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Omega Engineering LLC & Oscar Rivera v.
Republic Of Panama

ICSID Case No. ARB/16/42

Claimants' Opening Statement

February 24, 2020

[Page 2]

CLAIMANTS' OPENING STATEMENT

[Page 3]

CLAIMANTS

Oscar I. Rivera

100% Ownership

Omega U.S.

[Page 4]

CLAIMANTS HAVE A LONG HISTORY OF IMPRESSIVE PERFORMANCE

(C-0615)

[Page 5]

CLAIMANTS MADE SUBSTANTIAL INVESTMENTS IN PANAMA

Oscar I. Rivera

100% Ownership

Goodwill

Omega U.S.

Intangible Assets

Omega Panama

Omega Consortium

[Page 6]

CLAIMANTS MADE SUBSTANTIAL INVESTMENTS IN PANAMA

Claimants' Investment

[Page 7]

CLAIMANTS MADE SUBSTANTIAL INVESTMENTS IN PANAMA

Claimants' Investment

Mr. Rivera's
Experience
Expertise
Reputation

[Page 8]

CLAIMANTS MADE SUBSTANTIAL INVESTMENTS IN PANAMA

Claimants' Investment

Mr. Rivera's
Experience
Expertise
Reputation

Claimants'
Goodwill

[Page 9]

CLAIMANTS MADE SUBSTANTIAL INVESTMENTS IN PANAMA

Claimants' Investment

Mr. Rivera's
Experience
Expertise
Reputation

Claimants'
Goodwill

The Omega
Consortium
Contracts

[Page 10]

CLAIMANTS SUCCESSFULLY WON NUMEROUS GOVERNMENT CONTRACTS

[Page 11]

CONTAINS PROTECTED INFORMATION

CLAIMANTS' INVESTMENT WAS A PROVEN FINANCIAL SUCCESS

[Page 12]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

[Page 13]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

Herrera states, "Until I left my position as Director, in the summer of 2014, there were no major problems with the Omega Consortium's performance of the work"
(June 30, 2014)
Herrera ¶ 12

[Page 14]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

"I send you my greetings and congratulations on your hard work in carrying out your activities.
The National Institute of Culture (INAC), on whose behalf I am acting, wishes to deeply thank the Omega Consortium and the Sub-Contractors for the support provided for the dismantling and mobilization work carried out in the offices of the National Directorate of Historical Heritage (DNPH), the Administration of the Museum and Storage, located in the Reina Torres de Arauz Museum, to continue with the construction works on the Ciudad de las Artes Project.
We hope to be able to continue to count on your collaboration and support in any other activity required for the duration of the project."
(December 19, 2013)
C-0636

[Page 15]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

"INAC started withholding approval of payment applications"
(July 2014)
Buendia ¶ 18

[Page 16]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

"In the meeting held yesterday, September 24, 2014 with the of Legal Affairs Directorate of INAC, we informed them of the importance of responding to OMEGA regarding the Certificates of Partial Payment Nos. 13, 14 and 15, which were duly approved by INAC's Inspectors and the Comptroller General's Office. It was explained that the delay in this process is seriously affecting the cash flow of the Contractor.
(September 24, 2014)
C-0593

[Page 17]

RESPONDENT'S MISCONDUCT EXEMPLIFIED: THE CIUDAD DE LAS ARTES PROJECT

Contract Signed
(July 6, 2012)
[C-0042: Contract No. 093-12 dated 6 July 2012]

Comptroller General's Endorsement
(Sept. 19, 2012)
[C-0042]

Order to Proceed with Work No. 1
(Sept. 27, 2012)
[C-0113: Notice to Proceed for Contract No. 093-12 dated 22 Sept. 2012]

Order to Proceed with Work No. 2
(April 22, 2013)
[C-0150: Notice to Proceed for Contract No. 093-12 dated 22 Apr. 2013]

Letter from INAC
(Dec. 19, 2013)
[C-0636: Letter No. 098-13 from INAC to Omega dated 19 Dec. 2013]

Varela is Elected
(May 4, 2014)

Last Comptroller General Endorsed Payment to Omega
(June 2014)
[C-0286: CPP No. 12 dated 16 May 2014]

Varela Inauguration
(July 1, 2014)

MEF slashes Project budget by 80%
(Sept. 8, 2014)
[C-0067: 2015 Budget presented by Panama's National Assembly dated 8 Sept. 2014]

INAC orders Omega to continue working without pay
(Oct. 23, 2014)
[C-0595: Meeting minutes between Omega and INAC representatives dated 23 Oct. 2014 at #4]

INAC terminates the contract by administrative resolution
(Dec. 23, 2014)
[C-0044: Resolution No. 391-14 DG/DAJ from INAC dated 23 Dec. 2014]

President Varela's Cabinet approved the budget proposal.
(Mid-August 2014)
Zarak ¶ 8
"The MEF was aware that the Ciudad de las Artes Project was significantly behind schedule . . . . The Ciudad de las Artes Project was considered a high-risk project."
(September 2014)
Zarak ¶ 15
The INAC confirms intent to pay to Credit Suisse, not Omega
(March 15, 2015)
C-0606

[Page 18]

RESPONDENT BLOCKED OMEGA FROM OBTAINING ANY NEW GOVERNMENT CONTRACTS

[Page 19]

PRESIDENT VARELA PERSONALLY CONTROLLED BUDGET DECISIONS

[08/15/17 8:59:14 a.m.] Minister of Economy and Finance: President, the additional funds for the MINSA (Ministry of Health)in order to pay IBT's CNOs (No Objection Certificates) are 41.6 million and not 40, meaning I have to cut back 1.6 from another institution. Should I cut it back from the MOP (Public Works Ministry) or the ATP (Environmental, Territorial and Participative Policy)?
[08/15/17 8:59:50 a.m.] Jj: Mop
[08/15/17 9:00:05 a.m.] Jj: Give them less
[08/15/17 9:00:13 a.m.] Jj: We'll handle it later

C-0834: Chat with Dulcidio de la Guardia, then-Minister of Finance & Economy dated 24 Apr. 2017 through 12 Oct. 2018

[09/16/18 12:27:27 p.m.] +507 6616-4102: Another thing: I have a meeting with the Mexicans from Soho, they are coming on Tuesday, September 25. They say they will have the offer ready.
[09/16/18 12:36:26 p.m.] Jj: Ok, let's hold off on that
[09/16/18 12:36:26 p.m.] Jj: Until they ask for it
[09/16/18 12:36:46 p.m.] Jj: Raul Hernandez has been very disrespectful
[09/16/18 12:36:55 p.m.] Jj: But I do want to pay
[09/16/18 12:37:30 p.m.] Jj: They're friends
[09/16/18 12:37:30 p.m.] Jj: Hold on to it until they call
[09/16/18 12:37:34 p.m.] +507 6616-4102: Ok

C-0819: Chat with Eyda Varela de Chinchilla, then Panama's Minister of Economy & Finance dated 14 Sep. 2018 through 5 Oct. 2018

[Page 20]

PRESIDENT VARELA DIRECTED ASSAULT

[3/3/16, 7:43:47 PM] Nessim Barsallo: What's happening at the Comptroller [General's Office]?
[3/3/16, 7:43:54 PM] Nessim Barsallo: Is it a conspiracy?
[3/3/16, 7:58:16 PM] Frankie J. Lopez®: It looks like it
[3/3/16, 7:58:35 PM] Nessim Barsallo: I conclude they have orders

C-0681: WhatsApp message between Frankie Lopez and Nessim Barsallo dated 3 Mar. 2016

Cls' Rejoinder ¶ 269

[Page 21]

PRESIDENT VARELA DIRECTED ASSAULT: "THAT COMES FROM THE PRESIDENCY"

Frankie J. Lopez: Lo se [...] pero xndo pienso q todo esta resolviendose de repente se complica
["I know [...] but when I think everything is getting resolved suddenly it gets complicated"]
Nessim Barsallo: Q pasa en contraloria
["What's happening at the Comptroller [General's Office]"]
Nessim Barsallo: Es un complot?
["Is it a conspiracy?"]
Frankie J. Lopez: Pareciera
["It looks like it"]
Nessim Barsallo: Yo concluyo que tienen ordines
["I conclude they have orders"]
Frankie Lopez: Disq tan verificando en legal bla bla bla por el caso
["The say they're verifying in legal blah blah blah because of the case"]
...
Frankie J. Lopez: Tu cabes algo?
["Do you [know] anything"]
Frankie J. Lopez: Sabes*
["Know*"]
Nessim Barsallo: Eso es de presidencoa
["That comes from the Presidency"]325

C-0681: WhatsApp message between Frankie Lopez and Nessim Barsallo dated 3 Mar. 2016

See Cls' Reply ¶ 103

[Page 22]

CONTAINS PROTECTED INFORMATION

MR. VARELA PURSUED MR. RIVERA TO TEST LOYALTY

[Redacted]

C-0518: WhatsApp messages from Ana Graciela Medina to Oscar Rivera dated 17 Sept. 2012

46 Inbox From [Redacted]
Juan Carlos Varela*
9/17/2012
11:49:27
PM (UTC + 0)
Read Hey, check WhatsApp Messenger for BlackBerry, Iphone, Android and Nokia. Download it from http://whatsapp.com/dl/ and say good bye to the SMS (Juan Carlos Varela)
Source file: Oscar Rivera's iPhone/Library/SMS/sms.db: 0x1559C3
(Table: message, handle, Size; 2166784 bytes)
47 Inbox From [Redacted]
Juan Carlos Varela*
9/17/2012
11:43:58
PM (UTC + 0)
Read Hey, check WhatsApp Messenger for BlackBerry, Iphone, Android and Nokia. Download it from http://whatsapp.com/dl/ and say good bye to the SMS (Juan Carlos Varela)
Source file: Oscar Rivera's iPhone/Library/SMS/sms.db: 0x155C67
(Table: message, handle, Size; 2166784 bytes)

C-0519: Invitations from Mr. Varela to join WhatsApp chat dated 17 Sept. 2012

[Page 23]

RESPONDENT FALSELY DENIES LA TRONA MEETING OCCURRED

8. Second, the evidence does not support the Claimants' allegations that they were targeted or harassed in any way. According to the Claimants, they were targeted because Mr. Rivera refused to make a campaign contribution to then-candidate (now President) Juan Carlos Varela in 2012. There is no credible evidence that this request ever happened. Although Mr. Rivera references this request in his witness statement, there is not a single contemporaneous email, letter, or document in evidence confirming his account. In addition, Panama's witnesses confirm that their respective ministries were never directed or asked to take any adverse actions against the Claimants.

Resp.'s Counter-Mem. ¶ 8

[Page 24]

VARELALEAKS PROVE THE LA TRONA MEETING OCCURRED

[10/05/18 7:20:57 p.m.] Jj: But I never asked
[10/05/18 7:21:09 p.m.] Jj: Yes an attorney partner at igra
[10/05/18 7:21:14 p.m.] Jj: Invited me to dinner
[10/05/18 7:21:19 p.m.] Jj: I did not like the guy
[10/05/18 7:21:25 p.m.] Jj: But I never asked him again

C-0821: Chat with Kenia Porcell, then-Attorney General dated 16 Nov. 2017 to 5 Oct. 2018

[10/05/18 7:23:34 p.m.] Raul Sandoval: I don't even remember well who was there
[10/05/18 7:23:44 p.m.] Jj: Ana you I c
[10/05/18 7:30:08 p.m.] Raul Sandoval: I think Jordi, Cholito

C-0822: Chat with Raul Sandoval, President Varela's Private Secretary dated 5 Oct. 2018 to 6 Oct. 2018

[Page 25]

PRESIDENT VARELA ADMITS REQUESTING A CAMPAIGN CONTRIBUTION

[10/05/18 7:21:25 p.m.] Jj: But I never asked him again

C-0821: Chat with Kenia Porcell, then-Attorney General dated 16 Nov. 2017 to 5 Oct. 2018

[Page 26]

CONTAINS PROTECTED INFORMATION

VARELA TARGETS “THE CHILDREN OF R[ICARDO] M[ARTINELLI].”

[C-0555]

ANA GRACIELA MEDINA

[Redacted]

May 20, 2015

[Redacted]

May 20, 2015

[Redacted]

May 20, 2015

C-0555: WhatsApp messages between Ana Graciela Medina and Frankie Lopez dated 20 May 2015

[Page 27]

VARELA TARGETS “THE CHILDREN OF R[ICARDO] M[ARTINELLI].”

[04/30/18 8:45:40 a.m.] Jj: Good morning attorney general
[04/30/18 8:46:04 a.m.] Kenia Porcell Privado: Hello Sir
[04/30/18 8:46:14 a.m.] Jj: I call you
[04/30/18 8:50:49 a.m.] Jj: About RM kids for you to know, farah will call the prosecutor so that she may send to her the notification that the criminal jurisdiction was lifted. She needs that before notifying the lawyers.
The thing is that once she notifies the lawyers it will be difficult to refuse to deliver any copies
They will be part of a report with a folio and the law would force us do it. I could inform the pgn [Attorney General] but I don't know maybe you want to handle it?
[04/30/18 8:51:26 a.m.] Jj: She says the law obliges her
[04/30/18 8:53:59 a.m.] Kenia Porcell Privado: 2 points:
- the notification of extradition
- the delivery of the copies
Meaning she should notify the extradition today and take her time for the copies request
[04/30/18 8:54:16 a.m.] Kenia Porcell Privado: That's what Tania was talking about
[04/30/18 8:55:09 a.m.] Kenia Porcell Privado: Do not deliver the copies today. Make RE take the legal time to deliver them.
[04/30/18 8:55:39 a.m.] Kenia Porcell Privado: And this would allow delivering the extradition and avoiding they file an appeal to the vice
[04/30/18 8:55:47 a.m.] Kenia Porcell Privado: That's my opinion

C-0821: Chat with Kenia Porcell, then-Attorney General dated 16 Nov. 2017 to 5 Oct. 2018

[Page 28]

RESPONDENT'S WRONGDOING DESTROYED CLAIMANTS' INVESTMENT

Claimants' Investment

Mr.
Rivera's

Experience
Expertise
Reputation

Claimants'
Goodwill

The Omega
Consortium
Contracts

[Page 29]

RESPONDENT CAUSED OMEGA TO LOSE SURETY

From: Cruz, Nancy [mailto:[email protected]]
Sent: Monday, February 09, 2015 5:28 PM
To: Eduardo Marti-Martinez
Cc: Freitas-Pacciulli, Fatima; Delgado, Cesar D; Menendez, Eddie; Fulmer, Jacob
Subject: RE: OMEGA ENGIN RESTAURACION Y REHABILI

Eduardo,

At this point, due to the current declaration of default and the response time (30 days) required in Panama, we would not be in position to support bids for PR with the Panama outcome still unclear. The default on the largest job in Panama has the potential to put at risk both the Panama and PR operations if a resolution is not reached. Both companies could be at risk with this particular situation in Panama if the options to resolve do not involve a full release of Omega's obligations to the surety and the surety's obligations to the government. Until further notice, we will not be able support additional work in PR. We will keep you posted on our discussions with ASSA.

Regards,
Nancy Cruz | Managing Director/Construction Services | Bond & Specialty Insurance
Travelers
3230 W. Commercial Blvd. | Suite 390
Fort Lauderdale, FL 33309
W: 954.677.3374 F: 866.829.0379 C: 954.309.1064

C-0098: Email from Travelers Casualty & Surety Company to Omega-U.S. dated 9 Feb. 2015

[Page 30]

RESPONDENT CAUSED OMEGA TO LOSE SURETY

"Dear Mr. Rivera,
As per Article 1534 of the Civil Code and the Indemnity Documents which Omega Engineering, LLC and Omega Engineering, Inc. as members of the OMEGA CONSORTIUM, granted in favor of ASSA Compañía de Seguros, S.A. (hereinafter ASSA) as a condition precedent for ASSA to issue Performance Bond No. 85B64510 and Advance Payment Bond No. 87B50808 pertaining to Contract No. 93-12 for the purpose of carrying out the Studies, Design, Provision of Materials, Labor, Equipment, administration and Construction of the City of the Arts Project, hereby we request that OMEGA CONSORTIUM and/or any or all of its members provide a cash collateral in the sum of thirty-eight million dollars ($38,000,000.00) legal currency of the United States, corresponding to the amount of the bonded sums."

C-0382: Letter No. VPET-007-2015 from ASSA to the Omega Consortium dated 3 Mar. 2015

[Page 31]

RESPONDENT'S WRONGDOING DESTROYED CLAIMANTS' INVESTMENT

Claimants' Investment

Mr.
Rivera's

Experience
Expertise
Reputation

Claimants'
Goodwill

The Omega
Consortium
Contracts

[Page 32]

RESPONDENT DESTROYED MR. RIVERA'S REPUTATION

[C-0193]
NEWSROOM -PANAMA-
More seized bank accounts linked to suspended judge

[C-0194]
La Prensa In English
Prosecutor seizes accounts linked to Alejandro Moncada Luna

tvn Noticias Judicial
Fiscalía pide a Interpol que emita 'alerta roja' para ubicar a 4 empresarios por caso Moncada Luna

[C-0213]
La Prensa
MONCADA LUNA CASE
Accounts related to money laundering are seized

La Prensa / Locales
Cautelan cuentas ligadas a blanqueo

C-0193; C-0094; C-0194; C-0213; C-0732

[Page 33]

RESPONDENT DESTROYED MR. RIVERA'S REPUTATION

"OTHER PARTICIPANTS

...
In addition, the list of the Office of the Prosecutor Specialized in counteracting Organized Crime includes the entrepreneurs Jorge Espino Méndez, Julián Paris Rodríguez, and Óscar Iván Rivera Rivera; all who conduct business with various state entities, among them the controversial National Aid Program (Spanish initials: PAN). . . .

'Each of these individuals is directly related to the accounts, or to companies who were involved in the mobilization of the funds, which ultimately were used for the acquisition of the apartments of Mr. Alejandro Moncada Luna and the personal accounts of Mr. Luna and his wife,' said the press release from the Prosecutor General's office."

C-0213: Accounts related to money laundering are seized, LA PRENSA dated 21 Jun. 2015

[Page 34]

RESPONDENT DESTROYED MR. RIVERA'S REPUTATION

Detention Order Issued
(Aug. 25, 2015)
[C-0093: Resolution of Detention No. 052-15 dated 25 Aug. 2015]

Red Notice Issued
(Aug. 28, 2015)
[C-0747: INTERPOL Red Notice Request from the Organized Crime Attorney's Office to Panamanian National Police dated 28 Aug. 2015]

Extradition Sought from the U.S.
(Dec. 21, 2015)
[C-0900: Letter from Panama's Foreign Affairs Ministry to Panama's Office of the Attorney General attaching the U.S. State Department's Denial of Panama's Request of a Provisional Arrest for the Purpose of Extraditing Mr. Rivera dated 29 Feb. 2016]

Extradition Denied by U.S.
(Feb. 29, 2016)
[C-0900: U.S. State Department's Denial of Panama's Request of a Provisional Arrest dated 29 Feb. 2016]

Money Laundering Case Nullified
(Sept. 23, 2016)
[C-0008: Judgment of Panama's Second Superior Tribunal for the First Judicial District dated 23 Sept. 2016]

Red Notice Cancelled after Being Contested
(Dec. 13, 2016)
[C-0220: Letter from the Commission for the Control of Interpol's Files dated 13 Dec. 2016]

Provisional Dismissal of Bribery Investigation Confirmed by the First Court of the Criminal Circuit of the First Judicial Circuit of Panama
(Nov. 26, 2018)
[C-0908: Provisional Dismissal No. 143 dated 26 Nov. 2018]

[Page 35]

RESPONDENT'S WRONGDOING DESTROYED CLAIMANTS' INVESTMENT

Claimants' Investment

Mr. Rivera's
Experience
Expertise
Reputation

Claimants'
Goodwill

The Omega
Consortium
Contracts

[Page 36]

RESPONDENT BEARS THE BURDEN OF PROVING ITS CORRUPTION ALLEGATIONS

[Page 37]

RESPONDENT BEARS THE BURDEN OF PROVING ITS CORRUPTION ALLEGATIONS

[Page 38]

RESPONDENT AGREES ON KEY POINTS OF FACTS AND LAW

[Page 39]

RESPONDENT AGREES ON KEY POINTS OF FACTS AND LAW

[Page 40]

RESPONDENT GROSSLY DISTORTS THE FACTUAL RECORD

The Claimants paid bribes to Justice Moncada Luna in exchange for an award of the La Chorrera Contract. This conduct taints all of the Claimants’ investments in Panama and deprives the Tribunal of jurisdiction over their claims.
Reply in Support of Respondent's Preliminary Objections ¶ 6
61. In tandem with the overwhelming proof of the bank transfers that moved money from Omega to Justice Moncada Luna, and the fatal imperfections in the fake real estate documentation relied upon by the Claimants, the opinion of Mr. Pollitt further confirms the Claimants’ misconduct in connection with the La Chorrera Project.
Reply in Support of Respondent's Preliminary Objections ¶ 61

[Page 41]

RESPONDENT GROSSLY DISTORTS THE FACTUAL RECORD

61. In tandem with the overwhelming proof of the bank transfers that moved money from Omega to Justice Moncada Luna, and the fatal imperfections in the fake real estate documentation relied upon by the Claimants, the opinion of Mr. Pollitt further confirms the Claimants’ misconduct in connection with the La Chorrera Project.

Reply in Support of Respondent’s Preliminary Objections ¶ 61

Omega

PR
Solutions

Ms.
Gabriela
Reyna
Lopez

R-0062: Jorge Enrique Villalba, Preliminary Financial Analysis Report in Case No. 049-15 dated 05 June 2015 at p. 22

[Page 42]

CONTAINS PROTECTED INFORMATION

CLAIMANTS’ PAYMENTS TO REYNA WERE LEGITIMATE

Ms. Maria Gabriela Reyna Lopez

[C-0078 resubmitted]

PURCHASE AND SALE PROMISE AGREEMENT

The undersigned, namely, JR BOCAS INVESTMENTS, INC., an existing corporation organized under the laws of the Republic of Panama, duly registered under the Merchant's Section of the Public Registry, on File 481908, Document 758532, represented herein by MARIA GABRIELA REYNA LOPEZ, female, from Panama, of legal age, neighbour of this city, holder of personal identification document No. [Redacted], duly authorized for this act, who shall hereinafter be referred to as THE SELLER OFFEROR, on the one hand and on the other, PUNELA DEVELOPMENT CORP., an existing corporation organized under the laws of the Republic of Panama, duly registered under the Merchant's Section of the Public Registry, under [Redacted], represented herein by LUIS E. MONTANO G., male, from Panama, of legal age, neighbour of this city, holder of personal identification document No. [Redacted], duly authorized in this act, who shall be hereinafter referred to as the BUYER OFFEROR, have agreed to enter into, as in fact they do, This Purchase and Sale Promise Agreement, which is comprised of the following clauses:

ONE: The SELLER OFFEROR, proprietor of the Ranch No. 35050, registered under Document 1162972, Unification Code 7603, under the Real Property Section, Province of Los Santos, District of Tonosi, Corregimiento Canas from the Public Registry, which is made up of a plot of land with a surface of seven hectares, nine thousand and seventeen square meters, which measurements, borders and other data are registered with the Public Registry, which hereinafter is referred to as the RANCH.

TWO: The SELLER OFFEROR declares to commit to sell the BUYER OFFEROR and the latter commits to buy from the first one THE RANCH, in accordance with the price convened and adjusted of ONE MILLION AMERICAN DOLLARS WITH 00/100 ($1,000,000.00), legal tender of the United States of America, which The BUYER OFFEROR must pay to the SELLER OFFEROR in the following way:

  1. One initial payment of the twenty-five percent (25%) of the total price of the RANCH, that is to say, the amount of TWO HUNDRED AND FIFTY THOUSAND AMERICAN DOLLARS WITH 00/100 ($250,000.00), legal tender of the United States of America, which shall be payable within ten (10) days following the execution of this agreement. The payment above-described shall be paid through certified check or cashier's check in favour of the law firm Reyna & Asociados, which shall act as the Depository Agent custodian of the funds.
  2. A second payment for the amount of TWO HUNDRED AND FIFTY THOUSAND AMERICAN DOLLARS WITH 00/100, payable within sixty (60) business days from the first payment date.
  3. The amount of FIVE HUNDRED THOUSAND AMERICAN DOLLARS WITH 00/100 ($[illegible]0,000.00) legal tender of the United States of America, payable once it is duly registered with the Public Registry of Notarial Deeds, part of the final purchase and sale agreement, through which the SELLER OFFEROR transfers the RANCH to the BUYER OFFEROR. In order to guarantee the payment of the remaining balance covered under "c" above, the BUYER OFFEROR shall make the payment of said balance through an Irrevocable Promise of Payment Letter, issued by a General Faculties local Bank, acceptable by the SELLER OFFEROR, which shall be delivered to the SELLER OFFEROR by the BUYER OFFEROR, within sixty (60) days following the execution of this contract.

THREE: The parties agree that both the BUYER OFFEROR and the SELLER OFFEROR commit to sign the pertaining Notarial Deed part of the purchase and sale agreement of the RANCH in favour of the BUYER OFFEROR within one hundred and eighty (180) days following the execution of this contract. This term may be extended by mutual agreement of the parties.

TWO: The SELLER OFFEROR declares to commit to sell the BUYER OFFEROR and the latter commits to buy from the first one THE RANCH, in accordance with the price convened and adjusted of ONE MILLION AMERICAN DOLLARS WITH 00/100 ($1,000,000.00), legal tender of the United States of America, which The BUYER OFFEROR must pay to the SELLER OFFEROR in the following way:

  1. One initial payment of the twenty-five percent (25%) of the total price of the RANCH, that is to say, the amount of TWO HUNDRED AND FIFTY THOUSAND AMERICAN DOLLARS WITH 00/100 ($250,000.00), legal tender of the United States of America, which shall be payable within ten (10) days following the execution of this agreement. The payment above-described shall be paid through certified check or cashier’s check in favour of the law firm Reyna & Asociados, which shall act as the Depository Agent custodian of the funds.

C-0078: Promise of Purchase and Sale Agreement dated April 2013

[Page 43]

CLAIMANTS’ PAYMENTS TO REYNA WERE LEGITIMATE

Ms. Maria Gabriela Reyna Lopez

“I just want to clarify that the real estate operations carried out with PUNELA INVESTMENT (OMEGA) and with ALPHA BUSINESS CORP are perfectly legal and legitimate acquisitions. I don’t believe that there are any links of any other kind of relationship between OMEGA and the people related to Mr. Ricardo Calvo and other people . . . .”

“He suggested including the Concepto y Espacios payment within the legitimate operations of my client JR BOCAS INVESTMENT.”

Supplemental Declaration of Maria Gabriela Reyna Lopez dated 14 July 2015 (C-0089 resubmitted), at 5, 8.

- See also Jimenez 2 at 38

[Page 44]

THE LAND TRANSACTION WAS LEGITIMATE

Mr. Troyano’s Expert Report

- Troyano ¶ 14

[Page 45]

THE LAND TRANSACTION WAS LEGITIMATE

ARC’s Expert Report

Mr. Rivera’s testimony

[Page 46]

NATIONAL ASSEMBLY DID NOT PROVE ALLEGATIONS AGAINST CLAIMANTS

Panama’s Designated Prosecutor:

Omega Panama and PR Solutions were “in the range of companies not linked to the unjustified assets of [Moncada Luna] according to the theory of the case of the prosecution.”

Transcript of Moncada Luna’s Sentencing Hearing dated 5 Mar. 2015 (C-0930) at 26:36

[Page 47]

NO EVIDENCE OF CORRUPTION IN LA CHORRERA CONTRACT

[C-0083 resubmitted]

Coat of Arms: Republic of Panama]
REPUBLIC OF PANAMA
JUDICIARY BODY
DIRECTORATE OF GENERAL SERVICES

REPORT OF THE EVALUATING COMMISSION

Your Excellence
Alejandro Moncada Luna
Magistrate President
Supreme Court of Justice

Business Amount (Dollars)
1 Omega Engineering Consortium B/. 16,495,000.00
2 Constructora Nova, S.A. B/. 17,387,668.93
3 Constructora Corcione & Asociados, S.A. B/. 17,984,546.81
4 Consortium Construcciones La Chorrera B/. 18,150,000.00
BUSINESS AMOUNT (DOLLARS)
1 Omega Engineering Consortium B/. 16,495,000.00
2 Constructora Nova, S.A. B/. 17,387,668.93
3 Constructora Corcione & Asociados, S.A. B/. 17,984,546.81
4 Consortium Construcciones La Chorrera B/. 18,150,000.00

8. Verifying Commission

To evaluate the technical and financial proposals of the proposing companies, a Verifying Commission was appointed, which was made of the following clerks of the Judiciary Body:

  • Arelys de Caballini, B.Arch. Competence N° 91-001-046
  • Farah Urella Ducasa, B.Arch. Competence N° 92-001-053
  • Raul de Obaldia, B.Arch. Competence N° 2002-001-049

C-0083: Report from the Vetting Commission dated 9 Oct. 2012 at 1

E. RESULTADOS DE EVALUACION/CUADRO No.2
LICITACIÓN ABREVIADA POR MEJOR VALOR Nº2012-0-30-0-08-AV-004833

CONSTRUCCIÓN DE UN EDIFICIO PARA LA UNIDAD JUDICIAL REGIONAL DEL DISTRITO DE LA CHORRERA

No. EMPRESAS CAPACIDAD FINANCIERA HISTORIAL DE RECLAMOS PRECIO DE PROPUESTA EXPERIENCIA DE LA EMPRESA PERSONAL DE LA EMPRESA METODOLOGÍA DE EJECUCIÓN TOTAL
PLIEGO DE CARGOS 25 5 30.00 25 10 5 100.00
1 CONSORCIO OMEGA ENGINEERING 25 5 30 25 10 5 100
2 CONSTRUCTORA NOVA S.A. 20 5 28.14 13.66 10 2 78.8
3 CONSTRUCTORA CORCIONE Y ASOC. S.A. 20 5 27.52 25 10 2 89.52
4 CONSORCIO CONSTRUCCIONES LA CHORRERA 25 5 27.26 25 10 5 97.26

C-0083 at 7

[Page 48]

NO EVIDENCE OF CORRUPTION IN LA CHORRERA CONTRACT

“The methodology used to prepare this Report has been that of a ‘blind’ analysis by each of the experts, which entails individually assessing the contractual documentation (Annex 2 of the Report identifies the documents of the bid file analyzed in the Expert Report) without any knowledge of the scores awarded by the Evaluation Committee. . . .

The two evaluations agree on the winning company of the Bid: CONSORCIO OMEGA ENGINEERING, as well as in its score, which is 100 POINTS.”

Public Contracts Experts at 3, 6

“On October 17, 2012, Justice Moncada Luna, taking into consideration the report from the evaluation commission designated to evaluate the companies that participated in the Public Act, selected Omega as the Contractor for the La Chorrera Project and, at Justice Moncada Luna’s direction, and in accordance with the Law of Public Contracts, the Judicial Authority executed the La Chorrera Contract with Omega on November 22, 2012.”

Vielsa Rios 1 ¶ 12
See also Vielsa Rios 2 ¶¶ 5-6

[Page 49]

RESPONDENT HAS SHOWN NO WRONGDOING BY CLAIMANTS

I conclude that Panama failed to prove that Omega and/or Mr. Rivera engaged in corrupt acts for the following reasons:

- Jimenez 2 at pp. 5-6

[Page 50]

RESPONDENT HAS SHOWN NO WRONGDOING BY CLAIMANTS

2015

2016

2017

2018

2019

“Based on the above considerations, we respectfully recommend to the Honorable Court that a ruling be issued ordering OBJECTIVE AND IMPERSONAL PROVISIONAL DISMISSAL, pursuant to the provisions of Article 2208, number 1 of the Judicial Code, which will not result in res judicata and with the understanding that a request may be submitted to reopen the case if new evidence comes to light.

C-0942 at p. 9

[Page 51]

RESPONDENT HAS SHOWN NO WRONGDOING BY CLAIMANTS

2015

2016

2017

2018

2019

RULING

Based on the merits of the foregoing, the SECOND SUPERIOR COURT OF THE FIRST JUDICIAL DISTRICT, administering justice on behalf of the Republic and as authorized by law . . . DETERMINES: DECLARE the nullity of every act in the criminal proceedings officially initiated and based on accusations from members from the community, for the allegations of money laundering, against .... OSCAR IVÁN RIVERA, ID No. 421723037; as a result of violation of due process and errors related to general denomination of the crime.

C-0008 resubmitted 2 at p. 2

[Page 52]

RESPONDENT CONCEALED ITS CRIMINAL FILES

[illegible]

“Under Panamanian law, access to documents related to criminal and public investigations is restricted. Panamanian law specifies who may access government files involving such investigations. Specifically, the law precludes the production of such documents to parties who did not directly participate in the investigation or the judicial proceedings.”

The Republic of Panama’s Memorandum in Support of Its Objections to Claimants’ Document Requests ¶ 44

[Page 53]

RESPONDENT CONCEALED ITS CRIMINAL FILES

[illegible]

Pollitt states he reviewed materials collected by “both Panama’s National Assembly and Prosecutor’s Office as they relate to the unjust enrichment and corruption scheme, with a particular focus on Oscar Rivera, Omega US and Omega Panama, in order to assess whether those materials support a conclusion of illicit activity by Mr. Rivera and any of the Omega companies.”

Expert Report of Mr. Roy Pollitt dated 15 Nov. 2019 at 1

[Page 54]

U.S. GOVERNMENT DENIED EXTRADITION DUE TO LACK OF EVIDENCE

The Department of State refers to Diplomatic Note No. NV-15-079, dated December 21, 2015, from the Embassy of Panama, which requested the provisional arrest for the purpose of extradition of Oscar Ivan Rivera Rivera to stand trial in Panama for the crime of money laundering, in violation of Chapter IV, Title VII, of the Crimes against the Economic Order, Book Two of the Penal Code of Panama.

The United States cannot proceed with the provisional arrest request at this time, as it does not contain sufficient factual support linking Rivera Rivera to the money laundering charge. In order to proceed with the request, the United States would need to know the evidence on which the Government of Panama relied to conclude that Rivera Rivera was engaged in a money laundering operation related to the unlawful enrichment conviction against Alejandro Moncada Luna Carvajal. Such evidence could include, for example, an explanation of bank records which show the movement of money by Rivera Rivera and reflect that he knew the money was obtained through illegal means, a summary of testimony given by a co-conspirator, or any other evidence which clearly indicates that Rivera Rivera knowingly participated in the money laundering operation described in the provisional arrest request. Such evidence could include, for example, an

DIPLOMATIC NOTE

C-0900: Letter from Panama’s Foreign Affairs Ministry to Panama’s Office of the Attorney General attaching the U.S. State Department’s Denial of Panama’s Request of a Provisional Arrest for the Purpose of Extraditing Mr. Rivera dated 29 Feb. 2016

[Page 55]

U.S. GOVERNMENT DENIED EXTRADITION DUE TO LACK OF EVIDENCE

[C-0900]
Produced Pursuant to Procedural Order No. 2
[illegible]

29 February 2016
A.J.-MRE-2016-18374

REPUBLIC OF PANAMA
Ministry of Foreign Relations

PANAMA 4, PANAMA

Dear Prosecutor:

I am pleased to contact you with reference to note PGN-FSA-3407-15 dated 17 December 2015 by means of which you sent Official Notice No. 11414-15 dated 10 December 2015 by the Special Prosecutor against Organized Crime, requesting the Judicial Authorities of the United States of America to proceed with the Provisional arrest for the Purpose of Extradition of the [Redacted] Puerto Rican citizen OSCAR IVAN RIVERA RIVERA, passport no. [Redacted], born on [Redacted], by virtue of a precautionary measure of arrest issued by such investigative authority based on Resolution No. 15 dated 25 August 2015.

Regarding this matter, by way of note NG-16-031 dated 12 February 2016, the Embassy of Panama in Washington sent a Diplomatic Note dated 10 February 2016, based on which the State Department advised that, as of this date, the provisional arrest of Mr. OSCAR IVAN RIVERA RIVERA can not proceed considering that the documentation which was provided lacks sufficient facts connecting the aforementioned person with the charges of money laundering and which provided some suggestions to once again reiterate such request, which we are sending to you in the attached note.

While sending you the referenced note, I would like to take this opportunity to reiterate my consideration.

Yours sincerely,

Signature
NADIA MONTENEGRO DE DETRESNO
Deputy General Director of
Legal Affairs and Treaties

To the Honorable Msc.
DIGNA M. ATENCIO BONILLA
Senior Prosecutor for International Affairs at
the Office of the Attorney General of the Nation

Attachment: as specified

NM/Diov

PUBLIC MINISTRY
OFFICE OF THE ATTORNEY GENERAL OF THE NATION
Archive and Correspondence

Control No.: 1216
Received on this present day of 01 March 2016
Time: 11:04 AM Via messenger
Signature
Received

C-0900: Letter from Panama’s Foreign Affairs Ministry to Panama’s Office of the Attorney General attaching the U.S. State Department’s Denial of Panama’s Request of a Provisional Arrest for the Purpose of Extraditing Mr. Rivera dated 29 Feb. 2016

[Page 56]

RESPONDENT HAS SHOWN NO WRONGDOING BY CLAIMANTS

“It is also my opinion that Panama failed to show—and certainly could not have proved—that Omega and/or Mr. Rivera engaged in money laundering with respect to corruption allegations involving Moncada Luna. Panama relied exclusively on bank transaction analysis to link Mr. Rivera and Omega to Mr. Moncada Luna. However, Panama’s bank transaction analyses included mathematical errors, illogical assumptions, contradictory interpretations of the same set of transactions and missing days/weeks/months of transactions during which Panama has no idea what happened and cannot ascribe the transactions to anyone, let alone Omega or Mr. Rivera.

The flawed transaction analyses invalidates Panama’s corruption and money laundering allegations against Omega and Mr. Rivera and severs any claimed “link” between Omega and/or Mr. Rivera and Mr. Moncada Luna. Moreover, Panama was unable to produce any other evidence of supposed corruption or money laundering such as communications, witness testimony or computer records to support their conclusion. Finally, Panama failed to either investigate or failed to produce evidence of investigations into certain other individuals who may have been linked to the unjust enrichment of Mr. Moncada Luna.”

Jimenez 2 at p. 3

[Page 57]

Charles T. Kotuby Jr.

Other Jurisdictional Objections and Treaty Standards

Restitution and Quantum

[Page 58]

THE BIT AND THE TPA: A CHRONOLOGY

[Page 59]

THE TPA COVERS THE ENTIRETY OF CLAIMANTS’ INVESTMENT

Article 1.3: Relation to Other Agreements

  1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party.
  2. Articles VII and VIII of the Treaty Between the United States of America and the Republic of Panama Concerning the Treatment and Protection of Investments, with Annex and Agreed Minutes, signed at Washington on October 27, 1982 (the “Treaty”) shall be suspended on the date of entry into force of this Agreement.
  3. Notwithstanding paragraph 2,
    1. for a period of ten years beginning on the date of entry into force of this Agreement, Articles VII and VIII of the Treaty shall not be suspended:
      1. in the case of investments covered by the Treaty as of the date of entry into force of this Agreement; or
      2. in the case of a dispute that arose prior to the date of entry into force of this Agreement and that is otherwise eligible to be submitted for settlement under Article VII or VIII of the Treaty; and

The BIT Remains in Force

Article 2.1: Definitions of General Application

covered investment means, with respect to a Party, an investment, as defined in Article 10.29 (Definitions), in its territory of an investor of the other Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;

The TPA Covers This Entire Investment

[Page 60]

RESPONDENT’S PRELIMINARY OBJECTIONS FAIL

Corruption Allegations

Criminal
Investigations
Off-Limits

Commercial Acts Only

Dispute Resolution Clauses

[Page 61]

RESPONDENT’S PRELIMINARY OBJECTIONS FAIL

Panama Bilateral Investment Treaty

1982: Entered into Force May 30, 1991

Chapter Ten

Investment

Section A: Investment

Article 10.1: Scope and Coverage

  1. This Chapter applies to measures adopted or [illegible]
    1. investors of the other Party;
    2. covered investments; and
    3. with respect [illegible] Party.
  2. A Party [illegible] when it exe[illegible] by that [illegible]

Criminal
Investigations
Off-Limits

Commercial Acts Only

Dispute Resolution Clauses

[Page 62]

RESPONDENT’S PRELIMINARY OBJECTIONS FAIL

Panama Bilateral Investment Treaty

1982: Entered into Force May 30, 1991

Chapter Ten

Investment

Section A: Investment

Article 10.1: Scope and Coverage

  1. This Chapter applies to measures adopted or maintained by a Party relating to:
    1. investors of the other Party;
    2. covered investments; and
    3. with respect to Articles 10.9 and 10.11, all investments in the territory of the Party.
  2. A Party’s obligations under this Section shall apply to a state enterprise or other person when it exercises any regulatory, administrative, or other governmental authority delegated to it by that Party.
  3. For greater certainty, this Chapter does not bind any Party in relation to any act or fact that took place or any situation that ceased to exist before the date of entry into force of this [illegible]eement.

[illegible] Relation to Other Chapters

[illegible] of any inconsistency between this Chapter and another Chapter, the other [illegible] the extent of the inconsistency.

[illegible] that a service supplier of the other Party post a bond or other [illegible] [illegible]ion of the cross-border supply of a service does not of itself [illegible] adopted or maintained by the Party relating to such [illegible]ter applies to measures adopted or maintained by [illegible] security, to the extent that such bond or [illegible] [illegible]intained by a Party to the extent [illegible] [illegible]orable than [illegible]ent.

Criminal
Investigations
Off-Limits

Dispute Resolution Clauses

[Page 63]

ARTICLE VII OF THE BIT

2. In the event of an investment dispute between a Party and a national or company of the other Party with respect to an investment of such national or company in the territory of the first Party, the parties to the dispute shall initially seek to resolve it by consultation and negotiation. The parties may, upon the initiative of either of them and as a part of their consultation and negotiation, agree to rely upon non-binding, third-party procedures, such as the fact-finding facility available under the Rules of the Additional Facility ("Additional Facility") of the International Centre for the Settlement of Investment Disputes ("Centre"). If the dispute cannot be resolved through consultation and negotiation, then the dispute shall be submitted for settlement in accordance with the applicable dispute- settlement procedures upon which they have previously agreed. Such procedures may provide for recourse to international arbitration using a forum such as the Inter-American Commercial Arbitration Commission. With respect to expropriation by either Party, any dispute-settlement procedures specified in an investment agreement between such Party and such national or company shall remain binding and shall be enforceable in accordance with, inter alia, the terms of the investment agreement, relevant provisions of the domestic laws of such Party and treaties and other international agreements regarding enforcement of arbitral awards to which such Party has adhered.

CL-0001: U.S.–Panama BIT

[Page 64]

ARTICLE VII OF THE BIT

ARTICLE VII

1. For purposes of this Article, an investment dispute is defined as a dispute involving: (a) the interpretation or application of an investment agreement between a Party and a national or company of the other Party; (b) the interpretation or application of any investment authorization granted by its foreign investment authority to such national or company; or (c) an alleged breach of any right conferred or created by this Treaty with respect to an investment.

CL-0001: U.S.–Panama BIT

[Page 65]

ARTICLE VII OF THE BIT

2. In the event of an investment dispute between a Party and a national or company of the other Party with respect to an investment of such national or company in the territory of the first Party, the parties to the dispute shall initially seek to resolve it by consultation and negotiation. The parties may, upon the initiative of either of them and as a part of their consultation and negotiation, agree to rely upon non-binding, third-party procedures, such as the fact-finding facility available under the Rules of the Additional Facility ("Additional Facility") of the International Centre for the Settlement of Investment Disputes ("Centre"). If the dispute cannot be resolved through consultation and negotiation, then the dispute shall be submitted for settlement in accordance with the applicable dispute- settlement procedures upon which they have previously agreed. Such procedures may provide for recourse to international arbitration using a forum such as the Inter-American Commercial Arbitration Commission. With respect to expropriation by either Party, any dispute-settlement procedures specified in an investment agreement between such Party and such national or company shall remain binding and shall be enforceable in accordance with, inter alia, the terms of the investment agreement, relevant provisions of the domestic laws of such Party and treaties and other international agreements regarding enforcement of arbitral awards to which such Party has adhered.

3. (a) The national or company concerned may choose to consent in writing to the submission of the dispute to the Additional Facility for settlement, either by conciliation or binding arbitration, at any time after six months from the date upon which the dispute arose. Once the national or company concerned has so consented, either party to the dispute may institute proceedings before the Additional Facility, provided the dispute has not, for any reason, been submitted for resolution in accordance with any applicable dispute settlement procedures previously agreed to by the parties to the dispute, and the national or company concerned has not brought the dispute before the courts of justice, administrative tribunals or agencies of competent jurisdiction of either Party.

(b) Each Party hereby consents to the submission of an investment dispute to the Additional Facility for settlement by conciliation or binding arbitration.

(c) Conciliation or binding arbitration of such dispute shall be done in accordance with the provisions of the Regulations and Rules of the Additional Facility.

(d) Each Party shall provide for the enforcement within its territory of Additional Facility arbitral awards.

Provision only applies where a “Party and a national” have “previously agreed” to a forum for “investment disputes”

...such as, in “investment agreement[s],” which is a separate category of investment disputes in Article VII(1)

CL-0001: U.S.–Panama BIT

[Page 66]

THE DISPUTE SETTLEMENT PROVISIONS ARE NOT “APPLICABLE”

[Page 67]

RESPONDENT’S PRELIMINARY OBJECTIONS FAIL

Panama Bilateral Investment Treaty

1982: Entered into Force May 30, 1991

[illegible]

Criminal Investigations Off-Limits

Chapter Ten

Investment

Section A: Investment

Article 10.1: Scope and Coverage

  1. This Chapter applies to measures adopted or maintained by a Party relating to:
    1. investors of the other Party;
    2. covered investments; and
    3. with respect to Articles 10.9 and 10.11, all investments in the territory of the Party.
  2. A Party’s obligations under this Section shall apply to a state enterprise or other person when it exercises any regulatory, administrative, or other governmental authority delegated to it by that Party.
  3. For greater certainty, this Chapter does not bind any Party in relation to any act or fact that took place or any situation that ceased to exist before the date of entry into force of this Agreement.

Article 10.2: Relation to Other Chapters

  1. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail to the extent of the inconsistency.
  2. A requirement by a Party that a service supplier of the other Party post a bond or other form of financial security as a condition of the cross-border supply of a service does not of itself make this Chapter applicable to measures adopted or maintained by the Party relating to such cross-border supply of the service. This Chapter applies to measures adopted or maintained by the Party relating to the posted bond or financial security, to the extent that such bond or financial security is a covered investment.
  3. This Chapter does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter Twelve (Financial Services).

Article 10.3: National Treatment

  1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment,

10-1

[Page 68]

RESPONDENT’S PRELIMINARY OBJECTIONS FAIL

Panama Bilateral Investment Treaty

Signed October 27, 1982; Entered into Force May 30, 1991

Investment Treaty with Panama

99th Congress 2nd Session

SENATE Treaty Doc. 99-14

MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
THE TREATY BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF PANAMA CONCERNING THE TREATMENT AND PROTECTION OF INVESTMENTS, WITH AGREED MINUTES. SIGNED AT WASHINGTON, OCTOBER 27, 1982

MARCH 25, 1986-Treaty was read the first time and, together with the accompanying papers, referred to the Committee on Foreign Affairs and ordered to be printed for the use of the Senate

U.S. GOVERNMENT PRINTING OFFICE
71-118 WASHINGTON: 1986

LETTER OF TRANSMITTAL

The White House, March 25,1986.

To the Senate of the United States:

With a view to receiving the advice and consent of the Senate ratification, I transmit herewith the Treaty between the United States of America and the Republic of Panama concerning the Treatment and Protection of Investments, with Agreed Minutes, signed October 27, 1982, at Washington. I transmit also, for the information of the Senate, the report of the Department of State with

CL-0001: U.S.–Panama BIT

Chapter Ten

Investment

Section A: Investment

Article 10.1: Scope and Coverage

  1. This Chapter applies to measures adopted or maintained by a Party relating to:
    1. investors of the other Party;
    2. covered investments; and
    3. with respect to Articles 10.9 and 10.11, all investments in the territory of the Party.
  2. A Party’s obligations under this Section shall apply to a state enterprise or other person when it exercises any regulatory, administrative, or other governmental authority delegated to it by that Party.
  3. For greater certainty, this Chapter does not bind any Party in relation to any act or fact that took place or any situation that ceased to exist before the date of entry into force of this Agreement.

Article 10.2: Relation to Other Chapters

  1. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail to the extent of the inconsistency.
  2. A requirement by a Party that a service supplier of the other Party post a bond or other form of financial security as a condition of the cross-border supply of a service does not of itself make this Chapter applicable to measures adopted or maintained by the Party relating to such cross-border supply of the service. This Chapter applies to measures adopted or maintained by the Party relating to the posted bond or financial security, to the extent that such bond or financial security is a covered investment.
  3. This Chapter does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter Twelve (Financial Services).

Article 10.3: National Treatment

  1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment,

10-1

CL-0003: U.S.–Panama TPA

[Page 69]

RESPONDENT’S KEY TREATY BREACHES

  1. Respondent’s Agencies Refused to Sign Virtually All Change Orders and Payment Applications to the Omega Consortium
  2. Comptroller General Refused to Endorse Virtually All Payments to the Omega Consortium, Cutting Off All Cash Flow
  3. Comptroller General Refused to Endorse Virtually All Change Orders for the Omega Consortium’s Projects, Causing Contracts to Lapse
  4. MEF Slashed the State Budget for the Omega Consortium’s Largest Project
  5. INAC Administratively Terminated the Omega Consortium’s Largest Contract, Imposing a Ban on Future Bidding (Without Notice)
  6. Municipality of Panama Administratively Terminated Contract, and Imposed a Further Three Year Ban on Bidding
  7. Respondent Initiated Bogus Criminal Investigations
  8. Criminal Authorities Froze Bank Accounts
  9. Criminal Authorities Issued Detention Orders
  10. Respondent Issued Extradition Request and Interpol Red Notice

Expropriation:

#1 through #8: The “substantial deprivation” of “virtually all” of an investment

Fair and Equitable Treatment:

#1 through #10: Arbitrariness, a willful neglect of duty and due process, and subjective bad faith

Full Protection & Security:

#8 through #10: Threats to physical security

Umbrella Clause:

#1 through #6: Sovereign failure to “observe obligations . . . with regard to investment”

[Page 70]

PARTIES AGREE DEC. 23, 2014 IS THE APPROPRIATE VALUATION DATE

VALUATION DATE: DEC. 23, 2014

[Page 71]

CLAIMANTS’ LOSSES

Claimants’
Moral
Damages

[Redacted]

Goodwill
and Value
of Future
Contracts

Value of
Existing
Contracts

[Page 72]

CLAIMANTS’ LOSSES

* Does not include interest

Claimants’
Moral
Damages

[Redacted]

Goodwill
and Value
of Future
Contracts

Value of
Existing
Contracts

US$ 8.69
Million*

[Page 73]

CLAIMANTS’ LOSSES

* Does not include interest

Claimants’
Moral
Damages

[Redacted]

Goodwill
and Value
of Future
Contracts

US$ 42.53
Million*

Value of
Existing
Contracts

US$ 8.69
Million*

[Page 74]

CONTAINS PROTECTED INFORMATION

CLAIMANTS’ LOSSES

* Does not include interest

Claimants’
Moral
Damages

[Redacted]

Goodwill
and Value
of Future
Contracts

US$ 42.53
Million*

Value of
Existing
Contracts

US$ 8.69
Million*

[Page 75]

CONTAINS PROTECTED INFORMATION

CLAIMANTS’ LOSSES

* Does not include interest

Claimants’
Moral
Damages

[Redacted]

Goodwill
and Value
of Future
Contracts

US$ 42.53
Million*

Value of
Existing
Contracts

US$ 8.69
Million*

[Redacted]

▲ Pre-award interest has not been applied to moral damages

[Page 76]

Carlos F. Concepción

Shook, Hardy & Bacon

Conclusion

[Page 77]

One Firm Worldwide®