragraphs 30.5 and 30.6 below, that will arise between "DRC" on the one hand, and "Contractor" entities on the other hand, which cannot be resolved amicably, will be settled definitively by arbitration in accordance with the Arbitration Rules of the International Chamber of Commerce of Paris.
30.2 "The DRC" on the one hand and the "Contractor" on the other hand will appoint an arbitrator and endeavour to agree on the appointment of a third arbitrator who will be the president of the court. In the absence of an arbitrator or an agreement on the third arbitrator, the provisions of the International Chamber of Commerce of Paris shall apply.
30.3 The arbitration will take place in Paris, in France, or in any other place decided by the "Contractor" and "DRC". The procedure will be in French. The arbitrator's interpretation of this Agreement must correspond to the customs and practices generally accepted in the international petroleum industry.
30.4 "The DRC" hereby irrevocably waives any immunity in proceedings relating to the execution of any arbitral award rendered by a Court of Arbitration constituted in accordance with this Article 27 (sic), including without limitation, any immunity relating to service, immunity from jurisdiction and immunity from enforcement with respect to its property, except public property of the Democratic Republic of the Congo.
30.5 If "DRC" and one of the "Contractor" entities disagree on the determination of Liquid Oil prices under Article 16, "DRC" or said entity may ask the President of the Institute of Petroleum in London, Great Britain, to appoint a qualified International Expert, to whom the dispute will be submitted. If the President of the Institute of Petroleum does not appoint a qualified Expert, each of the parties to the dispute may ask the International Centre of Expertise of the International Chamber of Commerce of Paris to make such designation. "The DRC" and said entity will provide the latter with any information they deem necessary or which the expert may reasonably request.
30.6 Within thirty (30) days of the date of his appointment, the expert shall provide "The DRC" and said Party with the price which, in his opinion, shall be used in accordance with Article 14. This price will be binding on the parties and will be deemed to have been agreed upon between them. The fees and costs of the Institute of Petroleum in London or the International Chamber of Commerce of Paris, as well as the experts will be shared equally between "the DRC" and said entity. The Expert will not be an Arbitrator, and arbitration will not be applicable in such a case.
13. Pursuant to Article 21 (1) of the Regulations, the Court of Arbitration shall apply the rules of law chosen by the Parties, in particular, to Article 27 of each of the Disputed Contracts which, in identical terms, states:
2 Production Sharing Agreement between the Democratic Republic of Congo and the Consortium Divine Inspiration Group (PTY) Ltd and Petro SA, H-Oil Congo Limited, Congolese Hydrocarbons, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Bloc 1 Graben Albertine, January 2008, hereinafter the "2008 Contract", Exhibit DM-IX. ↩
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The interpretation and performance of this Agreement shall be subject to the laws of the Democratic Republic of Congo.
14. In addition, Article 30.3 of the disputed Contracts provides in particular that:
The Arbitrator's interpretation of this Contract must be in accordance with generally accepted practices and customs of the international oil industry.
15. Finally, pursuant to Article 21 (2) of the Regulations, the Court of Arbitration "shall take into account the provisions of the contract between the parties, as the case may be, and all relevant commercial practice ".
16. On 31 October 2016, the Applicant filed a Request for Arbitration with the Secretariat dated 19 October 2016 (the "Request") and forty-two exhibits numbered from DM-I to DM-XLII, according to the attached schedule, which the Secretariat acknowledged on 2 November 2016.
17. On 16 November 2016, the Secretariat first notified the Request to the Respondent who, inter alia, was invited to submit its response by appointing a co-arbitrator and, on the other hand, invited the Applicant to appoint a co-arbitrator pursuant to section 12.4 of the Regulations.
18. On 22 November 2016, the Applicant appointed Professor Grégoire Bakandeja wa Mpungu as arbitrator.
19. On 25 November 2016, the Secretary General of the Court (the "Secretary-General") set the amount of the advance against the provision for arbitration costs in accordance with Article 36 (1) and Article 1 (2) of Annex III of the Regulation and, on 16 December 2016, the Applicant requested an extension of the deadline for the payment of this advance until the end of January 2017.
20. By letter of 2 December 2016, received by the Secretariat on 4 January 2017, the Respondent indicated that the Minister of Justice and Human Rights is the only person entitled to represent the Congolese State in a court of law and should be intimately involved in the procedure for drafting and signing the Terms of Reference, reserving the right to proceed with the appointment of an arbitrator of his choice.
21. By letter of 27 December 2016, the Respondent requested the extension until 31 January 2017 of the deadline for filing its response and, on 7 January 2017, it indicated that it was represented by Maître Michel Pombia and Maître Joseph Nzau Matuta, which the Secretariat acknowledged on 13 January 2017.
22. Following the agreement of the Parties, the Secretariat has extended until 31 January 2017 the deadline for the Respondent to submit its response ("Response") in which it acknowledged receipt of the digital version on 1 February 2017 and the hard copy on 10 February 2017.
23. On 1 February 2017, the Respondent objected to the appointment of Professor Grégoire Bakandeja wa Mpungu as the Applicant arbitrator because of his appointment in a similar case still pending, his alleged links with the applicant represented by the same counsel and the application for recusal it lodged against him in that case.
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24. Also on 7 February 2017, the Respondent nominated Mr Declerc Mavinga Ndangi as co-arbitrator whose declaration of acceptance, availability, impartiality and independence and curriculum vitae were forwarded to the Parties by the Secretariat on 2 March 2017. On 3 March 2017, the Applicant expressed doubts about the independence and impartiality of Mr Declerc Mavinga Ndangi because of his links with oil companies active in the Democratic Republic of Congo and competitors of the Applicant, which should have been disclosed and, after several exchanges between the Parties, by letter of 7 April 2017, Mr Declerc Mavinga Ndangi renounced his appointment.
25. On 25 April 2017, within the time allotted to it by the Secretariat, the Respondent nominated as co-arbitrator Mrs Ghizlane El Idrissi, whose declaration of acceptance, availability, impartiality and independence and curriculum vitae were forwarded to the Parties by the Secretariat on 5 May 2017.
26. On May 24, 2017, pursuant to article 13 (1) of the Rules, the Court (i) confirmed Mr Grégoire Bakandeja wa Mpungu as co-arbitrator on the nomination of the Applicant, (ii) confirmed Ms. Ghizlane El Idrissi as (iii) fixed the amount of the provision, and (iv) invited the Parties to appoint the Chairperson of the Court of Arbitration in accordance with the Arbitration Agreement.
27. On 22 June 2017, in the absence of any objection by the Parties to the disclosures contained in the declaration of acceptance, availability, impartiality and independence of Mrs Christine Lécuyer-Thieffry, jointly appointed by the Parties, the Secretary General confirmed her as President of the Court of Arbitration and informed the Court in accordance with Rule 13 (2) of the Regulations. On the same day, the Secretariat forwarded the file of this Arbitration to the Court of Arbitration in accordance with Article 16 of the Regulations.
28. The draft Articles of the Terms of Reference and Procedural Order No. 1 for the Conference on the Management of the Procedure under Rule 24 ("Conference No. 1") "Were submitted to the Parties on 29 June 2017.
29. The Parties proposed amendments to the Terms of Reference on 7 and 10 July 2017, and a second draft of the Terms of Reference was submitted to them on 12 July 2017. Following further amendments to the draft Terms of Reference by the Respondent, a final version was sent to the Parties on 18 July 2017.
30. After discussions between the Court of Arbitration and the Parties, on 19 July 2017, Conference No. 1 was set for 29 August 2017 in the presence of representatives of the Parties at the ICC Hearing Centre in Paris, France.
31. On 10 August 2017, the Court extended the deadline for issuing the Terms of Reference until 31 October 2017 in accordance with section 23 (2) of the Regulations.
32. On 31 July 2017, the President of the Court of Arbitration acknowledged receipt of seven copies of the terms signed by Mrs Andréa Brown, CEO of the Applicant, which were sent on 2 August 2017 to the Respondent's counsel in Kinshasa so that he could collect the signature of the authorised person in the name of the Respondent and then forward it to the co-arbitrator Mr Grégoire Bakandeja wa Mpungu for his signature.
33. The seven copies of the Terms of Reference signed by Maître Nzau Matuta for the Respondent and by Professor Grégoire Bakandeja wa Mpungu, Co-Arbitrator, were deposited in the Office of the President of the Court of Arbitration on 28 August 2017 and signed before the Conference No 1 by the other members of the Court of Arbitration. They were sent to the Secretariat for forwarding to the Court pursuant to Rule 23 (2) of the Rules of Procedure on 31 August 2017. As set out in the Terms of
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Reference, the quantified claims of the Applicants amounted to USD 5 billion and USD 50 million for the Respondent.
34. Conference No. 1, the subject of which was specified in the letter from the Court of Arbitration of 29 June 2017, concerned (i) the handing over to the Parties of their copy of the Terms of Reference, (ii) organisation of the procedure and the adoption of procedural measures complementary to those of the Rules in procedural Order No. 1 submitted to the Parties for adoption (ii) the adoption of the procedural timetable (the "Calendar of Proceedings") and (iv) any other possible questions from the Parties.
35. Procedural measures complementary to those of the Rules and the Calendar of Proceedings, adopted at Conference No. 1, were confirmed by Procedural Order No. 1 of 31 August 2017 of the Court of Arbitration and forwarded to the Secretariat by letter of the same day.
36. On 4 December 2017, the Applicant requested an extension until 28 February 2018, of the deadline for the filing of its Reply Brief fixed according to the Calendar of Proceedings as 30 December 2017 and a reorganisation of said Calendar, stating in particular that it had consulted a firm of experts to obtain a technical report and a financial report to establish the amount of damage that would only be completed on 15 February 2018 and emphasising that these reports would (i) achieve appreciable savings in time throughout the arbitration process, (ii) provide the Respondent with the information requested by it and (iii) provide the Respondent all the required elements and documents at the time of preparing its rejoinder.
37. On 5 December 2017, the Respondent objected to this request, considering it to be manifestly dilatory and seeking to delay the time allowed to the Applicant for the payment of the arbitration provision in respect of which she has repeatedly, since 22 June 2017, requested its postponement before making a partial payment on 13 October 2017 and on 19 October 2017 and 1 December 2017, requesting a new payment deadline. It further questioned the reality of this expert appraisal and asked the Court of Arbitration to refer the matter to the Secretary-General for the purposes of Rule 36 (6).
38. By letter of 7 December 2017, pursuant to Rule 36 (6), the Secretary-General (i) granted the Parties a final deadline for the payment of the balance of the arbitration provision, failing which the claims would be considered as withdrawn and (ii) invited the Court of Arbitration to suspend its proceedings.
39. On 21 December 2017, pursuant to Standing Order 36 (6), the Applicant objected to the Secretary-General's action, referring, in particular, to the fact that it had paid, on 19 December 2017, the balance of its share of the provision for arbitration costs, which the Respondent certified on the same day, and the Applicant asked the Court (i) to decide whether it was appropriate to consider applications withdrawn and (ii) set separate provisions for the main claim and the counterclaim. On the same day the Respondent announced its intention to pay its share of the provision.
40. On 28 December 2017, the Secretariat took note of the Applicant's objection to the application of Rule 36 (6), noting that the Respondent had requested a deadline for the payment of the share of the provision for arbitration costs incumbent in it, submitting a financial table corresponding to the setting of separate provisions and acknowledgment of payment by the Applicant of the balance of its share of the provision for arbitration costs.
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41. On 4 January 2018, the Applicant withdrew its request to fix separate provisions, noting that the Respondent had announced payment of its share of the Arbitration Fee and, in the event of default, agreed to stand in for the Respondent for this payment in two instalments of substantially equal amounts on 30 January and 20 February 2018.
42. On 18 January 2018, the Court decided not to apply Rule 36 (6) so that it did not consider the applications withdrawn and set a new deadline for the Respondent's payment of the balance of the provision.
43. The Respondent did not make the payment announced and ultimately it was the Applicant which paid the entire provision for the costs of the arbitration in two instalments. The Court reassessed the arbitration provision on 17 May 2018 and the Respondent again failed to pay; again, it was the Applicant which proceeded with the payment of the additional provision, the amount of which had been fixed by the Court.
44. By Procedural Order No. 2 of 31 January 2018, taking into account the decision of the Court under Article 36 (6) and the status of the proceedings, the Court of Arbitration: (i) authorised the Applicant to file a technical and financial report to establish the amount of its loss, (ii) ruled that the Schedule of Proceedings should be amended to allow the Respondent to analyse this report and comment on it before the hearing, (iii) ruled that the Case Management Conference (the "Conference No. 2") scheduled in the form of a conference call on 20 February 2018 at 15 hours, Paris time would in particular discuss the Calendar of the procedure, and (iv) invited the Parties to submit to the Court of Arbitration, no later than 15 February 2018, their respective proposals for adjusting the Calendar of the procedure.
45. On February 15, 2018, the Applicant submitted its proposals for adjusting the Calendar for Conference No. 2.
46. Since the Respondent has neither submitted to the Court of Arbitration its proposed reorganisation of the Calendar of Proceedings, nor has it responded to the Applicant's proposal, and did not join the scheduled conference call, it was agreed to adjourn Conference No. 2 and to again convene a Conference on the Management of the Procedure (" Conference No. 3" for 22 February 2018 at 10 am Paris time.
47. Following Conference No. 3, by Procedural Order No. 3 of 26 February 2018, the Court of Arbitration adopted the Calendar of the Procedure including the filing of the technical and financial report of the Applicant's expert (the "Deloitte Report") on 30 March 2018, the simultaneous exchange of a supplementary brief by each Party (the "Supplementary Brief ") on 30 April 2018 and a response to the other party's supplementary brief ("Response to the Supplementary Brief") on 30 May 2018, the hearing being set for 28 and 29 June 2018.
48. On 26 May 2018, the Applicant requested the extension to 12 June 2018 of the deadline for the filing of its Response to the Applicant's Supplementary Brief and confirmed that the hearing date remained unchanged. The Applicant did not object to this, provided that the deadline for the filing of its own Response to the Respondent's Supplementary Brief was extended accordingly; by letter of 28 May 2018, the Court of Arbitration accordingly modified, in the Calendar of the proceedings, the date scheduled for the simultaneous filing of said Replies to the Supplementary Brief of the other Party, fixing it for 12 June 2018.
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49. In accordance with the Calendar of Proceedings then applicable, on 30 October 2017, the Parties submitted, for the Respondent, a defence brief (the "Defence Brief ") accompanied by a document referenced according to the attached schedule as number DF-I and, for the Applicant, a reply brief (the "Reply Brief") accompanied by factual exhibits DM-XLIII to DM-LIV and legal documents LEX DM-I to LEXDM-VI acknowledged by the Court of Arbitration on 2 January 2018 pending the decision of the Court on the application of Rule 36 (6) of the Regulations. The Applicant's financial claims were then reduced to USD 2 billion and USD 50 million.
50. On 30 January 2018, the Respondent filed its rejoinder (the "Rejoinder"), which is not accompanied by any exhibits.
51. Pursuant to the Calendar of Proceedings, on 30 April 2018, following the filing of the Deloitte Report, including the report of Mr Anthony Charlton and its attachments and the report of Mr Robin Bertram filed in the proceedings as DM-LV to DM-LVII, the Complementary Briefs of the Parties were filed, titled, for the Applicant, "Brief on the Deloitte Report" and accompanied by DM-LVIII and DM-LIX, and, for the Respondent, a "Brief on the nullity of the 2008 Contract". The Applicant's financial claims in the context of its Supplementary Brief now amount to USD 617,400,878.
52. On 12 June 2018, the Parties filed their Response to the Supplementary Brief of the other Party, accompanied for the Applicant by DM-XL to DM-LXXVIII and LEX DM-III and LEX DM-VII to LEX DM-IX, the Respondent's Response to the Applicant's Supplementary Brief not being accompanied by any exhibit, the Respondent stating that even if it does not agree with the conclusions of the Deloitte Report, it nevertheless finds it inopportune to produce another expert report.3
53. Following the fourth Conference on Management of the procedure of 6 June 2018, ("Conference No. 4"), convened to discuss the organisation of the hearing, the Calendar of the hearing and in particular the rules applicable to the interviewing of the expert (s) known to the Parties was adopted by Procedural Order No. 4 of 11 June 2018.
54. In accordance with Rule 26 of the Rules of Court and the Calendar of Proceedings, the hearing was held on 28 and 29 June 2018 (the "Hearing"), with the agenda of (i) the introductory pleadings of the Parties, (ii) the presentation by the expert, Mr Anthony Charlton, of his report communicated on 30 March 2018 (the "Deloitte Report") and the questions of the Parties and the Court of Arbitration on this report, (iv) the closing arguments of the Parties and (v) any questions of the Court of Arbitration and the organisation of further proceedings.
55. The Hearing took place at the ICC Hearing Centre, with the Parties being represented by: (i) for the Applicant, Vincent Cassiers, Attorney, SYBARIUS, Andrea Brown, DIGOil CEO Mrs Stacey Kivel , Counsel, DIGOil's usual counsel, Mrs Steffi Spitznagel, Lawyer, Kerman & Co LLP, Mrs Maria Dogaru, Paralegal, Kerman & Co LLP and (ii) for the Respondent, Maître Michel Pombia, Counsel, the other counsel of the Respondent, Master Nzau Matuta and Master Valencia Bolebe Ekosso 'Gombe were unable to get visas in time. As agreed with the Parties, the Expert's presentation of the Deloitte Report and the interviews at the Hearing were audio-recorded and handed over to the representatives of the Parties after the hearing.
56. At the beginning of the Hearing, on 28 June 2018, reference was made (i) to the request submitted the day before by the Applicant requesting the authorisation to attach to its schedule of exhibits the
3 Response to the Supplementary Brief, 12 June 2018, para.23. ↩
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consultation of Master Alex Kabinda Ngoy, Professor at the faculty of Lubumbashi University and Lubumbashi Bar, on the impact of the Presidential Order of Approval of the Petroleum Agreements on the latter, to which the Respondent objected and (ii) the claim of inadmissibility, based on Article 23 of the Regulations, of the Respondent's Application to Declare the Applicant's claims inadmissible on the grounds that the Disputed Contracts were concluded between the Respondent on the one hand and, on the other hand, two "associations" of which the Applicant was only one of the entities, such that It would have been necessary for the Applicant to subpoena the other entities of the association.
57. Following the proceedings, by Procedural Order No. 5 of 2 July 2018, the Court of Arbitration:
(a) INVITED the Respondent (i) to confirm in writing to the Court of Arbitration the withdrawal of its claim of inadmissibility referred to in paragraph 56 above and its counterclaim and (ii) to produce the doctrinal elements referred to in the footnotes of pages 5 and 7 of its Response to the Supplementary Brief of 12 June 2018;
(b) AUTHORISES (i) the Applicant to produce, at its earliest convenience, the consultation of Maître Alex Kabinda Ngoy and, (ii) within fifteen days of the production of this consultation, the Respondent to submit all elements of Congolese law in support of its arguments that the approval of an oil convention falls within the discretion of the President of the Republic, and the 2008 Contract was obsolete;
(c) INSTRUCTS the Parties to submit to the Court of Arbitration their quantified claims for reimbursement of the costs and expenses incurred by them in their defence and all supporting documents by 31 August 2018;
(d) RULES that the Calendar of Procedure is amended in accordance with the provisions of paragraph (b) above.
58. On 4 July 2018, the Applicant submitted as Exhibit DM-LXXIX the consultation of Maître Alex Kabinda Ngoy and corrected a spelling error appearing in the recital of its Response to the Supplementary Brief of 12 June 2018. On 16 July 2018, the Respondent (i) confirmed the withdrawal of its claim of inadmissibility under paragraph 57 (a) above and its counterclaim and (ii) on the question of the impact of the absence of a Presidential Order concerning Approval of Oil and Gas Contracts, produced a judgment of the High Court of Justice of the British Virgin Islands of 19 November 2010 as Exhibit DEP II, and announced the forthcoming production of the judgment of the Supreme Court of Justice of the Democratic Republic of Congo of 10 December 2010 as Exhibit DEF III, decisions it had raised in the Hearing.
59. By letter of 25 July 2018, the Court of Arbitration authorised the Applicant and the Respondent to provide written submissions solely on the three documents filed by the Parties in accordance with Procedural Order No. 5 of 2 July 2018, as soon as possible and no later than 31 July 2018 at midnight.
60. Following the communication by the Parties of their comments within the time allowed, by email of 1 August 2018, (i) the Respondent applied for approval of the Court of Arbitration to comment on the documents accompanying the observations of the Applicant (ii) the Applicant objected to an additional exchange of observations in this case; and (iii) the Respondent maintained its position by requesting that any refusal decision by a Court of Arbitration be subject to an order.
61. By reasoned Procedural Order No. 6 of 2 August 2018 the Court of Arbitration:
(t) AUTHORISED the Respondent to communicate its comments on the Tullow Contract of 2006 and the Ministerial Order of 17 October 2007 and only on these two documents, without it being able to rely on any material or facts which have not already been submitted to the debate;
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(b) RULES that the Respondent's comments will be submitted no later than 6 August 2018.
62. The Respondent's latest submissions regarding, among other things, the 2006 Tullow Contract and Ministerial Order of 17 October 2007 were submitted on 6 August 2018.
63. By Procedural Order No. 7 of 10 August 2018, in accordance with Rule 27 of the Rules, the Court of Arbitration:
(a) ORDERED the closing of the debates;
(b) REMINDED the Parties that no arguments or pleadings may be presented, nor any additional evidence produced except at the request or with the authorisation of the Court of Arbitration.
64. On 31 August 2018, in accordance with Procedural Order No. 5, the Applicant submitted a note of observations on the reimbursement of the costs and expenses it incurred in its defence and the supporting documents relating thereto, and after extension of the deadline by the Court of Arbitration the Respondent submitted its own cost elements on 15 September 2018.
65. The deadline within which the Court of Arbitration must make the Final Award that the Court originally set according to the Calendar of Proceedings at its session on 14 September 2017 to 29 June 2018, was extended by the Court in accordance with Rule 30 (2), at its session of 14 June 2018, until 28 September 2018 and at its meeting of 13 September 2018, until 30 November 2018.
66. In accordance with Article 27 of the Rules, on 10 August 2018, the Court of Arbitration informed the Parties that it intended to submit the draft Final Award to the Court for approval by the end of October or the beginning of the month of November 2018.
67. In accordance with Rule 33 of the Regulations, the draft Final Award was approved by the Court at its meeting of 25 October 2018.
68. The 2007 Contract4 was concluded on 14 December 2007 between, on the one hand, the Respondent and the association constituted between, secondly, the Applicant and, thirdly, the Congolaise des Hydrocarbures ("COHYDRO"), the second and third parties being referred to as the "Contractor".
69. This is a production sharing contract for hydrocarbon resources in blocks 8, 23 and 24 of the Central Basin whose purpose, according to its article 2, is “the awarding to the Contractor" by the Democratic Republic of the Congo, of exclusive rights of recognition and exploration of hydrocarbons as well as the right to obtain Exploitation Permits within the limits of ZERE"5 (the "Exclusive Zone of Recognition and Exploration").Under the 2007 Contract, the Applicant was to carry out various oil works aimed at discovering and exploiting hydrocarbon deposits.6, the revenue from this exploitation to be shared with the Democratic Republic of Congo7
4 2007 Contract, Exhibit DM-VIII. ↩
5 2007 Contract, Section 2, Exhibit DM-VIII. ↩
6 2007 Contract, Article 10, Exhibit DM-VIII. ↩
7 2007 Contract, Clauses 14 and 15, Exhibit DM-VIII. ↩
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70. The 2008 Contract8 was concluded in January 2008 between, on the one hand, the Respondent and, on the other hand, the consortium consisting of the association between the Applicant and Petro SA and H-Oil Congo Limited, COHYDRO, Congo Petroleum and Gas Sprl and Sud Oil Sprl. It is also a production sharing contract the purpose of which is similar to that of the 2007 Contract except for the ZERE concerned which concerns block 1 of the Albertine Graben. The 2008 Contract further provides for the payment (i) of a "signing bonus" for the amount of $ 2,500,000.⁹ and (ii) USD 1,500,000 upon signature of the Quality, Health, Safety, and Environment (“QHSE ") contract.10 These two payments totalling US $ 4,000,000 were made by the Applicant to the Respondent, 11following which, by letter of 25 April 200812, the Ministry of Hydrocarbons of the Democratic Republic of Congo authorised the Applicant to start the installation of works for block 1 of the Albertine Graben.
71. While the oil work was being carried out under the 2008 Contract, by letter of 5 July 2010,13 the Respondent informed the Applicant that Caprikat Ltd and Foxwhelp Ltd had been awarded the production sharing contract on blocks I and II of the Albertine Graben (the "Caprikat Contract"), said contract being approved by Ordinance No. 10/041 of 18 June 2010 in accordance with Article 79 of Ordinance-Law No. 81-013 of 2 April 1981 on general legislation on mines and hydrocarbons.
72. After denouncing this unilateral termination of the 2008 Contract and unsuccessfully requesting a hearing with the Prime Minister of the Democratic Republic of Congo, by letters of 12 August 201114, 7 September 201015 and 17 September 201016, the Applicant, by letter of 21 September 21, 201017 , contacted the President of the Republic, referring to its letter of 14 July 2010 (not produced) in which it explained that the approval of the Caprikat Contract infringed its rights under the 2008 Contract, having met all its contractual obligations and, in particular, paid various amounts for a total of US $ 4,000,000 excluding interest and spent US $ 12,550,000 on petroleum works over the past two years following the authorisation issued in April 2008. It therefore requested the cancellation of Ordinance No. 10/041 approving the Caprikat Contract.
73. In its aforementioned letter of 21 September 2010, the Applicant also proposed an amicable solution to the dispute including (i) the issuance by the Respondent and the publication of the
8 2008 Contract, Exhibit DM-IX. ↩
9 2008 Contract, Article 12.9, Exhibit DM-IX. ↩
10 2008 Contract, Article 5.6, Exhibit DM-IX. ↩
11 Debit Slip No. / E-H/SGH/DLN/059/2008 of the General Secretariat of the Ministry of Hydrocarbons of the Democratic Republic of Congo dated 25 February 2008, Exhibit DM X; Encashment slip No. 320551 for an amount of $ 2,500,000 from 21 March 2008, Exhibit DM XI; Certificate of payment of $ 2,500,000 established by Rawbank SARL dated 31 March, 2008, Exhibit DM XII. ↩
12 Letter from the Minister of Hydrocarbons to DIGOIL dated 25 April 2008, Exhibit DM-XIII. ↩
13 Letter of 5 July 2010 from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOIL, Exhibit DM-XV. ↩
14 Letter of 12 August 2010 from DIGOIL to the Prime Minister of the Democratic Republic of Congo, Exhibit DM-XVI. ↩
15 Letter of 7 September 7, 2010 from DIGOIL to the Prime Minister of the Democratic Republic of Congo, Exhibit DM-XVII. ↩
16 Letter of 17 September 2010 from DIGOIL to the Prime Minister of the Democratic Republic of Congo, Exhibit DM-XVIII. ↩
17 Letter of 21 September 2010 from DIGOIL to the President of the Democratic Republic of Congo, Exhibit DM-XIX. ↩
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Presidential Ordinance referred to in Article 34 of the 2007 Contract, (ii) the grant to the Applicant of a new block 9 in the central basin and / or a new block, "Fosse de Borna" and (iii) the refund to the Applicant of the sums collected in respect of block 1 of the Albertine Graben in the framework of the 2008 Contract18. It requested the conclusion of a settlement agreement. On 23 October 2010, the Minister of Hydrocarbons told the Applicant that he considered that the principle of compensation suggested could be adopted. 19
74. Following a hearing granted by the Prime Minister to the Applicant's CEO, during which the latter informed him of the amount of its claim, on 16 November 2010, the Prime Minister of the Democratic Republic of Congo confirmed his agreement to the reimbursement of the sums owed by the Respondent to the Applicant by way of offsetting with the other financial obligations of the Applicant in accordance with the 2007 Contract and gave instructions to "resolve this case amicably". 20
75. A conciliation meeting was therefore organised from 9 to 17 December 2010 in the Ministry of Hydrocarbons in the presence of representatives of the President of the Republic, the Prime Minister, the Ministry of Hydrocarbons, the Ministry of Finance and the Applicant. The minutes of this meeting21 show that "the claims of the Applicant are legitimate" and that:
(i) the Respondent's debt in respect of the Applicant amounted on that date to 4,450,000 USD, or: 2,500,000 USD signing bonus, 1,500,000 USD for QHSE and 450,000 USD interest on the QHSE amount (30% of 1,500,000 USD);
(ii) the reimbursement of the signing bonus of 2,500,000 USD by the Respondent to the Applicant would be made in the form of a tax credit to deduct this amount from future tax obligations of the same nature owed by the Applicant including the signing bonus of the 2007 Contract,
(iii) the balance of US $ 1,950,000 would be repaid by the Respondent to the Applicant to offset the Applicant's other financial obligations arising from the execution of the 2007 Contract, and
(iv) the Respondent would take the necessary steps for the execution of the 2007 Contract, which should give rise to the Applicant's financial obligations which would make it possible to offset the Respondent's debts to it.
76. The Minister of Hydrocarbons not having implemented this amicable settlement, reminders were sent to him on 7 February 2011, by the Minister of Finance22 and on 22 March 2011, by the Applicant23 which further indicated that the amount of the Respondent's debt now amounted to 4,800,000 USD.
18 This is the signature bonus ($ 2,500,000) and the execution of financial obligations relating to HQSE ($1,500,000) with interest. ↩
19 Letter of 23 October 2010 from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOIL Exhibit DM-XX. ↩
20 Letter of 16 November 2010 from the Prime Minister of the Democratic Republic of Congo to the Minister of Hydrocarbons and the Minister of Finance of the Democratic Republic of Congo Exhibit DM-XXI. ↩
21 Minutes of the Democratic Republic of Congo (Ministry of Hydrocarbons) on the compensation to be operated by the Congolese State in favour of Divine Inspiration Group from 9 to 17 December 2010, Exhibit DM-XXII. ↩
22 Letter of 7 February 2011 from the Minister of Finance of the Democratic Republic of Congo to the Minister of Hydrocarbons, Exhibit DM-XXIII. ↩
23 Letter of 22 March 2011 from DIGOIL to the Minister of Hydrocarbons and the Minister of Finance of the Democratic Republic of Congo, Exhibit DM-XXIV. ↩
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77. On 19 October 2011, the Director General of the General Directorate of Administrative, Judiciary, National, and Participation Revenue (" DGRAD ") of the Democratic Republic of Congo confirmed the establishment of the proposed offsetting mechanism24 and, on November 17, 2011, acknowledged receipt of payment by the Applicant of the sum of 2.500.0 USD, in accordance with the 2007 Agreement.25
78. The signing bonus for the three blocks of the Central Basin amounting to $ 1,000,000 per block, or $ 3,000,000 in total, and the offsetting mechanism applying only to debts of the same nature, it was capped at 2,500,000 USD so that the Applicant paid an additional sum of 500,000 USD to the Respondent on 16 March 201226, the corresponding debit slip having been cleared on 21 March 2012.27
79. On 23 March 2012, DGRAD confirmed the allocation of $ 2,500,000 paid on 22 March 2008 by the Applicant to the signing bonus of the 2007 Contract.28
80. The authorisation to start the aeromagnetic and gravimetric acquisition of blocks 23 and 24 of the central basin was given by the Minister of Hydrocarbons on 23 June 201229 and, following the solicitation of the Applicant by letter of July 18, 2012,30 and 30 July 2012,31 The Minister of Hydrocarbons confirmed to the Applicant that he instructed the Secretary General to appoint two experts to assist him in the overhead work scheduled for August 15, 2012.
81. The Respondent then delayed the execution of the 2007 Contract because of the preparation of a new law on the general hydrocarbons regime.32 Then, after the promulgation thereof on 1 April 201533, pending the Prime Minister's Decree on Hydrocarbons Regulation.34
82. On 6 April 2016, 35the Applicant put the Respondent on notice to execute the 2007 Agreement. On 6 May 2016, the Minister of Hydrocarbons informed the Applicant that Decree No. 16/010 on the
24 Letter from the Director General of the General Directorate of Administrative, Judicial, National and Participatory Revenue (abbreviated "DGRAD") of 19 October 2011 to the Minister of Finance of the Democratic Republic of Congo, Exhibit DM-XXVII. ↩
25 Letter from the General Directorate of Administrative, Judicial, Public and Participatory Revenue (abbreviated "DGRAD") of 17 November 2011 to DIGOIL, Exhibit DM-XXIX. ↩
26 Debit slip No. 322569 in the amount of 500,000.- USD of 16 March 2012, Exhibit DM-XXX. ↩
27 Certificate of payment in the amount of 500,000 USD issued by Rawbank SARL on 16 March 2012, Exhibit DM-XXXI. ↩
28 Letter from the General Directorate of Administrative, Judicial, Public and Participatory Revenue (abbreviated "DGRAD") of 23 March 2012 to DIGOIL, Exhibit DM-XXXII. ↩
29 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo dated 23 June 2012 to DIGOIL, Exhibit DM-XXXIII. ↩
30 Letter from DIGOIL dated 18 July 2012 to the Director General of the Civil Aviation Authority, Exhibit DM-XXXIV. ↩
31 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo of 30 July 2012 to DIGOIL, Exhibit DM-XXXV. ↩
32 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo dated 9 May 2015 to DIGOIL Letter, 9 May 2015, Exhibit DM-XXVI. ↩
33 Law No. 15/012 on the general hydrocarbons regime, 1 August 2015, exhibit LEX DM-V. ↩
34 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo of 5 December 2015 to DIGOIL, Exhibit DM-XXXVII. ↩
35 DIGOIL letter of 6 April 2016 to the Minister of Hydrocarbons of the Democratic Republic of Congo and the Prime Minister, Exhibit DM-XXVIII. ↩
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Hydrocarbons Regulations had been issued by the Prime Minister on 19 April 2016 and invited it to a meeting to draw up an inventory of the case.36
83. A first meeting was held between the Applicant and the Minister of Hydrocarbons on May 14, 2016, during which the Applicant presented the reasons that led it to serve notice on the Respondent given the failure by the latter, 9 years after the signature of the 2007 Contract, to have issued its order of approval. The Ministry of Hydrocarbons justified this failure by the necessity to draft the implementing texts of the law of 1 April 2015, and indicated that the new mapping of the central basin shows that blocks 8, 23 and 24 were allotted to the Applicant and will return to it, each block to be the object of production sharing Contract, and that the terms of offsetting the sums already perceived or the moratorium to be granted will be the subject of negotiations between experts. The Applicant, for its part, claimed the approval of the 2007 Contract by presidential decree, especially since it received a commencement of execution authorised by the Minister of Hydrocarbons.
84. During a second meeting held between the Applicant and the counsels of the Minister of Hydrocarbons on 18 May 2016, the Applicant maintained its request for the issuance of the 2007 Contract Approval Order and reiterated the terms of its formal notice, reserving the right of recourse to arbitration for any losses.37
85. On May 19, 2016, the Minister of Hydrocarbons acknowledged receipt of a feasibility study for the construction of a pipeline / Albertine Graben sent by the Applicant which, according to the Respondent, "comes at just the right time to provide solutions to the problem of the disposal of Congolese crude to be produced in the Albertine Graben", underlining that the report expected by the Ministry is the responsibility of the latter.38
86. All amicable proceedings yet to produce concrete effects on the execution of the 2007 Contract, the Applicant filed the Application on 19 October 2016.
87. The Applicant claims that the Respondent was guilty of two shortcomings. The first consisted of deciding to allocate block 1 of the Albertine Graben to another consortium, Caprikat Ltd and Foxwhelp Ltd, thereby unilaterally terminating, in an inadvertent and unlawful way, the 2008 Contract which had been concluded on an exclusive basis with the Applicant for an exploration period of 5 years and renewable twice, and which provided for the issue, if applicable, of an Exploration License for an initial period of 20 years.39 The second consisted of failing to issue the Presidential Order approving of the 2007 Contract.
88. According to the Applicant, the breach of its contractual obligations by the State constitutes serious breaches of its contractual obligations, justifying the termination of the 2007 Contract and the 2008 Contract at the cost of the Respondent pursuant to Article 82 of the Decree of July 30, 1888, and full compensation for the Applicant's loss in accordance with Articles 45 and 47 of the Decree of 20 July 1888.
36 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo dated May 6, 2016 to DIGOIL, Exhibit DM-XL. ↩
37 Minutes of the meeting of the experts of the Ministry of Hydrocarbons and the company Divine Inspiration, DIGOIL on the production sharing contract for blocks 8, 23 and 24 of the Central Basin, Exhibit DM-XLI. ↩
38 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo dated 19 May 2016 to DIGOIL, Exhibit DM-XLII. ↩
39 2008 Contract, Clauses 9 and 10.4, Exhibit DM-IX. ↩
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89. Based on the Deloitte Report, the Applicant quantified the loss as $ 617,400,878, consisting of $ 597,847,994 in lost revenue calculated using the discounted cash flow method and $ 19,552,884 for expenditure incurred. It further claims compensation for all the costs and expenses relating to the expert report that gave rise to the Deloitte Report and asks the Court of Arbitration to attach reasonably calculated interest to any award.
90. The Respondent submits that the 2008 Contract was not terminated, that it was not in force when the Caprikat Contract was approved and, assuming it were in force, that the offsetting mechanism, the principle of which was accepted by mutual agreement of the Parties at the meeting from 9 to 17 December 2010 and was effective on 23 March 2012, when "DGRAD confirmed the allocation of 2.5 million USD paid on March 22, 2008 by the plaintiff to the signing bonus of the 2007 contract”40 extinguished the reciprocal obligations of the Parties under the 2008 Agreement. In the alternative, it submits that the fact that the 2008 Contract was ignored by the Parties for several years rendered the latter inoperative. It points out that, as a result of the amicable settlement that began on 17 December 2010 and was executed on 23 March 2012, the 2008 Contract was no longer executed and that any execution became impossible, the bonus of $ 2,500,000 paid under this contract having been allocated to the 2007 Contract.41 As a result, the Respondent did not commit any breach, so that no compensation could be awarded under the 2008 Contract.
91. With regard to the 2007 Contract, it contends that it was from the confirmation of the compensation by the Minister of Finance on 26 August 2011 that the Respondent was bound by an obligation to issue the Presidential Order. It alleges that "the approval of an oil convention is within the discretionary power of the President of the Republic [and that] the oil production sharing contract is a convention concluded on a condition precedent".42 According to the Respondent, since no deadline is fixed by a legal or regulatory provision for the issue of the presidential order, no fault can be attributed to it.
92. If the Court of Arbitration were nevertheless to find there had been a breach attributable to it, the Respondent concedes that the damage suffered by the Applicant is direct but contests its certainty. According to the Respondent, the Applicant's loss must be regarded as a loss of opportunity in not having obtained the expected profits, for the assessment of which the Court of Arbitration must take into account (i) the existence of a serious chance of success on the one hand, and (ii) the seriousness and permanent nature of the loss of opportunity on the other. On this last point, it emphasises that the opportunity of making a profit is not irretrievably lost, as the President of the Republic can at any time approve the Contract of 2007 by order, unless the Applicant, by maintaining its request for termination, makes this loss of opportunity permanent. It is therefore up to the Court of Arbitration to appraise the merits of the calculation of the experts made on the basis of probable reserves that may change as a result of drilling and to determine the fraction corresponding to the loss of opportunity.
93. The Respondent opposes the reimbursement of expenses for an appraisal that has not been ordered by the Court of Arbitration and the payment of interest that was not provided for in the 2007 Contract and / or the 2008 Contract.
40 Letter from the General Directorate of Administrative, Judicial, National and Participatory Revenue (abbreviated "DGRAD") of 23 March 2012 to DIGOIL, Exhibit DM-XXXII. ↩
41 Supplementary Brief, 26 April 2018, p. 4. ↩
42 Response to the Supplementary Brief, 12 June 2018, para. 17. ↩
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94. In its Response to the Supplementary Brief, the Applicant seeks an award by which the Court of Arbitration:
- HEREBY DECLARES that the Democratic Republic of Congo has committed a mistake in failing to execute the Production Sharing Agreement concluded between the Democratic Republic of Congo and the Divine Inspiration Group (PTY) Ltd and la Congolaise des Hydrocarbures Association, Blocks 8, 23 and 24 of the Central Basin (14 December 2007) and the Production Sharing Agreement between the Democratic Republic of Congo and the Divine Inspiration Group Consortium (PTY) Ltd and Petro SA, H-Oil Congo Limited, Congolaise des Hydrocarbures, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Bloc 1 Graben Albertine (21 January 2008) by failing to issue to DIGOil within a reasonable time the presidential order approving said Contracts.
- HEREBY DECLARES that the Democratic Republic of the Congo has committed a breach by purporting to terminate unilaterally, or in the alternative claiming to render null and void by causing the disappearance of its purpose, the Production Sharing Contract concluded between the Democratic Republic of Congo and the Divine Inspiration Group Consortium (PTY) Ltd and Petro SA, H-Oil Congo Limited, La Congolaise des Hydrocarbons, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Bloc 1 Graben Albertine (21 January 2008) on 5 July 2010 after reassigning Albertine Block 1 Graben to Caprikat Ltd and Foxwhelp Ltd.
- ORDERS the termination, at the exclusive cost of the Democratic Republic of Congo, of the Production Sharing Agreement concluded between the Democratic Republic of Congo and the Divine Inspiration Group (PTY) Ltd and la Congolaise des Hydrocarbures, Blocks 8, 23 and 24 of the Central Basin (14 December 2007) and the Production Sharing Agreement between the Democratic Republic of Congo and the Consortium Divine Inspiration Group (PTY) Ltd and Petro SA, H-Oil Congo Limited, la Congolaise des Hydrocarbures, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Bloc 1 Graben Albertine (21 January 2008), or alternatively UPHOLDS the impossibility of executing these contracts because of the wrongful conduct of the Democratic Republic of Congo;
- ORDERS, the Democratic Republic of Congo to fully indemnify DIGOIL for all the damages that DIGOIL suffered as a result of the non-execution and the termination of the aforementioned production sharing agreements, concluded on 14 December 2007 and on 21 January 2008, or in the alternative, the impossibility of executing them, including, but not limited to, all the expenses incurred by DIGOIL under said contracts valued at 19,552,884 .- USD (nineteen million five hundred and fifty-two thousand, eight hundred and eighty-four US dollars) and for the loss of earnings of DIGOIL, valued at 597,800,000 .- USD (five hundred and ninety-seven million eight hundred thousand US dollars).
- ORDERS the Democratic Republic of the Congo to pay compensation to DIGOIL in the amount of USD 617,400,878 (six hundred and seventeen million, four hundred thousand, eight hundred and seventy-eight US dollars) to compensate for the loss it has, by its fault, caused DIGOil, plus interest at the rate calculated at the rate of return of US Treasury bonds over a 20-year period, plus two percent from the date of the award until the date of full payment;
- ORDERS the Democratic Republic of Congo to pay full costs and expenses of the arbitration, provisionally estimated at 1,900,000 .- USD (one million nine hundred thousand US dollars), and accordingly, as of the first award to be handed down, orders the Democratic Republic of Congo to pay to DIGOil (i) the sum of 600,0000 (sic) USD (six hundred thousand US dollars) assessed provisionally corresponding to the provision for arbitration fees paid by DIGOil and (ii) ) $ 300,000 (five hundred
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thousand dollars)43 assessed on a provisional basis corresponding to the experts' fees incurred by DIGOil and (iii) the amount of USD 1,000,000 assessed provisionally corresponding to the defence costs incurred by DIGOil in the arbitration proceedings, all plus interest at the rate calculated on the rate of return of US Treasury bonds 20 years, plus two percent from the date of the award until the date of full payment,
- DECLARES all requests from the Democratic Republic of Congo inadmissible or at least unfounded.
95. On 4 July 2018, the Applicant confirmed the correction, made to the Hearing, of the drafting error appearing under the fourth indent of the recital of its Response to the Supplementary Brief of 12 June 2018 and indicated that the amount of $ 597,800,000 USD (five hundred and ninety-seven million eight hundred thousand US dollars) should read 597,847,994 USD (five hundred and ninety-seven million eight hundred and forty-seven thousand nine hundred and ninety-four dollars) in accordance with the Deloitte Report44, so the total sum claimed is $ 617,400,878.
96. The Respondent asks the Court of Arbitration to:
1. PRINCIPLE CLAIM
2. IN THE ALTERNATIVE AND UNLIKELY SCENARIO
43 The amount in figures and the amount in words of the provision claimed by the Claimant are taken from the recital on page 83 of its Response to the Supplementary Brief. ↩
44 Letter from Maître Cassiers to the Court of Arbitration, 4 July 2018. ↩
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97. The Court of Arbitration notes, on the one hand, that the Respondent has raised two pleas of inadmissibility, claiming, in the first place, that because the Disputed Contracts were between, on the one hand, the Respondent and two "associations" of which the Applicant was one of the entities so that it would have been necessary for the Applicant to subpoena the other entities members of these associations45 (the "First plea of inadmissibility") and, secondly, the allegedly premature nature of the claims against it, so that the parties should be sent back to continue negotiations according to a timetable to be defined by the Court of Arbitration.46 (the "Second plea of inadmissibility").
98. Moreover, in its Response to the Supplementary Brief, the Respondent indicates that it extends in full, mutatis mutandis, all of its other previous requests as summarised in the Terms of Reference and its various pleadings, which includes (i) the counterclaim for damages compensating the financial, moral and image damage that the Applicant had caused it by prematurely seizing the Court of Arbitration which it provisionally fixed at the sum of 50,000,000 USD47 and (ii) its request concerning the costs and the costs of the arbitration for which it specifies that it relies on the wisdom of the Court of Arbitration.48
99. However, as noted in paragraph 58 above, on 16 July 2018, the Respondent confirmed the withdrawal announced at the Hearing (i) of its first plea of inadmissibility and (ii) its counter-claim, and requested that it be acknowledged.
100. The Court of Arbitration will successively examine two preliminary questions (A), the consequences of the non-issuance of the Presidential Order for the approval of petroleum contracts (B), the execution of the disputed Contracts (C), the consequences of possible non-performance, (D) the costs of Arbitration (E) and interest (F).
101. The pleas of inadmissibility raised by the Respondent are likely to have an impact on the ratione personae jurisdiction of the Court of Arbitration (1) and on the content of the applicable law (2) which must be examined beforehand.
102. The validity of the Arbitration Convention and the ratione materiae jurisdiction of the Court of Arbitration are not in dispute. On the other hand, the Respondent requests that it be given notice of the withdrawal of its first plea of inadmissibility which concerns the standing of the Applicant and the
46 Terms of Reference, 29 August 2017, para. 70. ↩
47 Terms of reference, 29 August 2017, paras. 71, 75 and 76. ↩
48 Response to the Supplementary Brief 12 June 2018, paras. 56-58. ↩
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identification of the parties to the Arbitration Agreement49, so that it concerns the ratione personae jurisdiction of the Court of Arbitration which it is up to the Court of Arbitration to verify.
103. The Respondent abandoned this first plea of inadmissibility after the Applicant rightly argued (i) that the "associations" mentioned in the Disputed Contracts are de facto associations without legal personality which as such, do not have rights or obligations and do not have the capacity to take legal action, and (ii) each entity comprising each association has personally signed the 2007 and / or the 2008 Agreement as the case may be, and is directly and personally vested with the rights and obligations arising for each of them in each of the Contracts in question. In addition, pursuant to Article 100 of the Decree of 30 July 188850, the joint and several liability of the entities concerned cannot be presumed, so that the common law regime of obligations in Congolese law is that of the joint obligation and not that of the joint and several obligation, and none of the disputed Contracts expressly stipulates joint and several liability with regard to the obligations it contains. The Court of Arbitration considers that the Applicant therefore has standing, and standing to act alone in Arbitration to assert its rights resulting from the disputed Contracts.
104. The Court of Arbitration acknowledges the Respondent's withdrawal of its first plea of inadmissibility.
105. The Respondent's second plea of inadmissibility, alleging that the Claim was premature, essentially bears on the 2007 Contract. The Respondent argues that further negotiations between the Parties would be required to determine the consequences of the adoption of Law No. 15/012 of 1 August 2015 on the general hydrocarbons regime (the "2015 Act")51 on the 2007 Contract,52 and that the approval of this contract by order of the President of the Republic may still take place, or Ordinance-Law No. 081-013 of 2 April 1981 on General Legislation on Mines and Hydrocarbons (the "Law of 1981")53 nor the 2015 Law imposing a time limit for its issuance. The Court is therefore required to review the transitional provisions of the 2015 Act.
106. The Applicant submits that the 2015 Law does not apply to the Disputed Contracts. It submits its own documents against the Respondent, in particular the "Note to the Government" from the Ministry of Hydrocarbons dated 18 October 201754 and avails itself of the legal stability clause in Article 28 of each of the Disputed Contracts and the transitional provisions of the 2015 Law.55
107. The Court of Arbitration notes that the Parties have expressly chosen the law applicable to each of the Disputed Contracts, Article 27 of which states that "the interpretation and performance of this Contract shall be subject to the laws of the Democratic Republic of Congo". The Applicant further argues that the Respondent was represented in each of the Disputed Contracts by the Minister of
49 In support of the first plea of inadmissibility, the Respondent stated that "even if the opposition of interests between the Claimant and the other member companies of the consortium is not duly characterised, it is still appropriate to state that the proceedings brought to their attention are in the foreground." The Respondent has therefore challenged the ability of the Claimant to act alone in the Arbitration. ↩
50 Article 100 of the Decree of 30 July 1888 states that "joint and several liability cannot be presumed; it must be expressly stipulated ". ↩
51 Law No. 15/012 on the general hydrocarbons regime, 1 August 2015, Exhibit LEX DM-V. ↩
52 Response, 30 January 2017, p. 3. ↩
53 Ordinance-Law No. 081-013 on General Legislation on Mines and Hydrocarbons, 2 April 1981, Exhibit LEX DM-I. ↩
54 "Note to the Government" from the Ministry of Petroleum, 18 October 2017, Exhibit DF-I ↩
55 Response to the Supplementary Brief, 12 June 2018, paras. 317-326. ↩
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Hydrocarbons and the Minister of Finance "acting under the statutory powers as they result from the Ordinance-Law No. 081-013 of 2 April 1981 on General Legislation on Mines and Hydrocarbons."
108. In addition, the explanatory memorandum of the 2015 Law affirms the "principle according to which the hydrocarbon rights regularly acquired before the entry into force of this law retain their validity and until their expiry. Upon their renewal they will be governed by the provisions of this law." 56 This principle has been translated extensively into Article 189 of the 2015 Law "subject only to compliance with the provisions relating to environmental protection, safety and hygiene which are of immediate application."57 However, pursuant to section 79 of the Act of 198158, the Disputed Contracts are indeed agreements granting mineral rights for hydrocarbons. Their handover was initiated by the Ministry of Hydrocarbons and signed by the Minister of Hydrocarbons and the Minister of Finance, and it is not alleged that the Applicant's rights under the disputed contract were improperly acquired.
109. The Applicant also relies on the legal stability clause in Article 28 of each of the Disputed Contracts59 worded as follows:
Without prejudice to article 84 of the Law, throughout the duration of the Contract, "the DRC" guarantees to the "Contractor" the stability of the general legal, financial, petroleum, customs and economic tax conditions in which each entity carries out its activities, as its conditions result from the legislation and regulations in force on the date of signature of the contract.
Consequently, the rights of each of the entities making up the 'Contractor' will in no way be subject in any area to an aggravating measure in relation to the regime defined in the above paragraph.
However, it is understood that each entity composing the 'Contractor' may benefit from any measure that would be favourable to it in relation to the regime defined above.
110. The "Law" is defined in Article 1.17 of the 2007 Contract as "Ordinance-Law No. 081-013 of 2 April 1981 on General Legislation on Mines and Hydrocarbon " and Article 1.18 of the 2008 Contract as "Ordinance-Law No. 081-013 of 2 April 1981 on General Legislation on Mines and Hydrocarbons and Ordinance No. 67-416 concerning Mining Regulations."
111. As a result, the Parties have contractually departed from the transitional provisions of the 2015 Act only on the assumption that it has a favourable impact on the situation of an entity of the Contractor.
112. However, if the Respondent claims that the adoption of the 2015 Law could have an impact on the Disputed Contracts and more particularly on the 2007 Contract, which, in its view, would justify the delay in issuing the order for approved by the President of the Republic, it does not specify what these consequences would be, except to indicate, on the contrary, that the 2015 Law, like the 1981 Law, provides that the oil or hydrocarbon agreements only take effect after approval by order of the President of the Republic which may take place at any time. As for the Applicant, it did not avail itself
56 Law No. 15/012 on the general hydrocarbons regime, 1 August 2015, Explanatory Memorandum, paragraph 6, subparagraph 16, Exhibit LEX DM-V. ↩
57 Law No. 15/012 on the general hydrocarbons regime, 1 August 2015, Article 189, Exhibit LEX DM-V. ↩
58 Section 79 of the 1981 Act provides that " Mineral rights for hydrocarbons are granted by agreement. The oil agreements are initiated [...] by the [Ministry of Hydrocarbons] They are signed by [Minister of Hydrocarbons and the Minister of Finance], [...] The oil agreements, although duly signed by the parties, have effect only after having been approved by the President of the Republic." ↩
59 Response to the Supplementary Brief, 12 June 2018, para. 232. ↩
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of an impact of the 2015 Act which would be more favourable compared to the regime of the 1981 Act.
113. The Court of Arbitration therefore considers that it emerges from the cumulative application of the provisions of Article 189 of the 2015 Law60 and the stipulations of Article 28 of the Contracts in question that the Congolese law applicable to them is the 1981 Law and it is in light of the provisions of the 1981 Law that it is necessary to examine the respective claims of the Parties, firstly with regard to the consequences of the non-issuance of the Presidential Order of Approval of the Disputed Contracts.
114. Article 79 (5) of the 1981 Act provides that "[t] he petroleum agreements, although duly signed by the parties, shall have effect only after having been approved by an order of the President of the Republic."61 This provision is repeated in Article 34.1 of each of the Disputed Contracts which provides that "[t] his Contract shall not enter into force until the date of signature of the order of the President of the Republic approving this Contract."62 Since the order of approval of the President of the Republic was not issued for any of the Disputed Contracts, it is necessary to examine the scope of the order of approval (1) and the conditions of its issue. (2).
115. The Respondent alleges that, without having been approved by presidential order, the Disputed Contracts could not take effect. It states that the production sharing contract is of the nature of an agreement concluded under a condition precedent.63 It argues that this analysis is confirmed by (i) the judgment of the Supreme Court of Justice of the Democratic Republic of Congo of 10 December 2010 which, according to it, specifies the legal regime of the presidential order approving a production sharing contract64 and (ii) the judgment of the High Court of Justice of the British Virgin Islands of 19 November 2010 concerning the extension of an interim injunction enjoining the companies Caprikat and Foxwhelp to proceed with the exploitation of blocks 1 and 2 Albertine Graben which had been granted ex parte by the first judge.65
116. The Applicant, meanwhile, claims that the Contracts in question entered into force upon their signature to the extent that they impose payment obligations from that moment. According to the Applicant,66 if the order of approval of the President of the Republic was to be considered as a condition precedent, which it contests, it not constituting a future and uncertain event67, but dependent on the will of the State which is a party to the Disputed Contracts, it would be purely
60 Law No. 15/012 on the General Hydrocarbons Regime, 1 August 2015, Exhibit LEX DM-V. ↩
61 Ordinance-Law No. 081-013 on General Legislation on Mines and Hydrocarbons, 2 April 1981, Exhibit LEX DM-I. ↩
62 2007 Contract, Section 34.1, Exhibit DM-VIII and 2008 Contract, Section 34.1, Exhibit DM-IX. ↩
63 Response to the Supplementary Brief, 12 June 2018, para. 17. ↩
64 Judgment of the Supreme Court of Justice of the Democratic Republic of Congo, 10 December 2010, paras. 1 and 2, Exhibit DF-III. ↩
65 Judgment of the High Court of Justice of the British Virgin Islands, 19 November 2010, Exhibit DF-II. The Court of Arbitration considers that this decision, which rules on a precautionary measure, is not directly relevant for the determination of the questions submitted to it and will therefore take into account in its analysis below the, impact of the judgment of the Supreme Court of Justice of the Democratic Republic of Congo of 10 December 2010 mentioned above, Exhibit DF-III. ↩
66 Response to the Supplementary Brief, 12 June 2018, paras. 377-386. ↩
67 The obligation contracted under a condition precedent is one that depends on a future and uncertain element, or on an element that has now occurred but is still unknown to the parties. In the first case, the obligation can only be executed after the event. Decree of 30 July 1888, Article 79, Exhibit LEX DM-II. ↩
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potestative pursuant to Article 68 of the Decree of 30 July 1888 according to which: "the potestative condition is that which makes the execution of the convention dependent on an event which is in the power of one or the other of the Contracting Parties to bring about or to prevent"68 and therefore void according to the provisions of Article 72 of the Decree of July 30, 1888 which provides that "Every obligation is null when it has been contracted under a potestative condition on the part of the person who binds himself. "69
117. The Court of Arbitration cannot support the Applicant's analysis that the Contracts entered into force upon their signature on the ground that they provide for the performance of obligations from that moment. It notes that it is always open to the parties to a contract to provide for certain obligations to be met before the entry into force of the contract and to contractually adjust the consequences of the failure to enter into force. This is the case, for example, where a contract provides for the payment of a deposit on signature and its entry into force at the time of issue, within the agreed deadline, of an administrative authorisation, the consequences of the failure to obtain administrative authorisation within the agreed period being penalised by the possibility of implementing the termination ex officio of the contract and to demand the refund of the deposit.
118. Moreover, the fact that, as the Applicant maintains, Article 34.1 of the disputed Contracts may be regarded as constituting a potestative condition leading to the nullity of that stipulation, has no effect on the legislative provision of Article 79, paragraph 5, of the 1981 Act, which nevertheless continues to have effect.
119. The Parties agree that under Article 79 (5) of the 1981 Law, "oil agreements do not become fully effective until they have been approved" by an order of the President of the Republic.70 In fact, as will be discussed below with regard to the conditions for the issuance of the Presidential Order, the Disputed Contracts produced certain effects, the Respondent having authorised the Applicant to perform certain oil works which do not require the use of boreholes in the ground and do not lead to the extraction of hydrocarbon resources from the subsoil, and therefore the disputed Contracts have been started.
120. The Court of Arbitration also notes that in any event, the Parties agree that the absence of an order of approval does not have the effect of terminating the Disputed Contracts, but only of delaying the enforceable nature of some of their respective obligations. The Respondent states that the Presidential Ordinance "could give [the contracts] an enforceable character, although in the field of civil law the signed contracts remain valid as to the rights and obligations attached thereto.”71 This assessment is also that of the Applicant's counsel, Maître Kabinda, who indicates:
From the signing of the production sharing contract by the Minister of Hydrocarbons and the Minister of Finance, the Democratic Republic of Congo is committed to the oil company and vice versa. The contract is formed [...]72
68 Decree of 30 July 1888, Article 68, Exhibit LEX DM-II. ↩
69 Decree of 30 July 1888, Article 72, Exhibit LEX DM-II. ↩
70 For the Claimant, Response to the Supplementary Brief, 12 June 2018, para. 165; for the Respondent, Response to the Supplementary Brief, 12 June 2018, para. 16. ↩
71 Response to the Supplementary Brief, 12 June 2018, para. 2. ↩
72 Counsel Kabinda's Consultation, 15 June 2018, Section 1, last paragraph, page 2. ↩
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121. The Court of Arbitration therefore considers that the non-issuance of the Presidential Order has the effect of suspending certain effects of the Contracts in issue pursuant to Article 79, paragraph 5, of the 1981 Law, the Parties remaining bound by the obligations which they contain.
122. The Applicant further contends, however, that the Respondent was under an obligation to issue the Presidential Order approving the Disputed Contracts within a reasonable time in accordance with their Article 29 according to which:
The "DRC" takes all necessary measures to facilitate the de-escalation of the activities of the "Contractor" and its Subcontractors. At the request of one or the other, the assistance referred to above will cover the following area, without this list being exhaustive:
- [...]
- Obtaining the necessary approvals for the conduct of petroleum operations, insofar as the requests have been made in accordance with the legislation in force in "DRC";
- Any other subject that lends itself to the assistance of the DRC particularly in terms of security or operation within the framework of the legislation and regulations in force.73
123. For the Applicant, the Respondent's obligation is still based on the provisions of Article 33, paragraph 3, of the Decree of 30 July 188874 establishing the principle of execution in good faith of contracts.75
124. The Respondent does not formally dispute these provisions.
125. The Tribunal notes that (i) the Parties agree that certain oil works that require drilling and extraction of hydrocarbon resources from the subsoil of the Democratic Republic of Congo are not likely to be carried out before the presidential decree of approval of the Contract has been issued, (ii) it is not alleged that the President of the Republic has, in the capacity in which he acts, a separate legal personality distinct from that of the State, party to the Disputed Contracts, and (iii) that under Article 29 of the disputed contracts, the State has the obligation to take all necessary measures to facilitate petroleum activities, in particular, to obtain the necessary approvals, including the order of approval of the President of the Republic.
126. Consequently, the issuance of the Presidential Order of Approval of the Disputed Contracts constitutes, under Article 29 of the Contracts in question, an undertaking by the State, guarantor of the application of its own legislation and from which it can only be released if the conditions laid down by it for its issuance are not met, which is now to be determined.
127. The Applicant alleges that the issue of the Presidential Order approving the Contracts in question was a mere formality, the President of the Republic lacking jurisdiction to negotiate or amend the oil conventions. It recognises that the President of the Republic may refuse to issue the order of approval, but only for a reason falling within his area of competence as "guarantor of the Constitution, national independence, territorial integrity, national sovereignty, respect for international agreements and treaties as well as those of regulator and arbiter of the normal functioning of the Institutions of the Republic with the involvement of the Government and under the control of the Parliament ",76 said
73 2007 Contract, Section 29, Exhibit DM-VIII and 2008 Contract, Section 29, Exhibit DM-IX. ↩
74 Decree of 30 July 1888, Article 33, Exhibit LEX DM-II. ↩
75 Response to the Supplementary Brief, 12 June 2018, paras. 198-202. ↩
76 Constitution of the Democratic Republic of Congo, p. 5, Exhibit LEX DM-IX; Response to the Supplementary Brief, 12 June 2018, paras. 170-192, Exhibit LEX DM-IX. ↩
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powers listed and enshrined in Article 69 of the Constitution of the Democratic Republic of Congo which provides:
The President of the Republic is the Head of State. He represents the nation and is the symbol of national unity.
He ensures respect for the Constitution.
He ensures by his arbitration the regular functioning of the public authorities and the Institutions as well as the continuity of the State. He is the guarantor of national independence, territorial integrity, national sovereignty and respect for international treaties and agreements.77
128. The Respondent alleges that the issue of the Presidential Order is a discretionary power of the President of the Republic and that the law does not provide any deadline for this purpose. It bases this on the judgment of the Supreme Court of Justice of the Democratic Republic of Congo of 10 December 2010 according to which:
[the President of the Republic] does not have a related competence in this matter which would absolutely oblige him to give his approval; on the other hand, it is a discretionary power implying his sovereign assessment in consideration of the elements of the case as well as the interests of the Congolese State and for which he is not bound by any deadline.78
129. It is therefore necessary to consider (i) the substantive conditions and (ii) the time period within which the approval order must be issued.
130. On the conditions for issuing the presidential order, the Court of Arbitration notes that, according to Article 1 of the 1981 Law, "the sub-soil [of the Democratic Republic of Congo] is and remains the property of the Nation. [...] ownership of mines and hydrocarbons constitute [ing] a distinct and separate law rights under a land concession." Accordingly, pursuant to the second paragraph of section 4, "no one may engage in exploration, research and mining [including, according to section 2a), hydrocarbons] except by virtue of the rights granted or recognised by the State". In addition, in accordance with Article 79 of the 1981 Law, hydrocarbon mining rights are granted by agreement, such oil agreements being initiated by the Ministry of Hydrocarbons, signed by the Minister of Hydrocarbons and the Minister of Finance and approved by the President of the Republic.79 The 1981 Act therefore takes into account the distribution of competence between the Ministers concerned and the President of the Republic provided by the Constitution, the President of the Republic being the guarantor of the interests of the Nation as the owner of the subsoil of the Democratic Republic of Congo.
131. This analysis is supported by the undisputed fact that, in the context of the implementation of the disputed Contracts, the Applicant was able to legally carry out certain petroleum works, notwithstanding the non-issuance of the Presidential Order of Approval. Thus, during the reallocation of Block 1 of the Albertine Graben, the exploration work under the 2008 Contract was underway after having been authorised by the Ministry of Hydrocarbons and under the 2007 Contract, the Ministry of Hydrocarbons similarly issued on 23 June 2012 the authorisation to carry out the aeromagnetic and gravimetric acquisition works of blocks 23 and 24 of the Central basin and instructed its Secretariat to
77 Constitution of the Democratic Republic of Congo, Article 69, LEX DM-IX. ↩
78 Judgment of the Supreme Court of Justice of the Democratic Republic of Congo, 10 December 2010, Exhibit DF-III. ↩
79 Ordinance-Law No. 081-013 on General Legislation on Mines and Hydrocarbons, 2 April 1981, Exhibit LEX DM-I. ↩
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appoint two experts to assist the Applicant in the aerial work scheduled for 15 August 2012.80 In fact, such works did not require the drilling of soil in the Democratic Republic of the Congo and the removal of hydrocarbon resources from its subsoil, so that the non-issuance of the Presidential Ordinance was no obstacle. On the other hand, since the execution of the oil agreement leads to the integrity of the territory being affected by drilling or the extraction of hydrocarbon resources, the order of approval of the agreement by the President of the Republic is required.
132. The Supreme Court emphasises that the power of the President of the Republic is discretionary and specifies that this power implies "his sovereign appreciation of the elements of the case as well as the interests of the Congolese State."81 The interests of the Congolese State are those derived from state rights over the subsoil of which the President of the Republic is the guarantor under the Constitution and the 1981 Act. It is therefore up to the President of the Republic to assess to what extent an oil convention is likely to undermine national independence, territorial integrity, national sovereignty and international treaties and agreements and, where appropriate, to refuse to issue the approval order if he is not satisfied that this is the case. This sovereign appraisal could only be challenged before the courts of the Democratic Republic of the Congo under the conditions provided for by law and the Constitution, for example, in the event of a loss of power or a manifest error of assessment. At most, the Court of Arbitration may consider, in the context of the situation submitted to it with respect to the 2008 Contract, on the one hand, and the 2007 Contract, on the other, that, in accordance with the judgment of the Supreme Court, the possible refusal to issue the order should be motivated by the interests of the State over which the President of the Republic enjoys sovereign power. However, not only has it not been issued, but there has been no decision of rejection by the President of the Republic with any reasoning whatsoever submitted the debate, or even its alleged existence.
133. The period in which the order of approval of the President of the Republic must be issued is not specified in the 1981 Act. The Supreme Court considers that for the exercise of his discretion the President of the Republic is not bound by any deadline. The Respondent acknowledges, however, that a reasonable period of time must be respected for an investment contract in which the State has committed itself.82 It does not specify what should be regarded as a reasonable period of time, but the Applicant submits in this respect that a time frame of approximately two months from the date of signature is a reasonable deadline. In this respect, the Applicant relies on the Caprikat Contract signed on 5 May 2010, which was the subject of a presidential approval order of 18 June 2010 published in the Official Gazette on 22 June 2010. It also submits to the Court of Arbitration the elements of a more detailed analysis based on the seven oil agreements approved since 2006 which show that, on average, a period of 19 months is necessary for the Presidential Order of Approval of the agreement to be issued.83
134. The Court of Arbitration notes that, of these seven oil agreements, only two of them, the contract concluded with Surestream Petroleum Ltd. in November 2005 and the Caprikat Contract, for which the approval order was issued in under three months and one and a half months respectively, confirm
80 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 23 June 2012, Exhibit DM-XXXIII; letter from DIGOil to the Director General of the Civil Aviation Authority, 18 July 2012, Exhibit DM-XXIV; Letter from the Ministry of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 30 July 2012, Exhibit DM-XXXV. ↩
81 Judgment of the Supreme Court of Justice of the Democratic Republic of Congo, 10 December 2010, ninth sheet, Exhibit DF-II. ↩
82 Note from the Minister of Hydrocarbons of the Democratic Republic of Congo to the Government, 18 October 2017, Exhibit DF-I and Exhibit DM-LIV. ↩
83 Response to the Supplementary Brief, 12 June 2018, para. 345-349. ↩
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the two-month period advanced by the Applicant. The other five agreements were approved within one and five months to two years and seven months. The Applicant's counsel, Maître Kabinda, considers that: "a reasonable period of time should not exceed six months from the signing of the production sharing contract. However, practice tells us that the deadline for publication of the presidential decree may be up to two years in the Democratic Republic of Congo."84 However, the six-month assessment of the reasonable period of time is not supported by any doctrine or case law, and the evidence provided by the Applicant indicates that the practice leads to a time frame that may exceed two years.
135. The Court of Arbitration will therefore consider the respective claims of the Parties taking into account the administrative practice in the Democratic Republic of Congo which shows that, at the time of signing the Contracts, the time for issuing the presidential order had turned out to be up to two years and four months.
136. From the above it follows that (i) the Respondent has the obligation to do everything possible to allow the issuance of the presidential order under the conditions provided for by law and (ii) this obligation must be met within a certain period of time that is in practice up to two years and four months.85
137. The rights resulting from the disputed Contracts are identical. Their purpose, according to their article 2, is "the attribution by the Democratic Republic of Congo to the “Contractor" of the exclusive rights of recognition and exploration of hydrocarbons as well as the right to obtain operating concessions”86 within the limits of an exclusive search and Exploration Area (EEZ) established under the 2008 Contract for Block 1 of the Albertine Graben and within the framework of the 2007 Contract for blocks 8, 23 and 24 of the Central Basin.
138. Each disputed Contract includes, on the one hand, an exploration phase of the ZERE consisting for the "Contractor", of executing a program of petroleum works intended to reveal commercially exploitable hydrocarbon resources. The duration of this exploration phase is five years renewable twice, the Applicant being able at its discretion at the end of each five-year period, to either seek the renewal of the Exploration License or terminate it.87
139. On the other hand, in the event of discovery of commercially exploitable resources, on the basis of a report establishing the area in which the deposit may be mined and the commercial character of that deposit, at the request of the Contractor, the Respondent shall issue an Exploitation license for a period of 20 years, renewable.88
84 Counsel Kabinda's Consultation, 15 June 2018, Section 2, last paragraph. ↩
85 In this regard, the Court of Arbitration considers only contracts concluded prior to the signing of the Contracts in dispute, that is to say between November 2005 and October 2006 for which the approval order has been issued no later than 12 March 2008. Two other oil agreements of November 2007 were approved within two years and seven months, but the order was only published on 18 June 2010 at the same time as the Caprikat contract. When the rights of the Claimant under the 2008 Contract were reassigned to Caprikat Ltd and Foxwhelp Ltd, the administrative practice was thus two years and four months. ↩
86 Article 2 of the disputed contracts, underlining added. Exhibit DM-VIII and DM-IX. ↩
87 Articles 7 and 9 of the Contracts, Exhibit DM-VIII and Exhibit DM-IX. ↩
88 Articles 10.3 and 10.4 of the Contracts, Exhibit DM-VIII and Exhibit DM-IX. ↩
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140. The disputed Contracts are therefore long-term contracts that include a 15-year reconnaissance and exploration period and various operating concessions for at least 20 years each.89
141. The petroleum costs, and in particular the financing of the investments made necessary for the exploration and exploitation oil works are entirely borne by the Contractor and will be refunded to it only during the exploitation phase, by attribution of a share of the production of liquid hydrocarbons, the distribution key between the different entities making up the Contractor being fixed contractually90
142. The Applicant submits that the Respondent committed a breach in failing to issue the order approving the disputed Contracts and that it unilaterally and unlawfully breached the 2008 Agreement by reallocating the rights under this Agreement to a third party. There was a separate examination of the situation relating to the 2008 Contract (1) and the 2007 Contract (2).
143. The 2008 Contract was concluded on 21 January 2008. While the exploration work was authorised and was in progress, on 5 July 2010, the Respondent informed the Applicant that, following the 2 June 2010 meeting of the Council of Ministers, the closing of the process of licensing. mineral rights to hydrocarbons on the Albertine Graben had led the Government to choose another association and that, by order of 18 June 2010, the President of the Republic had approved the Caprikat Contract for blocks I and II of the Albertin Graben.91
144. The Applicant submits that the Respondent committed misconduct by (i) failing to issue the 2008 Contract Approval Order within a reasonable period of time and (ii) by reallocating Block 1 of the Albertine Graben to another consortium under of the Caprikat Contract, unilaterally and unlawfully terminating the 2008 Contract which had been entered into exclusively with the Applicant for a period of more than 20 years.92
145. According to the Respondent, (i) the 2008 Contract could not produce effects because the Presidential Order of Approval had not been issued, (ii) the Applicant waived all of its rights under the 2008 Contract in the framework of a transaction and (iii) the 2008 Contract had lapsed "because of the disappearance of one of the essential elements which conditioned the execution of the contract of 2008 namely the bonus of 2,500,000 USD".93
146. The Court of Arbitration notes that at the time the 2008 Contract was reassigned in mid-2010, according to administrative practice (see paragraph 135), the Presidential Order of Approval of the contract should have been signed and published or at least in the process of being so. The Applicant had, moreover, carried out, with the authorisation of the administration, the oil works not requiring this approval. It should be noted in this regard that by inviting the Applicant to pay the signing bonus by letter of 14 February 2008, the Ministry of Hydrocarbons specified that, given the progress of work in the Ugandan part of the Graben Albertine, it was committed to activating the exploration-
89 Response to the supplementary Brief, 12 June 2018, para 108. ↩
90 Articles 14 and 15 and 22 of the disputed Contracts, Exhibit DM-VIII and Exhibit DM-IX. ↩
91 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 5 July 2010, Exhibit DM-XV. ↩
92 Response to the Supplementary Brief, 12 June 2018, paras 20-21. ↩
93 Supplementary Brief of the DRC of 26 April 2018 p. 4. ↩
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production work in the area and called on the Applicant to take the appropriate measures,94 following which, by letter of 25 April 2008, the Minister of Hydrocarbons formally authorised the Applicant to begin the work of installation of the site in block 1 of the Albertine Graben.95
147. In addition, the Court of Arbitration notes that the President of the Republic did not refuse to deliver the order approving the 2008 Contract but only refrained from doing so for a period of two years and three months. Although this period goes well beyond the six-month period considered reasonable by the Applicant's consultant, it nevertheless conforms to administrative practice in the Democratic Republic of Congo so that the non-issuance of the order at that stage would not be sufficient on its own to characterise a breach on the part of the Respondent. The Court of Arbitration notes, however, that no grounds of general interest likely to preclude the issue of the Presidential Order have been put forward by the Respondent.
148. The Respondent alleges that "there is no fundamental difference between [the dispute with Tullow and this litigation] as they both bear on the same block 1 of the Albertine Graben, and that DIGOIL had been chosen over TULLOW, the company CAPRICAT had been chosen to replace DIGOIL" and emphasises that "the issue of all these disputes was the legal regime of the Presidential Order" and that "the circumstances in which the Supreme Court delivered its judgment are irrelevant."96
149. The Respondent appears to consider that, as a result of the non-issuance of the Presidential Order, the 2008 Contract had no effect, which would have left the award process open so that it could reallocate block 1 of the Albertine Graben to a third party.
150. The Court of Arbitration notes that the situation of the 2008 Contract considered here differs from the elements of the case submitted to the Supreme Court in the proceedings that gave rise to its judgment of 10 December 2010. In fact, the action brought before the Supreme Court is an action for "annulment of Ministerial Order No. 012 / MIN-HYDRO / LMO / 2007 and No. 062 / MIN- FINANCE / AMK / 2007 of 17 October 2007 reopening to the exploitation of Block I of the Graben Albertine ", which was decided jointly by the Minister of Hydrocarbons and the Minister of Finance considering (i)" the need for the government to exploit the sedimentary basins especially in the Graben Albertine area, "(ii)" the Government's objectives of revenue maximization and clean-up of the hydrocarbon sector; (lii)" the irregularities found in the procedure for allocating blocks one and two and in the signing of the block sharing agreement between the Republic and TULLOW-HERITAGE-COHYDRO (CCP) of 21 July 2006;” and (iv) "urgency and necessity."97
151. In fact, it appears from the documents annexed to the Deloitte Report that the Tullow Contract was terminated98 and that, in light of the elements of the assessed sovereignly by the President of the Republic, the continuation of this contract could to be contrary to the interests of the State, the Albertine Graben being located in the North-East of the territory of the Democratic Republic of Congo and extending beyond the border into the territory of Uganda. While discoveries were announced during the years 2006 and 2007 on the Ugandan side and Tullow Oil became the first oil company in Uganda, at the time of tensions with the Uganda, the termination of the Tullow Contract for block 1
94 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 14 February 2008, Exhibit DM-LX. ↩
95 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 25 April 2008, Exhibit DM-XIII. ↩
96 Post Hearing Remarks, 6 August 2018, p. 7. ↩
97 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 14 February 2008, Exhibit DM-LX. ↩
98 Judgment of the Supreme Court of Justice of the Democratic Republic of Congo, 10 December 2010, Exhibit DF-III. ↩
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of Albertine Graben was announced.99 This is confirmed by the above-mentioned letter from the Ministry of Hydrocarbons dated 14 February 2008, which shows that the latter is keen to advance work in the Ugandan part of the Albertine Graben.100
152. However, as regards the 2008 Contract no order to reopen the exploration of block 1 Albertine Graben was issued and no reason of general interest was alleged. None of the elements in the debate therefore allow us to consider that the conditions for the issue of the presidential order under the law of the Democratic Republic of Congo have not been met for the 2008 Contract.
153. The fact, as decided by the Supreme Court of Justice of the Democratic Republic of Congo in its judgment, that the President of the Republic has a discretionary power, does not mean that this power can be exercised arbitrarily, and it is not for the Court of Arbitration to rule on the validity of the decision taken by the State to attribute the exclusive rights under the 2008 Contract to another consortium, but only to seek, in contract law, the effects of that decision on the respective obligations of the Parties.
154. However, as has been determined in paragraphs 120 and 121 above, the non-issuance of the Presidential Order of Approval of the 2008 Contract has the effect of suspending its execution pursuant to Article 79, paragraph 5, of the 1981 Act, but does not have the effect of releasing the Parties from the obligations arising therefrom. Consequently, the Parties must be considered to have been still bound by the 2008 Contract when the State reassigned the exclusive rights resulting from that contract to a third party, unless there was a cause to terminate the 2008 Contract.
155. The Applicant submits that the termination of the 2008 Contract was only possible with the mutual agreement of the Parties, basing this on Article 33 of the Decree of 30 July 1888101 which provides that:
Legally formed agreements have legal force on those who concluded them.
They may be revoked only by mutual consent or for the causes permitted by law.
They must be performed in good faith.
156. It avails itself of the provisions of Article 25 of the 2008 Contract which exhaustively enumerates the causes of termination as follows:
The Contract may end upon occurrence of one of the following events:
(i) when the Exploration License expires and will not be renewed under DRC law;
(ii) when the Exploitation License has expired or has not been renewed in accordance with legal provisions;
(iii) for each entity of the "Contractor" in case of voluntary or involuntary withdrawal in accordance with the provisions of the Consortium Contract;
99 Deloitte Report, Exhibits in Annex 7, Exhibit 7.1, Hydrocarbons in the Albertine Rift: Opportunities for Development or Risks of Instability? pp. 29-30, Exhibit DM-LVI. ↩
100 Deloitte Report, exhibits in Annex 7, Exhibit 7.1, Hydrocarbons in the Albertine Rift: Opportunities for Development or Risks of Instability? p. 30, Exhibit DM-LVI. ↩
101 Decree of 30 July 1888, Contracts for Conventional Obligations, (BO, 1888, p. 109), Article 33, Exhibit LEX DM-II. ↩
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(iv) the termination of the contract: the State shall have the right to terminate this contract in the following cases:
However, this termination can only take place after formal notice to the "Contractor" by the "DRC". Following this formal notice, the parties must meet in order to find a solution to the dispute within one month. If, after this phase of negotiations and explanations, the "Contractor" has not taken measures to overcome the problem giving rise to the formal notice within three months of the consultation, the "DRC "will then begin a Contract termination procedure.102
157. The reason given by the Respondent that it chose another candidate is not covered by that stipulation.
158. In addition, the last paragraph of Article 29 of the disputed Contracts specifies that
The "RDC" guarantees to the "Contractor", to each entity constituting the "Contractor" as well as to the assignees of the "Contractor" non-discrimination against them in the application of the laws or regulations in relation to any other company conducting oil operations in the Democratic Republic of Congo.103
159. In the absence of any allegation by the Respondent of a public interest ground justifying a refusal to issue the presidential order, the Applicant thus argues in a relevant manner that the Respondent's unilateral decision to award the rights it held under the 2008 Contract to a third party constitutes an "assault" which contravenes the provisions of Article 33 of the Decree of 30 July 1888 and rightly relies on the case-law according to which "the judgment which approves the attitude of the buyer resorting to assault to terminate the agreement which bound it to the seller has misunderstood the nature of the contractual relations to which article 33 [of the Decree of 30 July 1888] grants legal force, (L' shi, 21.4.1972, RJZ, 1973, No. 1, p. 70). "104
160. The Respondent submits, however, that the 2008 Contract lapsed on the ground that it was rendered ineffective by the Parties for several years. In its supplementary brief, it claims that the 2008 Contract was terminated when the Parties agreed to the principle of offsetting the financial obligations of the 2008 Contract with those resulting from the 2007 Contract and that such offsetting became effective on 23 March 2012, when "the DGDRAD confirmed the allocation of the amount of $ 2,500,000 paid on 22 March 2008" by the Applicant to the signing bonus of the 2007 Contract. The 2008 Contract was thus deprived of one of its essential elements.105
102 2008 Contract, Section 25, Exhibit DM-IX. ↩
103 Disputed Contracts, Article 25, Exhibits DM-VIII and DM-IX. The Court of Arbitration notes in this regard the speed with which the order for approval of the Caprikat Contract was issued (approximately 1.5 months) while the Claimant had to wait several years in vain, which constitutes a breach of the guarantee granted by the State. ↩
104 Katuala Kaba Kashala, annotated Congolese Civil Code. First part. Contracts or conventional obligations. Editions Batena Ntambua, second edition, Kinshasa, 2009, pp. 58-60, Exhibit LEX DM-IV, p. 28, Reply to the Supplementary Brief, 12 June 2018, para. 134. ↩
105 Supplementary Brief, 26 April 2018, p. ↩
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161. The Applicant acknowledges that lapse is a method of dissolving of the contract. It stresses, however, that this is based not on law but on case law and that the Respondent provides no evidence that the lapse of the contract is one of the methods of extinguishing obligations recognised by Congolese law.106
162. The plaintiff also points out that "in Belgian law the case-law of the Belgian Court of cassation of Belgium teaches that 'the lapse of an obligation by the disappearance of its purpose presupposes that it has become definitively impossible to perform its object in kind' (Lex DM-VII). The lapse of a contract due to the 'disappearance of one of these essential elements' is, however, not recognised by Belgian law."107 The Applicant also notes that the performance in-kind of an obligation to pay a sum of money is never definitively impossible and that it was sufficient for the Respondent to establish a new debit slip for the payment of the signing bonus of the 2008 contract to allow the Applicant to meet this obligation, so that, according to Belgian law, the 2008 Contract would not lapse due to the attribution to the 2007 Contract of the signing bonus signature paid by the Applicant for the 2008 Contract.108 The Applicant further claims that it is the Respondent's decision to reassign the rights resulting from the 2008 Contract to a third party that led to the disappearance of its purpose, on the basis of current Belgian law, the In fact, the disappearance of the purpose of the 2008 contract was deliberately caused by the Democratic Republic of Congo which, in so doing, committed a breach incurring its liability.109
163. The Court of Arbitration notes that, despite its invitations,110 The Respondent has not provided the evidence, the burden of which falls upon it, of the content of Congolese law with respect to the lapse. The plea alleging the alleged lapse of the 2008 Contract must therefore be rejected.
164. Nor can the Respondent rely on the fact that a settlement was reached with the Respondent in which the Respondent waived all rights under the 2008 Contract. It invokes the minutes of 27 December 2010 of the meeting held in the office of the Minister of Hydrocarbons from 9 to 17 December 2010.111 This meeting follows the letter of 21 September 2010 in which the Applicant (i) declared the unlawful reassignment of Block 1 of the Albertine Graben to a third party and (ii) requested the cancellation of the Caprikat Contract and the continuation of the 2008 Contract, noting that it had already invested at least USD 12,550,000 in the execution thereof, and reserved the right to assert its rights before all the competent authorities. In the same letter, however, it proposed to negotiate and conclude a settlement agreement under which it would obtain (i) the presidential order approving the 2007 Contract, (ii) the allocation of a new block 9 in the central and / or another new
106 Response to the Supplementary Brief, 12 June 2018, paras 453-456. ↩
107 Response to the Supplementary Brief, 12 June 2018, para. 458. ↩
108 Response to the Supplementary Brief, 12 June 2018, paras. 457-463. ↩
109 Response to the supplementary Brief, 12 June 2008, paras. 469-479. ↩
110 In its communication of 16 July 2018, pursuant to Procedural Order No. 5 of the Court of Arbitration, the Respondent states that "on the lapse of [the 2008 Contract], the DRC lacked sufficient time to back it up with documented case law and thus repeated its previous pleas in this respect." The Court of Arbitration notes that the Respondent did not seek an extension of the time limit imposed on it by Procedural Order No. 5 and that this plea was raised by the Respondent at the beginning of the proceedings (response Brief, para 18) and was the subject of a specific submission, the Supplementary Brief, dated 26 April 2018. The invitation made to the Respondent, by Procedure Order No. 5 of Court of Arbitration, to provide elements of doctrine and case law on this issue was therefore only an additional opportunity that was offered to the Respondent to support its argumentation on doctrine and case in Congolese law so that the Respondent was thus fully able to argue its case on this issue. ↩
111 Ministry of Hydrocarbons, Minutes of works on offsetting by the Congolese State in favour of the Divine Inspiration Group from 9 to 17 December 2010, Exhibit DM-XXII. ↩
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Block, Fossé de Borna, and (iii) the return of the sums received by the Respondent for signing bonuses and HQSE with interest.112
165. The Applicant rightly argues that the meeting of 9-17 December 2010 focused solely on the mechanism of "offsetting carried out by the Congolese State" in favour of the Applicant, understood as a way of extinguishing debts, that is to say to enable the reallocation of sums paid under the signing bonus (2,500,000 USD) and HQSE (1,500,000 USD) by the Applicant in execution of the 2008 Contract to the 2007 Contract, only the offsetting between debts of the same nature being possible under Congolese law. In addition, the minutes are not a contract and a fortiori not a settlement agreement entailing waiver of its rights by the Applicant. Moreover, it is not signed by the authorised representatives of the Parties, namely Mrs Brown for the Applicant and the Minister of Hydrocarbons and the Minister of Finance for the Respondent.113 And if, as the Respondent rightly points out, the offsetting mechanism became effective on 23 March 2012, resulting in the Applicant meeting its obligations relating to the payment of the signing bonus of the 2007 Contract,114 the other claims of the Applicant concerning in particular the investment of 12,550,000 USD granted in petroleum works under the 2008 Contract or the allocation of a new block in the Central Basin were not discussed and the order approving the 2007 Contract has not been issued.
166. The Court of Arbitration notes that the evidence before the court effectively shows that the discussions after the meeting of December 9 to 17, 2010, focused on the implementation of the 2007 Contract and the attribution to that contract of amounts paid under the signing bonus of the 2008 Contract. However, the Respondent provides no evidence that during these discussions the Applicant relinquished, in a definite and unambiguous manner, its other claims for compensation for the violation of her rights under the 2008 Contract that she was deprived of. In any event, the Court notes that one of the essential conditions posed by the Applicant in relation to the issue of the order approving the 2007 contract was not satisfied while, on 16 March 2012, the Applicant had paid an amount of 500,000 USD in addition to the compensation set up by the DGRAD.115
167. The Court of Arbitration therefore considers that the Respondent has committed a breach (i) by failing to issue the Presidential Order approving the Disputed Contracts and (ii) by attributing block 1 of the Albertine Graben to a third party in breach of the stipulations of the 2008 Contract, dispossessing the Applicant of its exclusive rights under the 2008 Contract without compensation.
168. The 2007 Contract was signed on 14 December 2007, conferring on the "Contractor" exclusive rights of recognition and exploitation of hydrocarbons as well as the right to obtain operating licenses within the limits of the ZERE, consisting of blocks 8, 23 and 24 of the Central Basin. As noted above, the signing bonus for these three blocks (US $ 1,000,000 per block) was paid by allocating the sum of US $ 2,500,000 paid by the Applicant pursuant to the 2008 Contract116 and an additional $500,000 paid on 16 March 2012 by the Applicant.117 Upon the signing of the 2007 Contract, the Applicant performed the analysis of the technical data for which to access, prior to said signature, the Applicant
112 DIGOil's letter to the President of the Democratic Republic of Congo, 21 September 2010, Exhibit DM-XIX. ↩
113 Response to Supplementary Brief, 12 June 2018, para. 412. ↩
114 Letter from the General Directorate of Administrative, Judiciary, National, and Participation Revenue (DGRAD), 23 March 2012, Exhibit DM-XXXII. ↩
115 Debit slip No. 322569 for an amount of $ 500,000, 16 March 2012, Exhibit DM-XXX; Certificate of payment in the amount of 500 000 USD established by Rawbank SARL, 16 March 2012, Exhibit DM-XXXI. ↩
116 Certificate of payment of $ 2,500,000 drawn up by Rawbank SARL 21 March 2008, Exhibit DM-XII. ↩
117 Letter from the General Directorate of Administrative, Judiciary, National, and Participation Revenue (DGRAD), 17 November 2011, Exhibits DM-XXIX and DM-XXX. ↩
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had paid two "compensatory taxes" in the amount of 50,000 USD each.118 The Ministry of Hydrocarbons invited the Applicant to execute the oil works as of 23 June 2012.119 The Applicant was then authorized to perform the aeromagnetic and gravimetric acquisition work in August 2012,120 the analyses corresponding to the end of 2012 and in 2013, thus allowing the updating of existing data from 1987. This data was presented to experts appointed by the Democratic Republic of Congo in 2013 and 2014.121 However, the President of the Republic did not issue the order approving the 2007 Contract and, on 6 April 2016, nine years after the signature of the contract, the Applicant served notice on the Respondent to execute the 2007 Contract within 30 days, under pain of commencing arbitration.122 Following the filing of the Request, the Respondent filed a letter of 18 October 2017 in which the Minister of Hydrocarbons again asks the Prime Minister to implement the procedure for issuing the 2007 Contract Approval Order.
169. The Applicant submits that by failing to issue the 2007 Contract Approval Order within a reasonable time, the Respondent breached its obligations under the 2007 Agreement.123
170. The Respondent claims that the Applicant's action is premature, the President of the Republic being able at any time to issue the order for the approval of the 2007 Contract. It relies on the decision of the Supreme Court of the Democratic Republic of Congo of 10 December 2010 which considered in connection with the Tullow Contract that "the contract raised not yet having begun to produce its effects, the action of the Applicant is premature and therefore inadmissible. "124 The Applicant observes that "the Supreme Court does not give reasons for the premature action brought by Tullow to bring an action for annulment and it is not clear why this action to annul the act terminating its contract was premature."125 The Respondent takes from this that "the condition [of the approval of the contract by the President of the Republic] has not yet been fulfilled and the action of the Company Tullow is inadmissible" and that "The Ministry of Hydrocarbons and the Ministry of Finance have no means of putting pressure on the President of the Republic."126
171. The Court of Arbitration notes that the action underlying the claim brought before the Supreme Court was an action for annulment of an administrative act (the order cancelling the Tullow Contract) based on an excess of power of the author of this act. As it stands, it cannot draw any lessons from it
118 Debit slip No. 312850 for an amount of $ 50,000 of 31 August 2007, Exhibit DM II; Debit Slip for the amount of $ 50,000 drafted by Rawbank LLC on 20 September 2007, Exhibit DM III; Debit Slip No. 319291 for an amount of $ 50,000 from 16 October 2007, Exhibit DM IV; Debit Slip for the amount of $ 50,000 drafted by Rawbank SARL on 16 October 2007, Exhibit DM V; Certificate of payment of $ 50,000 drafted by Rawbank Ltd. dated 16 October 2007, Exhibit DM VI. ↩
119 Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 23 June 2012, Exhibit DM XXXIII. ↩
120 DIGOil's letter to the Director General of the Civil Aviation Authority, 18 July 2012, Exhibit DM XXXIV; Letter from the Minister of Hydrocarbons of the Democratic Republic of Congo to DIGOil, 30 July 2012, Exhibit DM-XXXV. ↩
121 Letter from DIGOil to the Minister of Hydrocarbons of the Democratic Republic of Congo, 4 December 2012, Exhibit DM LXVIII; Letter from DIGOil to the Minister of Hydrocarbons of the Democratic Republic of Congo, 31 January 2014, Exhibit DM LXX, Letter from DIGOil to the President of the Democratic Republic of Congo, 8 May 2014, Exhibit DM LXII; Letter from DIGOil to the Minister of Hydrocarbons of the Democratic Republic of Congo, 10 September 2014, Exhibit DM LXXII. ↩
122 Letter from DIGOil to the Minister of Hydrocarbons of the Democratic Republic of Congo and to the Prime Minister, 6 April 2016, Exhibit DM-XXXVIII. ↩
123 Note from the Ministry of Hydrocarbons to the Government of the Democratic Republic of Congo, 18 October 2017, Parts DF I and DM-LIV. ↩
124 Judgment of the Supreme Court of Justice of the Democratic Republic of Congo, 10 December 2010, Exhibit DF-III. ↩
125 Post Hearing Submissions, 30 July 2018, Section 3, page 8. ↩
126 Post Hearing Submissions, 30 July 2018, Section 2, Fourth Page. ↩
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in the context of the situation before it, since, as already noted above, unlike the case before the Supreme Court, the 2007 Contract has not been cancelled and, notwithstanding the failure to issue the presidential order, the Parties remain bound by the obligations it contains.
172. It should be recalled that, according to the Respondent itself, the oil agreement approval order should be issued within "reasonable period of time for an investment contract in which the State has made a commitment".127It cannot seriously claim that a period of ten years can constitute the "reasonable period of time" during which the order of the President of the Republic may be issued. This period is not in accordance with administrative practice in the Democratic Republic of Congo that the Court of Arbitration has considered above to be around two years and four months.
173. The Court of Arbitration finally holds that the note of the Minister of Hydrocarbons of 18 October 2017128 to the Prime Minister inviting the latter to implement the procedure for issuing the presidential order approving the 2007 Contract has remained ineffective and, in an attempt to justify the breach of its obligation under the 2007 Contract, the Respondent cannot rely on dysfunctions in the administration, because the Ministries of Hydrocarbons and Finance have no means of putting pressure on the President of the Republic.129 As stated above, the issuance of the approval order is a state obligation that has not been met.
174. The Court of Arbitration therefore considers that the Respondent has committed a breach in not issuing the presidential order approving the 2007 Contract within a reasonable time.
175. The Applicant is seeking the termination of the disputed Contracts with damages (1) which it has had assessed by an independent expert (2).
176. The Applicant is requesting the termination of the Disputed Contracts on the basis of Article 82 of the Decree of 30 July 1888 which provides that:
The termination condition is always implied in synallagmatic contracts, in the event that one of the two parties does not meet its commitment.
In this case, the contract is not automatically terminated. The party in respect of which the commitment has not been executed has the choice, either to compel the other party to execute the agreement where it is possible, or to demand termination with damages. The termination must be sought in court and the Respondent may be granted a time limit depending on the circumstances.130
177. The latter provision therefore lays down the principle of judicial resolution for non-performance of contracts and it is not alleged that the Parties derogated from it, as the disputed Contract does not provide for an ex officio termination clause.
127 Note from the Minister of Hydrocarbons to the Government of the Democratic Republic of Congo, 18 October 2017, Exhibit DF I and Exhibit DM-LIV. ↩
128 Note from the Minister of Hydrocarbons to the Government of the Democratic Republic of Congo, 18 October 2017, Exhibit DF I and Exhibit DM-LIV. ↩
129 Post Hearing Submission, 30 July 302018, Section 2, fourth page. ↩
130 Decree of 30 July 1888, Contracts and Conventional Obligations (BO 1888 PP 109), Article 82, Exhibit LEX DM-II. ↩
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178. The Respondent points out, however, that "the Oil and Gas Contract is not an ordinary contract that would fully comply with the rules and principles of civil law. As a public service concession, it contains rules that fall under civil and administrative law. "131 However, it draws no consequences as to the termination of the Disputed Contracts and it is not alleged that the Respondent thus has the right to unilaterally terminate the Disputed Contracts for reasons of public interest, but only that the President of the Republic has a discretionary power for the issuance of the order of approval, so that the oil agreement would assume the character of an agreement concluded subject to a condition precedent.132
179. As the Court of Arbitration found that the Respondent had breached its obligations under each of the Disputed Contracts, the Applicant is entitled to seek termination at the cost of the Respondent with damages and interest.
180. The Applicant has made the choice, as authorised by Article 82 of the Decree of 30 July 1888, to request the termination of the disputed Contracts rather than to demand their execution. The Respondent, meanwhile, wants the Court of Arbitration to take note of its willingness to issue the presidential order for approval of the 2007 Contract and set a deadline for the performance of the obligations of the 2007 contract.133 It relies in particular on the letter from the Minister of Hydrocarbons to the Prime Minister dated 18 October 2017, in which he is asked to implement the procedure for issuing the presidential order approving the 2007 Contract.
181. The Court of Arbitration notes that the Applicant is rightly availing itself of the fact that the execution of the 2008 Contract has become impossible given the progress of work in block 1 of the Albertine Graben.134In addition, concerning the 2007 Contract, it notes that the letter from the Ministry of Hydrocarbons of 18 October 2017 has had no effect, so that the will of the Respondent to issue the presidential order of approval of the contract does not translate into reality. The Applicant cannot therefore be kept indefinitely in the contractual relationship and bear in particular the resulting structural costs pending the issuance of an order that should have been made several years ago, and could have been made since the beginning of the Arbitration.
182. It is therefore appropriate to grant the request for termination of the Disputed Contracts at the cost of the Respondent.
183. The Applicant's claim for damages in addition to the termination of the Disputed Contracts also appears to be well founded in application of the provisions of Article 82 of the Decree of July 30, 1888 quoted above, as well as those of Article 45 which provide that:
The debtor is ordered, if necessary, to pay damages, either because of the breach of the obligation, or because of the delay in execution, whenever it fails to show that the execution comes from a foreign cause which cannot be attributed to it, and that there is no bad faith on his part.135
184. It is therefore appropriate to grant the Respondent's claim for compensation to the Applicant for all the damages it suffered, which must therefore be assessed.
131 Response to the Supplementary Brief, 12 June 2018, para. 16 ↩
132 Response to the Supplementary Brief, 12 June 2018, para. 16. ↩
133 Response to the Supplementary Brief, 12 June 2018, p. 12. ↩
134 Response to the Supplementary Brief, 12 June 2018, paras. 138-141. ↩
135 Decree of 30 July 1888, Contracts or Conventional Obligations, (BO 1888 p. 109), Article 47, Exhibit LEX DM-II. ↩
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185. According to Article 47 of the Decree of 30 July 1888:
The damages and interest due to the creditor are, in general, the loss it has suffered and the gain it has been deprived of, with the following exceptions and modifications.136
186. Pursuant to this provision, the Plaintiff seeks compensation for the damage it has suffered as a result of the non-performance and termination of the disputed Contracts including, on the one hand, the loss suffered by the Plaintiff including all the expenses it incurred in the Disputed Contracts for a total amount of USD 19,552,884 and, on the other hand, the loss of profit resulting from the operating loss for the disputed Contracts in question, assessed at the sum of 597,847,994 USD.
187. The amounts claimed are those calculated by the two independent experts137 of the Deloitte Group, Mr Robin G. Bertram and Mr Anthony Charlton, who have conducted out two studies leading to the filing, on the one hand, of a technical report (the "Bertram Report ")138 in which the petroleum resources of blocks 8, 23 and 24 of the Central Basin and block 1 of the Albertine Graben were evaluated and, secondly, a financial report (the "Charlton Report").139 to estimate the economic loss suffered by the Applicant by determining the market value of each of the projects relating respectively to block 1 of the Albertine Graben and to blocks 8, 23 and 24 of the central basin of which the Plaintiff was deprived, and the expenses incurred and the payments made by the Plaintiff under the 2008 Contract and the 2007 Contract, distinguishing between those which would have been incurred as part of a normal conduct of the activities and those incurred in practice due to a breach by the Respondent of its contractual obligations.140
188. The causal link between the fault upheld by the Court of Arbitration and the alleged damage is sufficiently characterised, the non-issuance of the presidential order while the conditions required by Congolese law had been met having the direct effect of causing the Applicant a loss resulting from the expenses incurred for the performance of the Contracts in question and from depriving it of the expected gains from this execution. This direct causal link is, moreover, not contested by the Respondent, which, on the other hand, denies the certainty of the loss of profit.
189. For the reasons set out below, the Court of Arbitration considers that the loss suffered by the Applicant is a definite loss, current with respect to the loss suffered, and future with respect to the loss of profit, and it must ensure that the realisation of the latter is sufficiently probable and not hypothetical, if it is to be compensated.
(a) The loss of earnings
136 Decree of 30 July 1888, Contracts or Conventional Obligations, (BO 1888 p. 109), Article 47, Exhibit LEX DM-II. ↩
137 Although hired by the Applicant, Messrs Bertram and Charlton each intervened as independent expert: Expert report of Robin G. Bertram (Deloitte), 29 March 2018 and its translation into French; Expert Report by Robin G. Bertram (Deloitte), 29 March 2018, para. 1.2, Exhibit DM-LVII; Anthony Charlton (Deloitte) Expert Report, 30 March 2018, para. 1.2, Exhibit DM-LV. At the beginning of his examination at the Hearing, Mr Charlton further confirmed to the Court of Arbitration that (i) his duty as an expert was to inform the Court of Arbitration on the technical aspects of the dispute in his area of jurisdiction and that this duty exceeded any obligation he may have towards the Claimant and (ii) although, according to the law of the place of arbitration and Article 1467 of the French Code of Civil Procedure - which provides: "The Court of Arbitration may hear any person. This hearing takes place without taking an oath"- he is not obliged to take an oath, and his expert testimony must be independent and impartial. ↩
138 Expert report of Robin G. Bertram (Deloitte), 29 March 2018 and its translation into French, Robin G. Bertram's Expert Report (Deloitte), 29 March 2018, Exhibit DM-LVII ↩
139 Anthony Charlton Expert Report (Deloitte), 30 March 2018, Exhibit DM-LV; attachments to the Anthony Charlton Expert Report (Deloitte), Exhibit DM-LVI ↩
140 Anthony Charlton (Deloitte) expert report, 30 March 2018, para. 1.13, Exhibit DM-LVI. ↩
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190. The Respondent concedes that the damage suffered by the Applicant is direct but contests its certain character, considering that it was only possible and alleging that what is to be compensated is not the profit that the Applicant could have gained but rather the loss of opportunity to earn it. It would thus be up to the Court of Arbitration to determine the fraction of the damage corresponding to the loss of opportunity on the basis of two elements: (i) the existence of a serious chance of success and (ii) the seriousness and irreparable nature of the opportunity lost. On the first point, it points out that the reserves identified by the Bertram Report were only probable reserves and not recoverable reserves, which led it to express reservations as to the economic value of those reserves. On the second point, it takes advantage of the fact that the President of the Republic may at any time approve the 2007 Contract by ordinance, so that the chance of making a gain would not be irretrievably lost.141
191. The Respondent thus disputes the definite nature of the loss of profit and considers that the Court of Arbitration should take into consideration only the lost opportunity to make that profit. It is therefore up to the Court of Arbitration to determine the nature of the loss suffered by the Applicant.
192. A loss must be regarded as simply contingent, able to be compensated for the loss of opportunity, when its occurrence is subject to an event that is not certain, in which case the damage would be compensable as long as the probability that the expected event occurs is high.
193. In the case at hand, the Court considers that the event likely to trigger operations, and thus to allow profits to be made, is the issue of operating permits. As the Court of Arbitration noted in paragraph 139 above, in accordance with the provisions of Articles 10.3 and 10.4 of the Disputed Contracts, the Respondent was under an obligation to issue operating permits in the event of discovery of commercially exploitable resources. The issuing of such permits is therefore not possible, but constitutes a definite and direct extension of a current state of affairs that can be observed immediately, and thus constitutes a certain loss that could be compensated provided that the future favourable event is not just virtual or hypothetical.
194. The Court of Arbitration must thus ensure that the discovery of commercially exploitable resources likely to permit exploitation is of a non-hypothetical nature and sufficiently probable to justify compensation for this loss.
195. First, it notes that the Applicant has demonstrated its ability to carry out oil operations as part of the work that it has carried out in execution of the disputed Contracts. Responding to the questions of the Court of Arbitration at the hearing, the Applicant further indicated that it had retained a 5.87% interest in Block III of the Albertine Graben, the exploration of which was conducted by the oil giant Total142 and was active as a petroleum block operator, particularly in the Central African Republic. The likelihood that the Applicant will be able to carry out the oil prospecting operations and, if necessary, to mobilise a "giant" in the sector for the exploitation if necessary, seems thus sufficiently proven and has not challenged by the Respondent. The Court of Arbitration notes that the preamble of the Disputed Contracts states, as applicable, that the Applicant or the consortium of which it is one of the entities has demonstrated its technical and financial capacity in oil exploration and production.143
141 Response to the Supplementary Brief, 12 June 2018, paras. 46-50. In this regard, the Court of Arbitration first notes that it granted the request for termination of the 2007 Contract at the exclusive cost of the Respondent and that it follows that the Claimant has seriously and irretrievably lost the opportunity to make the expected gains under the 2007 Contract. In addition, the same applies to the 2008 Contract for which the exclusive rights of the Respondent have been reassigned to a third party. ↩
142 See also, Deloitte Report, Exhibits in Annex 7, Exhibit 7.1, Hydrocarbons in the Albertine Rift: Opportunities for Development or Risks of Instability? p. 32, Exhibit DM-LVI. ↩
143 2007 Contract, p. 3, Exhibit DM-VIII; 2008 Contract, p. 4, Exhibit DM-IX. ↩
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196. Regarding the probable and non-hypothetical nature of discoveries of exploitable resources in view of the probable and unproven nature of the reservations highlighted by the Bertram Report alleged by the Respondent, the Court of Arbitration notes that Mr Bertram has:
(i) adopted a probabilistic approach described in appendix 10 of the Bertram Report leading it, as is the custom in the oil industry, to evaluate on the basis of scientific data the petroleum potential of the blocks concerned according to three scenarios: the low scenario (P90), the best scenario (P50) and the high scenario (P 10), which correspond respectively to 10%, 50% and 90% probabilities that the volumes of oil extracted will be equal to or higher than estimates, so that the estimates are thus minimum estimates;144
(ii) applied the success factors to each of the three scenarios taking into account, on the one hand, the geological success chances of 0.23 for blocks 8, 23 and 24 of the Central Basin and 0.40 for the block 1 Albertine Graben based on an estimate of the hydrocarbon source rock quality, the capacity of hydrocarbon to migrate to the appropriate rock reservoir and relative trapping and containment properties of the reservoir rock145 and, on the other hand, chances of commercial success of 0.72 for blocks 8, 23 and 24 of the Central Cuvette and 0.76 for block 1 of the Albertine Graben based on the economic viability, technology and quality of the development scenario, the multiplication of the factors of chance of geological success and chance of economic success resulting in an overall chance of success of 0.16 (i.e. a rate of 16%) for blocks 8, 23 and 24 of the central basin and 0.30 (a rate of 30%) for block 1 of the Albertine Graben;146
(iii) took into account the economic parameters of the oil industry that were attributed to the estimated oil revenues, namely, operating costs, the cost of shifting oil on the market, capital investment oilfield and reclamation costs;147
(iv) adopted, on the basis of the best scenario, potential "not risky" resources from projected crude oil resource volumes of 477 MMbbl for blocks 8, 23 and 24 of the central basin and 159 MMbbl for block 1 of the Albertine Graben representing respectively a gross revenue of $ 44,694,000,000 ($ 44,694 billion) and $ 14,240,000,000 ($ 14,240 billion) of which $ 25,719,000,000 ($ 25,719 billion) and $ 4,713,000,000 ($ 4.713 billion) and potential "risky" resources taking into account success rates of 16% and 30% previously estimated, leading it to estimate the Applicant's share of 44.5 MMbbl and 15.4 MMbbl respectively representing, for the Applicant, a net income of 4.115.000.000 USD (4.115 billion) and 1.414 .000.000 USD (1.414 billion).148
197. Regarding the Central Basin, the Respondent, " while recognising, the geological and geophysical nature of the work undertaken in blocks 8, 23 and 24 of the Central Basin, and 1 of the Albertine Graben is likely to allow the identification of oil resources, reserves as to their quantity, and their recovery rate, in the absence of appraisal drilling and development. "149
144 Anthony Charlton Expert Report (Deloitte), 30 March 2018, para. 4.38, Exhibit DM-LV; Expert report by Robin G. Bertram (Deloitte), 29 March 2018, tables under paragraph 2.2, Exhibit DM-LVII. ↩
145 The Court of Arbitration notes that this rate of geological success makes it possible to take into account, in particular, the possibility raised by the Respondent in the Hearing that the possibility of drilling leading to a dry well could not be ruled out. The possibility of a dry well does not preclude the possibility that during the ZERE exploration period other drilling could lead to the discovery of commercially exploitable resources leading to the issuance of an exploitation permit. ↩
146 Expert Report by Robin G. Bertram (Deloitte), 29 March 2018, paras. 5.1 to 5.38, Exhibit DM-LVII. ↩
147 Expert Report by Robin G. Bertram (Deloitte), 29 March 2018, Section 7, paras. 7.1 to 7.26, Exhibit DM-LVII. ↩
148 Expert Report by Robin G. Bertram (Deloitte), 29 March 2018, Section 5, para. 2.5, Exhibit DM-LVII. ↩
149 Supplementary Brief, 12 June 2018, para 2 5. The Respondent states that "after a first exploratory drill which gives indications on the area and presents geologically and commercially interesting data (sic), several other ↩
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198. It emphasises that, in view of the oil work undertaken in the Central Basin which did not go beyond the stratigraphic drilling intended to proceed with the geological reconnaissance of a basin by the identification of the underlying formations, " it must be concluded that the hydrocarbon reserves are [...] still at the resource stage, the quantity of which remains to be confirmed."150 The Court of Arbitration notes that the Respondent does not dispute the volume of probable reserves adopted by Mr Bertram or the success rate of 16% that he applied to them, considering instead that this expert was careful "in not adopting the higher assumption to reflect the fact that some of the oil is not likely to be recovered. "151 The likelihood that hydrocarbon resources in the Central Basin are exploitable is thus established and cannot be considered hypothetical.
199. Concerning Block 1 of the Albertine Graben, the Respondent indicates that the company Oil of DRC, a new operator on behalf of the companies Caprikat and Foxwhelp, undertook the seismic work and declared in the press that it had discovered probable reserves of 3,000 billion barrels.152 The minutes of the meeting held on 15 August 2014, between the representatives of the Ministry of Hydrocarbons and Oil of DRC, state that:
During the [Combined Operating Committee of 8 April 2014, Oil of DRC (" OofDRC ")] had submitted to the Ministry of Hydrocarbons a detailed report on the results of two (2) seismic acquisition campaigns carried out on Block I and II. On this occasion, OofDRC also informed the Ministry of Hydrocarbons of the findings indicating the identification of seven Prospects and three Leads with an estimated value of 1.609.58 Mldbbl for the Prospects and of 1.284.43 Mldbbl for the Leads, which makes an approximate total of 2,900 Mldbbl (OIIP), precisely reported by Reuters.153
200. The Court of Arbitration notes that, although this estimate of the "probable reserves" which constitute "non-risky data" relates to blocks 1 and 2 of the Albertine Graben, they are at a much higher level than that adopted by the Bertram Report which for block 1 alone is 159 billion barrels under the assumption of the best scenario and 451 billion barrels under the assumption of the high scenario. It also notes that the Respondent itself acknowledges that Mr Bertram was cautious in not adopting the highest assumption.154 The probability that the hydrocarbon resources of block 1 of the Albertine Graben are exploitable is thus established and has a non-hypothetical character.
201. More generally, the Bertram Report notes that "risk is a subjective measure and may vary depending on the evaluator of the qualified reserves. For this reason, non-risky data is commonly presented in reserve reports. "155
202. The Court of Arbitration notes that the Respondent finds "the production of another expert report inappropriate, as the parties and the court may indeed draw their own conclusions from the technical elements contained in the Deloitte report. "156 It also notes that the Respondent has chosen not to hear
appraisal drillings are carried out to circumscribe the extent of the reinforced deposit. Only then is the effect of the appraisal drilling encashed, that is to say the extraction of the hydrocarbons from the subsoil. (Supplementary brief, June 12, 2018, para 28).
150 Response to the Supplementary Brief, 12 June 2018, paras. 24 to 26. ↩
151 Response to the Supplementary Brief, 12 June 2018, para. 27. ↩
152 Response to the Supplementary Brief, 12 June 2018, paras. 31 to 34. ↩
153 Minutes of the Eighth Extraordinary Meeting of the Operations Committee of the Albertine Graben Blocks I and II CPP, 15 August 2014, Exhibit DM-L. ↩
154 Response to the Supplementary Brief, 12 June, 2018, para.23. ↩
155 Expert Report by Robin G. Bertram (Deloitte), 29 March 2018, para .2.6, Exhibit DM-LVII ↩
156 Response to the Supplementary Brief, 12 June 2018, para. 23. ↩
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from its own experts and, in particular, from the experts of the Ministry of Hydrocarbons who have all the technical elements and analytical resources that enable them to contradict or nuance the analyses of the Bertram Report and provide the Court of Arbitration with their own estimate of the risk of success. The Respondent therefore does not submit to the Court of Arbitration any concrete assessment element enabling it to question the success rates of 16% for the Central Basin blocks and 30% for the Albertine Graben block 1 adopted by the Bertram report which, undisputed by the Respondent, on the other hand appear to be based on scientific and technical elements and a serious analysis consistent with practices in the oil industry.
203. The Court of Arbitration therefore finds that the uncertainty of the probable nature of the reserves does not seem under- estimated and has been largely taken into account by the Bertram Report. The probable and non-hypothetical nature of exploitable resources has thus been established and, therefore, the Bertram Report has been able to provide a sound technical basis for the long-term evaluation of the Charlton Report.
204. The Charlton Report estimates the economic loss suffered by the Applicant by determining, on the one hand, the market value of each of the projects relating respectively to block 1 of the Albertine Graben (the "Albertine Project") and to blocks 8, 23 and 24 de la Central Basin (the "Basin Project"), which the Applicant was deprived of because of the Respondent's breach of its contractual obligations, and, on the other hand, the expenses incurred and the payments made by the Applicant in connection with the 2008 Contract and the 2007 Contract, distinguishing between those that would have been incurred as part of normal business conduct and those incurred as a result of the Respondent's non-compliance with its contractual obligations.157
205. It has applied the discounted cash flow method ("DCF"), which is a recognised and commonly used method in the world of finance for the evaluation of projects and companies, excluding, on the one hand, the analogous approach based on the substitution principle that a prudent investor would not pay more for an asset than the cost of an equivalent asset with the same utility because of the lack of public information available on such transactions and, on the other hand, the asset approach which amounts to separately estimating the various assets, divisions or subsidiaries of the company and subtracting the value of the net debt which is more suitable for the valuation of a holding company or a property company but does not make it possible to take intangibles (goodwill) into account. It reiterates in this respect that it does not seek to estimate the value of the Applicant as such but the value of the Albertine Project and the Basin Project. The DCF method estimates the value of an asset based on the cash flows generated over the life of the project, discounted at the average rate of return to bring the net value of the project back to the valuation date selected, 31 December 2017.158 The application of this method is not criticised by the Respondent which points out that "the reports are structured in accordance with international standards"159 In this case, with respect to the assessment of future losses and a long-term project, it appears to be the most appropriate method.
206. Mr Charlton then conducted his analysis in four main stages, summarised in paragraph 4.49 of the Charlton Report as follows:
(i) determination of income (volume of oil extracted in MMbbl x average annual price of BRENT on the basis of discounted price forecasts as at 31 December 2017) to be taken into account from the elements corresponding to the three "no risk" scenarios of the Bertram report;
(ii) deduction of Royalty and Profit Oil as provided for in the Disputed Contracts;
157 Anthony Charlton (Deloitte) Expert Report, 30 March 2018, para. 1.13, Exhibit DM-LV. ↩
158 Anthony Charlton (Deloitte) Expert Report, 30 March 2018, paras. 4.20 to 4.24, Exhibit DM-LV. ↩
159 Reply to the Supplementary Brief, 12 June 2018, para. 23. ↩
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(iii) deduction of costs including the economic parameters related to the oil industry taken into account by the Bertram Report, contractual payments to be made by the Applicant (bonuses and contributions) and fixed and structural costs that were not taken into account by Mr Bertram;
(iv) 16% for the Basin Project and 30% for the Albertine Project included in the Bertram Report and a discount factor of 18.8%.
207. The Applicant's loss of earnings corresponds to its share in the value of each of the projects and was evaluated on the basis of the weighted average of the values determined under the high, best and low scenarios in a proportion of 30%, 40% and 30% respectively (Swanson average). The Applicant's share calculated by Mr Charlton amounts to $ 230.2 million as at December 31, 2017 for the Basin Project and $ 361.5 million for the Albertine project individually. The combined value of the Albertine Project and the Basin Project estimated at US $ 597.8 million is nevertheless greater than the sum of the individual values above because of the economies of scale which make it possible to allocate half of the fixed or structural costs to each project.160 This approach is consistent with practice in the oil sector, and is not disputed by the Respondent.
208. The Applicant points out that Mr Charlton compared the price of the barrel adopted for his assessment of the loss of earnings - USD 1.27 per barrel - with the price per barrel adopted for the recent sale by Tullow Oil to Total E & P Uganda BV of its interest in blocks 1, 1 A, 2 and 3A on the Ugandan side of the Albertine Graben basin, the price of this transaction having been calculated on the basis of a barrel at 3.48 USD,161 so that the calculation of the loss of earnings on the basis of a price of $ 1.27 is quite prudent and reasonable. It also relies on the opinion of Philip Dimmock, who specializes in oil valuation162, who considers that the Charlton Report (i) takes negative values for the three blocks of the Central Basin, which lowers the averages, whereas negative values do not usually appear in the calculation of averages,163 (ii) adopts a 40% success rate for block 1 of the Albertine Graben while it is already established that the percentage of success varies between 86 and 87% for the blocks of the Albertine Graben located in Uganda164 and (iii) uses a discount rate of 18.8% while the usual rate in the oil industry is 15%.
209. The Respondent, on the other hand, reiterates with respect to the calculation of the loss of profits the comments it made concerning the probable nature of the reservations and underlines that "the expert was rightly cautious" concerning the costs because "they must be estimated taking into account the fact that there was no exploration and exploitation except the aeromagnetic and gravimetric campaigns. "165 It argues:
Ultimately, the figure of 597.8 million USD is subject (sic) to change down upwards, following other evaluation drilling and development work to be carried out and expenses, costs and expected operational risks.166
210. The Court of Arbitration notes, moreover, that the three points raised by Mr Dimmock and reported in paragraph 209 above may explain why the initial claims of the Applicant were much higher
160 Anthony Charlton (Deloitte) Expert Report, 30 March 2018, paras. 4.69 to 4.77, Exhibit DM-LV. ↩
161 Letter from Mr Philip Dimmock, 30 April 2018 Exhibit DM-LVIII and its free translation in French, Exhibit DM-LIX. ↩
162 Letter from Mr Philip Dimmock, 30 April 2018 Exhibit DM-LVIII and its free translation in French, Exhibit DM-LIX. ↩
163 The calculation of the Swanson mean for the three blocks of the Central Basin does show negative values (Charlton Report, para. 4.73). ↩
164 Although not stated, the Court of Arbitration notes that this is the percentage of geological success and not the percentage of success that is 30%. ↩
165 Response to the Supplementary Brief, 12 June 2018, paras. 36 to 45. ↩
166 Response to the supplementary brief, 12 June 2018, para. 47. ↩
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than those adopted by Mr Charlton. The quantification of its request was reduced by the Applicant after it was able to see the first analyses of its consultant and then during the communication by the Applicant of the Charlton Report. The Court of Arbitration has thus found no concrete evidence to allow it to criticise and deviate from Mr Charlton's evaluation by justifying it in any way other than arbitrarily.
(b) The loss suffered
211. Mr Charlton has assessed the expenses incurred by the Applicant under the Disputed Contracts at $ 19,552,884, the list of each expense borne by the Applicant being contained in Annex 13 to the Charlton Report. These expenses include all the contractual and operational expenses taken into account in the calculation of the loss of earnings, so that they could be maintained in the calculation of the loss without risk of double compensation and the expenses incurred in the framework of the dispute.167 The expert was provided, for each expense, with (i) proof that the expense is related to the disputed Contracts, (ii) the invoice and (iii) the proof of payment, listed in Annex 2 of the Charlton Report. He then classified the expenses into two categories: (i) so-called "Level I" expenditures, for which he obtained an invoice and proof of payment, and was able to establish that the expenditure incurred under the Albertine Project of the Basin Project, amounted to 18,690,786 USD and (ii) the so-called "Level II" expenses, for which he received an invoice or proof of payment and was able to establish a link with the disputed Contracts, come to 862.098 USD.168 This latter category takes into account the time elapsed, the economic environment and the legal environment in which the Applicant operated at the launch of the projects.169 He applied a conversion rate in USD when the expense was denominated in another currency170 and an interest rate based on an annual interest mix to determine the value of the expenses incurred by the Applicant as of 31 December 2017.171
212. The Respondent relies on the wisdom of the Court of Arbitration for the assessment and authenticity of Level I expenditure evidence, and on the other hand considers that Level II expenses should be rejected, any expense that is not documented on the basis that the payment method in the DRC is in cash, without trace of payment, not able to be taken into account and to be discarded.172
213. The Applicant emphasises that "if Level II expenditures do not meet the applicable standards within the Deloitte Group to adopt them in Level I, it is apparent from Annexe 13.12 of the report by the expert Charlton (DMLV) that the reality of such expenditure is sufficiently established in relation to applicable law by the production for each of these expenses of an invoice or proof of payment in connection with the 2007 and 2008 contracts" and that "numerous expenses for a total amount of greater than US $ 6 million, are not documented by an invoice or proof of payment because of the economic reality in the Democratic Republic of Congo" and "were rejected by the expert Charlton " so that "the actual amount of the loss suffered by [the Applicant is] well above the amount calculated by the expert Charlton".173
214. The Court of Arbitration notes, first, that Mr Charlton rejected numerous expenses as not sufficiently related to the Disputed Contracts, the Applicant's claims in this regard having been initially
167 Report by Anthony Charlton (Deloitte), 30 March 2018, para. 5.2, Exhibit DM-LV. ↩
168 Report by Anthony Charlton (Deloitte), 30 March 2018, Table 5.5 under paragraph 5.87, page 59, Exhibit DM-LV. ↩
169 Report by Anthony Charlton (Deloitte), 30 March 2018, paras. 5.4 to 5.9, Exhibit DM-LV. ↩
170 Report by Anthony Charlton (Deloitte), 30 March 2018, para 5.10, Exhibit DM-LV. ↩
171 Report by Anthony Charlton (Deloitte), 30 March 2018, paras. 5.10, DM-LV Part. ↩
172 Response to the Supplementary Brief, 12 June 2018, paras. 52 to 54. ↩
173 Response to the Supplementary Brief, 12 June 2018, para. 266-271. ↩
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quantified at US $ 23,882,537.174 In addition, the Respondent does not deny being liable for the loss incurred in respect of Level I expenses. Having examined the relevant expenses and questioned Mr Charlton at the hearing, who confirmed that he had received and verified all the invoices, the evidence of payment and the contracts relating to the expenses incurred detailed in appendices 13.1 to 13.12 to his report, the Court of Arbitration considers that all these Level I expenses are clearly established as being actually borne by the Applicant in connection with the Contracts in question, so that they must be included in the loss suffered.
215. With respect to Level II expenses, the Respondent was able to challenge each of the expense items selected by the Expert in Annex 13.12. These expenses relate to certain geoscience studies, consulting fees, marketing expenses, travel expenses, accommodation expenses and legal expenses related to the litigation. Mr Charlton described the evidence available to him which showed that in each case he had either an invoice or proof of payment and was able to establish a link with the Disputed Contracts. The Respondent was thus in a position to criticise each expense, item by item, and refrained from doing so, limiting itself to a critique of principle without any real evidence.
216. The Court of Arbitration therefore considers that Level II expenditures are sufficiently documented and should be included in the loss incurred.
217. Accordingly, the Respondent must pay the Applicant the sum of USD 597,847,994 in compensation for the loss of profit resulting from the operating loss for the Disputed Contracts and USD 19,552,884 for the expenses incurred by the Applicant in the context of the Disputed Contracts.
218. The Applicant considers that the Respondent should be ordered to pay the full costs and expenses of the Arbitration amounting to US $ 2,043,972.21 plus interest at the calculated rate of return on 20 year Treasury bonds plus 2% from the date of the award until the full payment date.175 The Respondent, for its part, relies on the wisdom of the Court of Arbitration stating that it "can only bear the costs for which it is actually accountable."176
219. In accordance with Procedural Order No. 5 of 2 July 2018, the Parties submitted their quantified claims for the reimbursement of the costs incurred in their defence and the supporting documentation of these costs.
220. The Court of Arbitration will determine below the rules applicable to the issue of the costs of the arbitration (1) before deciding to which Party the payment is due or in what proportion it is shared between them (2).
221. In accordance with Rule 37.4 of the Regulations,
The final award of the Court of Arbitration shall settle the costs of the arbitration and decide to which part the payment is due or in what proportion it is shared between them.
222. According to section 37.1 of the Regulations,
174 Terms of Reference, 29 August 2017, para. 74 ↩
175 Comment Note on Refund of Fees and Cost of Arbitration, 31 August 2018, page 10. ↩
176 Response to the Supplementary Brief, 12 June 2018, para 58. ↩
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The costs of the arbitration include the fees and expenses of the arbitrators and the administrative costs of the ICC determined by the Court, in accordance with the calculation tables in force at the time of the commencement of the arbitration, the fees and expenses of the Experts appointed by the Court of Arbitration and the reasonable awards made by the Parties for their defence in the course of the arbitration.
223. Article 37.5 of the Regulations further specifies that:
When ruling on costs, the Court of Arbitration may take into account the circumstances that it considers relevant including the extent to which each party has conducted the arbitration expeditiously and effectively in terms of costs.
224. It follows from the above-mentioned provisions of Articles 37.4 and 37.5 of the Regulations that the Court of Arbitration has a wide margin of assessment as to the apportionment of the expenses of the arbitration.
225. This margin of assessment is not governed by any mandatory legislative provision of the place of arbitration that the Court of Arbitration is required to apply, or by any contractual stipulation that would modify or derogate from the aforementioned provisions of the Regulations.
226. In exercising its discretion, the Court of Arbitration may take into account, in particular, two generally accepted approaches in this respect, one allocating costs according to how each Party prevailed upon it in its claims, the other considering that each Party should bear the burden of its own costs. In addition, the Court of Arbitration may have a different approach to the costs set by the Court, on the one hand, and for defence costs, on the other. In fact, while the former are determined by the Court regardless of the Parties according to the table of calculation, the latter depend on the plea they submit for their defence, and only those which are reasonable are covered by 37.1 of the Regulations as being eligible for recovery. That distinction may, moreover, be compared, in French proceedings of the place of arbitration, with the difference between costs, on the one hand, and irrecoverable costs, on the other.
227. The Court of Arbitration shall successively consider the costs fixed by the Court (a) and the reasonable costs incurred by the Parties in their defence in the arbitration.
(a) Costs set by the Court.
228. By agreeing to comply with the ICC Arbitration Rules in the Disputed Contracts, the Parties have agreed to bear the risk of the Court's provision for arbitration costs, i.e. the fees and expenses of the Court of Arbitration as well as the administrative costs of the ICC that can be estimated on the basis of the total amount of the applications and the calculation table applicable at the time of the commencement of the Arbitration. The Court of Arbitration therefore considers that the costs fixed by the Court should be apportioned according to the manner prevailed upon by each party in its claims.
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229. In this case, the arbitration provision was calculated on the basis of a disputed amount of USD 617,400,878177 and its amount was set by the Court at USD 760,000 which was paid in full by the Applicant.178
230. The Court of Arbitration holds that the Applicant has prevailed in all its claims, including the amount of the damages sought on the basis of which the provision for arbitration was calculated, even though its initial claims were at a much higher level of 5 billion US dollars, so the decrease in claims did not affect the calculation of the provision.
231. The fees and expenses of the members of the Court of Arbitration and the administrative expenses of the ICC were fixed by the Court at its session of 25 October 2018 at the sum of 691,437 EUR.179
232. As these costs were borne in full by the Applicant, the Respondent must reimburse the Applicant the amount of USD 760,000 which it has advanced.
(b) The costs incurred by the Parties in their defence
233. In its Observation Note on costs sent to the Court of Arbitration on 31 August 2018, the Applicant submits fees for a total amount of USD 2,043,972.21, broken down as follows:
| (a) | provision for arbitration costs | $ 760,000.00 |
| (b) | room booking fees | $ 5,238.68 |
| (c) | interpreting fees | $ 9,911.96 |
| (d) | legal counsel fees | $ 648,272.71 |
| (e) | technical advisory fees | $ 620,548.86 |
234. The Respondent's letter of 15 September 2018 shows fees for a total amount of USD 160,500 broken down as follows:
| (a) lawyers' fees | 150,000 USD |
| (b) travel and living expenses (Conference No. I) | 7.500 USD |
| (c) entertainment and subsistence costs (Hearing) | 3.000 USD |
235. The Court of Arbitration will consider whether the categories of costs for which reimbursement is claimed are recoverable before determining those that may be considered reasonable and allocate them among the Parties.
236. The costs that can be claimed. In addition to the costs fixed by the Court, i.e. the fees and expenses of the arbitrators and the administrative costs of the ICC, pursuant to Article 37 of the Rules, the Parties are obliged to claim under the Rules any reasonable costs incurred in their defence "on the occasion of the arbitration". It is generally considered that the costs incurred by the parties in their
177 The financial table of 16 July 2018 shows that the arbitrage provision has been revalued on the basis of a disputed amount of USD 617,400,878. The fact that the claim was initially quantified at USD 5 billion and then at USD 2 billion before being reduced to USD 617,400,878 after the disclosure by the Plaintiff of the Charlton Report, therefore had no impact on the amount of the provision. ↩
178 Financial Table of 14 September 2018. ↩
179 Financial Table of 29 October 2018. ↩
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defence include counsel's costs and outgoings of the parties and their counsel for hearings and meetings, the cost of experts hired by the parties, witnesses, translators and interpreters, including their travel and subsistence expenses for hearings or meetings with counsel. In addition, the costs of arbitration also cover the costs incurred for the organisation of the hearing, including stenotyping and room booking fees for the hearing and related services.
237. The Court of Arbitration notes that the costs submitted by the Parties fall within the above-mentioned cost categories and may be considered recoverable.
238. The Court of Arbitration notes, however, that the Applicant's legal fees include, among others, the fees of two specialised oil law and oil industry advisors in Africa, Stacey Kivel and lan Levit, for respective amounts of USD 189,486,71 and USD 19,129.09.180
239. Mrs Stacey Kivel, the Applicant's usual counsel, was present at the hearing, and her services are the subject of three invoices for respective amounts of 59,336.71 USD, 85,825.00 USD and 44,325.00 USD.181 However, the first two invoices have been taken into account by the Deloitte Report as Level II expenditure which the Court of Arbitration has included in the calculation of the loss incurred. The Applicant therefore has no grounds to request the reimbursement of these two invoices for the costs of the arbitration and, consequently, only the sum of 44,325.00 USD will be taken into account.
240. Mr lan Levit did not appear in the procedure and the Applicant gives his address as address of service.182The Court of Arbitration notes that invoices from this counsel between 28 April 2017 and 28 February 2018 are included in Level II expenses for a total amount of $ 19,242 and that the 28 March 2018 invoice for an amount equivalent to 19,129,09 USD is a pro forma invoice for "work done legal advice ICC Arbitration Divine Inspiration Group (Pty) Ltd. vs the Democratic Republic of Congo with (ref. 22370 / DDA) - monthly retainer." The Court of Arbitration considers that this pro forma invoice is not accompanied by any information enabling it to assess the merits of the payments made, so that this amount will not be retained.
241. As a result, legal fees that can be recovered are reduced to USD 483,981.91 (USD 648,272.71 - USD 164,290.80).
242. In addition, the Respondent opposes the reimbursement of the costs of an expert report that was not ordered by the Court of Arbitration.183 These costs amount to $ 570,000 in respect of Deloitte, plus the costs of various technical consultants.
243. The Court of Arbitration notes that Rule 25 of the Regulations, called " Investigation of the Case", provides the Court of Arbitration with two non-exclusive possibilities which may lead it to decide (i) to hear experts appointed by parties in their presence or those duly convened184 and / or (ii) after consulting the parties, to appoint one or more experts, giving the parties, where appropriate, the opportunity to question the expert at the hearing.185 In this case, Mr Charbon was heard at the hearing on the Deloitte Report which provided the Court of Arbitration with serious and useful analysis that did not make it necessary to use an expert appointed by the Court of Arbitration. It would thus seem unfair to leave the Respondent to bear this expense on the sole ground that it was not ordered by the Court of Arbitration. It should be pointed out that, as formulated in the Terms of Reference, the requests referred to the appointment of an expert by the Court of Arbitration for the purpose of
180 Cost Observation Note, 31 August 2018, para. 10. ↩
181 Cost Observation Note, 31 August 2018, Annexes No. 9, 10 and 11. ↩
182 Certificates of registration of the company DIGOil, Exhibit DM-I. ↩
183 Response to the Supplementary Brief, 12 June 2018, para. 57. ↩
184 ICC Arbitration Rule 23.3 ↩
185 ICC Arbitration Rule 23.4 ↩
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assessing the Applicant's loss.186 The use of an expert hired by the Applicant, whose request was set out in the Terms of Reference of 30 December 2017, has led to efficiency gains since the procedure was able to make progress by avoiding splitting it into two phases and by keeping the hearing on the date originally set.
244. The Court of Arbitration therefore considers that the expert's fees are recoverable by the Applicant in view of the seriousness of the Deloitte Report and its usefulness in determining the dispute, which are not disputed.
245. Technical consulting fees also include:
(i) an invoice from Ackermann Exploration on 18 December 2017 for an amount of GBP 2,500 or USD 3,329.187 However, this invoice was taken into account by the Deloitte Report for Level I expenses for the paid portion of GBP 793.83 and for Level II expenses for the balance of USD 2,286. Since the Court of Arbitration has included the expenses of Part II in its assessment of the loss suffered, the Applicant is therefore not entitled to seek reimbursement for the costs of the arbitration. As a result, this invoice will not be taken into account here.
(ii) A bill from London Security Group of 13 March, 2018188 for the amount of GBP 5,000, or USD 6,418.79. This bill was taken into account by the Deloitte Report as Level I expenditure for the paid portion of GBP 1,250 and level II expenditure for the balance of USD 5,246. Since the Court of Arbitration has included the Level II expenses in the calculation of the loss suffered, the Applicant therefore has no grounds to seek reimbursement for the costs of the arbitration. As a result, this invoice will not be taken into account here.
246. The technical advisory fee is therefore $ 610,801.07 ($ 620,548.86 - $ 9747.79);
247. The total costs that may be recovered by the Applicant in respect of the costs incurred in its defence on the occasion of the arbitration amount to $ 1,109,933.62.
248. The reasonableness of the costs. There is a great disparity between the cost categories claimed by the Parties and a large difference in their amount. This disparity, however, reflects their respective behaviour in the conduct of the arbitration, and the high costs incurred by the Applicant compared to those of the Respondent can be explained, in particular, by the fact that the latter had to bear the entire costs of the arbitration provision and having an expert establish a report, the seriousness of which has been acknowledged by the Respondent itself.
249. The costs thus borne by the Applicant do not appear disproportionate to the provision for arbitration costs and the disputed amount, and the Court of Arbitration considers that they are reasonable, as are the fees of counsel and outgoings advanced by the Respondent.
250. The distribution of costs incurred by the Parties in their defence. The Court of Arbitration considers that all the costs incurred by the Applicant in its defence that the Court of Arbitration considered recoverable and reasonable must be borne by the Respondent.
251. It should be noted that the Applicant did everything possible to avoid resorting to the arbitration procedure which alone allowed it to assert its rights. From the beginning of the dispute with the Respondent, it adopted an approach seeking amicable resolution of the dispute and made an economically advantageous proposal for the Respondent in that, through a mechanism for offsetting
186 Terms of reference, 29 August 2017, para. 50. ↩
187 Cost Observation Note, 31 August 2018, Annex No. 29. ↩
188 Cost Observation Note, 31 August 2018, Annex No. 30. ↩
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in kind, it avoided burdening the state budget with large sums. The Applicant has maintained this process of amicable resolution of the dispute for six years during which the Respondent has only partially implemented the mechanism for offsetting in kind, relying, successively, on the introduction of the 2015 Law and then its implementing decrees, and finally the fact that the issuing of the Presidential Order of Approval of the 2007 Contract could still occur and was imminent. These circumstances appear relevant to the Court of Arbitration for its decision on the allocation of costs incurred by the Parties in their defence.
252. It would thus appear unfair for the Applicant to bear the reasonable costs it has incurred in its defence and which will therefore be borne by the Respondent, which, on the other hand, must cover its own defence costs.
253. As a result, the Respondent is ordered to pay the plaintiff the amounts of USD 760,000 and USD 1,109,933.62, for a total of USD 1,869,933.62.
254. The Applicant asks the Court of Arbitration to award any interest penalty calculated on the rate of return on 20-year US Treasury bonds, plus 2%, from the date of the award to full payment of the sums owed by the Respondent to the Applicant. It emphasises that a ruling accompanied by the payment of such interest for late payment is part of the full compensation for its loss and cannot be prejudicial to the Respondent, which will not be liable for any of them if it executes the sentence promptly, so late interest is not a penalty but is only intended to maintain the value of money as time goes by.189
255. The Respondent considers that it "cannot pay late interest that was not provided for" in the disputed Contracts.190
256. The Court of Arbitration notes that the Respondent does not claim that such interest for late payment was prohibited under Congolese law. In addition, the demand for late payment interest does not relate to contractual late payments but to the amount of compensation assessed by the Court of Arbitration and aims to preserve the value of money over time. It is therefore compensatory in nature and participates in the full reparation of damages, the principle of which is well established in Congolese law.
257. The Court of Arbitration thus holds that, as made by the Applicant, the claim for payment of arrears is an ancillary measure to compensation for damages. Indeed, as was discussed at the hearing, the Court of Arbitration notes that the minutes of the meeting from December 9 to 17, 2018 indicate an interest on the HQSE of 30%191 over two years, which corresponds to a rate of 15% a year. In addition, the rate of return on 20-year US Treasury bonds requested is a risk-free rate192 much lower and consistent with the US dollar, which is the expected deviation from the disputed Contracts and that of the awards handed down. The increase of two points also makes it possible to get closer to rates applied in South Africa and to a lesser extent in the Democratic Republic of Congo. This rate plus two points has been taken into account by the Expert for the estimate at 31 December 2017 of the
189 Response to the Supplementary Brief, 12 June 2018, paras. 280 to 282. ↩
190 Response to the Supplementary Brief, 12 June 2018, para. 57. ↩
191 Report of the Democratic Republic of Congo (Ministry of Hydrocarbons) on work on the compensation to be paid by the Congolese State in favour of Divine Inspiration Group from 9 to 17 December 2010, conclusions, page 3, second paragraph DM-XXII. ↩
192 At 31 December 2017, this rate stood at 2.6%. Report by Anthony Charlton (Deloitte), 30 March 2018, Annex 11, paras 1.19 to 1.21, Exhibit DM-LV. ↩
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net value of the expenses incurred and has not been criticised as such by the Respondent. It can thus be adopted by the Court of Arbitration.
258. The late interest is therefore due by the Respondent at the rate requested. It will commence from the date of the Final Award and will remain due until full payment.
259. As a result, the Court of Arbitration decides that the pecuniary decisions made in the context of this Final Award will be increased by the interest calculated on the rate of return on 20-year US Treasury bonds, plus 2% from the date of the Final award and until full payment.
260. For the reasons set out above, the Court of Arbitration:
(a) ACKNOWLEDGES the Respondent's withdrawal of its plea of inadmissibility based on the Divine Inspiration Group's (PTY) standing to bring proceedings and the withdrawal of its counterclaim;
(b) HOLDS that the Democratic Republic of Congo has committed a breach in not delivering to the Divine Inspiration Group (PTY) Ltd., the Presidential Order of Approval (i) of the Production Sharing Contract concluded between the Democratic Republic of Congo, on the one hand, and the Divine Inspiration Group (PTY) Ltd., and on the other la Congolaise des Hydrocarbures, Blocks 8, 23 and 24 of the Central Basin of 14 December 2007 and (ii) of the Production Sharing Contract concluded between the Democratic Republic Congo, on the one hand, and, on the other hand The Consortium Divine Inspiration Group (PTY) Ltd. Petro SA, H-Oil Congo Limited, la Congolaise des Hydrocarbures, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Block 1 of the Albertine Graben, 21 January 2008;
(c) HOLDS that the Democratic Republic of the Congo has committed a breach in seeking unilateral termination of the Production Sharing Agreement concluded between the Democratic Republic of Congo, on the one hand, and on the other the Consortium Divine Inspiration Group (PTY) Ltd. Petro SA, H-Oil Congo Limited, la Congolaise des Hydrocarbures, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Block 1 of the Albertine Graben, 21 January 2008;
(d) ORDERS the termination at the exclusive cost of the Democratic Republic of Congo (i) of the Production Sharing Agreement concluded between the Democratic Republic of Congo, on the one hand, and the Divine Inspiration Group Association (PTY), on the other hand Ltd. and la Congolaise des Hydrocarbures, for Blocks 8, 23 and 24 of the Central Basin of 14 December 2007 and (ii) the Production Sharing Contract concluded between the Democratic Republic of Congo, on the one hand, and, on the other hand, the Consortium Divine Inspiration Group (PTY) Ltd. Petro SA, H-Oil Congo Limited, la Congolaise des Hydrocarbures, Congo Petroleum and Gas BVBA, Sud Oil BVBA, Block 1 of the Albertine Graben, 21 January 2008;
(e) HOLDS that the Democratic Republic of Congo must fully compensate Divine Inspiration Group (PTY) Ltd. for all damages suffered as a result of the non-performance and termination of the aforementioned contract of 14 December 2007 and of 21 January 2008;
(f) HOLDS that the Democratic Republic of Congo must pay to Divine Inspiration Group (PTY) Ltd. the sum of USD 617,400,178 plus interest calculated at the rate of return on 20-year US Treasury bonds plus 2% from the date of the final award until full payment;
(g) HOLDS that the Democratic Republic of Congo shall bear the full costs of the Arbitration fixed by the Court at the sum of EUR 691,437, and the costs incurred by the Applicant in its defence for the amount of USD 1,109,933.62.;
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(h) HOLDS that the Democratic Republic of Congo must pay to Divine Inspiration Group (PTY) Ltd. amounts of USD 760,000 and USD 1,109,933.62 plus interest calculated at the rate of return on 20-year US Treasury bonds plus 2% from the date of the final award until full payment;
(i) REJECTS all other requests from the Parties
Issued in 10 copies
Place of Arbitration: Paris, France
7 November 2018
Professor Grégoire Balcandeja wa Mpungu
Co-arbitrator
Signature
Mrs Ghizlane El Idrissi
Co-arbitrator
Signature
Christine Lécuyer-Thieffry
President of the Court of Arbitration
Signature