INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

Mabco Constructions SA

v.

Republic of Kosovo

(ICSID Case No. ARB/17/25)

PROCEDURAL ORDER NO. 1

Members of the Tribunal
Professor George A. Bermann, President of the Tribunal
Mr. Gianrocco Ferraro, Arbitrator
Professor Dr. August Reinisch, Arbitrator

Secretary of the Tribunal
Mr. Francisco Abriani

October 5, 2018

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Introduction

The first session of the Arbitral Tribunal was held on February 8, 2018, at 9:18 am EST, by telephone conference. The session was adjourned at 10:09 am EST.

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

Participating in the conference were:

Members of the Tribunal
Professor George A. Bermann, President of the Tribunal
Mr. Gianrocco Ferraro, Arbitrator
Professor Dr. August Reinisch, Arbitrator

ICSID Secretariat:
Mr. Paul Jean Le Cannu, Senior Legal Counsel
Ms. Randi Ayman, Legal Counsel

Participating on behalf of the Claimant:
Mr. Christian Schmid, Bratschi Ltd.
Ms. Sandra De Vito Bieri, Bratschi Ltd.
Ms. Liv Bahner, Bratschi Ltd.

Participating on behalf of the Respondent:
Mr. Heset Mazrekaj, State Advocate General, Ministry of Justice
Ms. Fëllënza Limani, Ministry of Justice
Mr. Arsim Zuka, Ministry of Justice
Ms. Zana Prekazi, Ministry of Justice

The Tribunal and the parties considered the following:

• The Draft Agenda and the Draft Procedural Order circulated by the Tribunal Secretary on January 30, 2018 and December 6, 2017, respectively; and
• The proposed changes to the Draft Procedural Order received on February 1 and 2, 2018 from Claimant and Respondent, respectively, indicating the items on which they agreed and their respective positions regarding the items on which they did not agree.

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

Order

Pursuant to ICSID Arbitration Rules 19 and 20, this first Procedural Order sets out the Procedural Rules that govern this arbitration.

1. Applicable Arbitration Rules
Convention Article 44

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1.1. These proceedings are conducted in accordance with the ICSID Arbitration Rules in force as of April 10, 2006.

2. Constitution of the Tribunal and Tribunal Members’ Declarations
Arbitration Rule 6

2.1. The Tribunal was constituted on November 20, 2017 in accordance with the ICSID Convention and the ICSID Arbitration Rules. The parties confirmed that the Tribunal was properly constituted and that no party has any objection to the appointment of any Member of the Tribunal.

2.2. The Members of the Tribunal timely submitted their signed declarations in accordance with ICSID Arbitration Rule 6(2). Copies of these declarations were distributed to the parties by the ICSID Secretariat on November 20, 2017.

2.3. The Members of the Tribunal confirmed that they have sufficient availability during the next 24 months to dedicate to this case.

3. Fees and Expenses of Tribunal Members
Convention Article 60; Administrative and Financial Regulation 14; ICSID Schedule of Fees

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

3.2. Under the current Schedule of Fees, each Tribunal Member receives:

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

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

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

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

4. Presence and Quorum
Arbitration Rules 14(2) and 20(1)(a)

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

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5. Decisions and Procedural Rulings of the Tribunal
Convention Article 48(1); Arbitration Rules 16, 19 and 20

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

5.2. ICSID Arbitration Rule 16(2) applies to decisions taken by correspondence except that where the matter is urgent, the President may issue procedural decisions without consulting the other Members, subject to possible reconsideration of such decision by the full Tribunal.

5.3. The Tribunal will draft all rulings within a reasonable time period. If a ruling has not been issued within three months after the final submission on a particular matter, the Tribunal will provide the parties with a status update every month.

5.4. The President is authorized to issue Procedural Orders and Procedural Decisions – subject to what is decided in 5.2 for the avoidance of doubt – on behalf of the Tribunal.

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

6. Power to Fix Time Limits
Arbitration Rule 26(1)

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

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

7. Secretary of the Tribunal
Administrative and Financial Regulation 25

7.1. The Tribunal Secretary is Mr. Francisco Abriani, Legal Counsel, ICSID, or such other person as ICSID may notify to the Tribunal and the parties from time to time.

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

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]

[Redacted]

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

[Redacted]

[Redacted]

[Redacted]

[Redacted]

8. Representation of the Parties
Arbitration Rule 18

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

8.2. Any change or addition to a party’s representatives listed above shall be promptly notified in writing by that party to the other party and the Tribunal through the Tribunal Secretary.

9. Apportionment of Costs and Advance Payments to ICSID
Convention Article 61(2); Administrative and Financial Regulation 14; Arbitration Rule 28

9.1. The parties shall defray the direct costs of the proceeding in equal parts, without prejudice to the final decision of the Tribunal as to the allocation of costs.

9.2. By letter of November 29, 2017, ICSID requested that each party pay US$125,000 to cover the initial costs of the proceeding. By letter dated January 4, 2018, Respondent informed the Tribunal that “it cannot at present commit to any payment of advance costs [sic]”. ICSID confirmed receipt of Claimant’s payment on January 10, 2018. By letter of

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January 16, 2018, ICSID notified the parties of Respondent’s default, and invited either party to pay the outstanding share of the advance on costs by January 31, 2018. At the first session, Respondent confirmed that it could not commit to pay its share of the advance on costs. On March 12, 2018, the proceeding was stayed for non-payment of the required advances pursuant to ICSID Administrative and Financial Regulation 14(3)(d). On September 19, 2018, ICSID acknowledged receipt of payment of the outstanding amount of USD 125,000 from the Claimant, and informed the parties that the proceeding resumed on that date from the point it had reached at the time the suspension occurred.

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

10. Place of Proceeding
Convention Articles 62 and 63; Administrative and Financial Regulation 26; Arbitration Rule 13(3)

10.1. Paris, France shall be the place of the proceeding.

10.2. The Tribunal may hold hearings at any other place that it considers appropriate if the parties so agree.

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

11. Procedural Language(s), Translation and Interpretation
Administrative and Financial Regulation 30(3) and (4); Arbitration Rules 20(1)(b) and 22

11.1. English is the procedural language of the arbitration.

11.2. Documents filed in any other language must be accompanied by a translation into English.

11.3. If the document is lengthy and relevant only in part, it is sufficient to translate only relevant parts, provided that the Tribunal may require a fuller or a complete translation at the request of any party or on its own initiative.

11.4. Translations need not be certified unless there is a dispute as to the content of a translation provided and the party disputing the translation specifically requests a certified version.

11.5. Documents exchanged between the parties in a language other than English under §15 below (Production of Documents) need not be translated.

11.6. The testimony of a witness called for examination during the hearing who prefers to give evidence other than in the English language shall be interpreted simultaneously.

11.7. The parties will notify the Tribunal, as soon as possible, and no later than at the pre-hearing organizational meeting (see §19 below), which witnesses or experts require interpretation.

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

12. Routing of Communications
Administrative and Financial Regulation 24

12.1. The ICSID Secretariat shall be the channel of written communications between the parties and the Tribunal.

12.2. Each party’s written communications shall be transmitted by email or other electronic means to the opposing party and to the Tribunal Secretary, who shall send them to the Tribunal.

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

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

13. Number of Copies and Method of Filing of Parties’ Pleadings
Administrative and Financial Regulation 30; Arbitration Rules 20(1)(d) and 23

13.1. By the relevant filing date, the parties shall send by email to the Tribunal Secretary and the opposing party an electronic version of the pleading with witness statements, expert reports and a list of all documents,¹ and by the following business day, upload the pleading with the supporting documentation to the file sharing platform that will be created by ICSID for purposes of this case.

13.2. On the business day following the electronic filing, the parties shall courier to the Tribunal Secretary:

13.2.1. one unbound double-sided hard copy in A4/Letter format² of the entire submission,³ including signed originals of the pleading, witness statements, and expert reports, together with documents (but not including legal authorities); and

13.2.2. two USB drives PC compatible, with full copies of the entire submission, including the pleading, the witness statements, expert reports, documents, and legal authorities.

13.3. At the same time, courier to the opposing party at the address(es) indicated at §8.1 above and to each Member of the Tribunal at the address(es) indicated at §13.4 below:

13.3.1. one hard copy in A4 –format of the entire submission including the pleading, the

¹ Please note that the World Bank server does not accept emails larger than 25 MB. ↩
² The A4/Letter format is required for ICSID’s archiving. ↩
³ The Secretariat’s copy will be kept in the official repository of ICSID, and is not intended to be used at hearings. ↩

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witness statements, expert reports and factual exhibits (but not including legal authorities); and

13.3.2. one USB drive with a full copy of the entire submission, including the pleading, the witness statements, expert reports, documents and legal authorities. The parties shall ensure that the USB drive is compatible with PC or Mac according to the following preferences:

• Claimant: PC
• Republic of Kosovo: PC
• Prof. Bermann: PC
• Mr. Ferraro: PC
• Prof. Dr. Reinisch: PC

13.4. The addresses of the Tribunal Members, except as may be otherwise requested, are as follows:

[Redacted]

*****

13.5. Legal authorities shall be submitted in electronic format only, unless a hard copy is specifically requested by the Tribunal.

13.6. Electronic versions of a pleading and its supporting documentation shall be text searchable (i.e., OCR PDF or Word).

13.7. Each party shall supply an index hyperlinked to the supporting documentation within a reasonable time after the filing of the pleading.

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

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

14. Number and Sequence of Pleadings
Arbitration Rules 20(1)(c), 20(1)(e), 29 and 31

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14.1. Pursuant to the agreement of the parties at the first session, the proceedings shall be bifurcated and shall address in a first phase the Respondent’s Objections on Jurisdiction and Admissibility.

14.2. The parties shall confer and endeavour to agree within 10 days from issuance of this Procedural Order No. 1 on a procedural calendar that follows the sequence agreed upon at the first session. This sequence is as follows

14.2.1. Respondent shall first submit its Objections to Jurisdiction and Admissibility.

14.2.2. Claimant shall then submit its Counter-memorial on Jurisdiction and Admissibility.

14.2.3. Respondent shall submit its Reply on Jurisdiction and Admissibility.

14.2.4. Claimant shall submit its Rejoinder on Jurisdiction and Admissibility.

14.3. If the parties deem it necessary, the above sequence may include after the Counter-Memorial a document production phase limited to issues of Jurisdiction and Admissibility.

14.4. The parties shall also confer with a view to suggesting tentative dates to hold a hearing on Jurisdiction and Admissibility.

15. Production of Documents
Convention Article 43(a); Arbitration Rules 24 and 33 and 34

15.1. Articles 3 and 9 of the International Bar Association Rules on the Taking of Evidence in International Arbitration (2010) (“IBA Rules”) shall guide the Tribunal and the parties regarding document production in this proceeding.

15.2. The parties’ documents production requests, the responses or objections to the requests, the reply to the responses or objections to the requests, and the Tribunal’s decisions on the requests shall be recorded in a joint Redfern Schedule form as provided below:

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16. Submission of Documents
Convention Article 44; Administrative and Financial Regulation 30; Arbitration Rule 24

16.1. The Memorial and Counter-Memorial shall be accompanied by the evidence relied upon by the parties, including but not limited to documents, witness statements, expert reports and legal authorities. In their second written submissions, the parties shall include only additional written witness testimony, expert opinion testimony, documents or other evidence that responds to or rebuts matters raised by the opposing party’s prior written submissions. The Tribunal may relax this requirement upon an application following the procedure set out in § 16.3.

16.2. The documents shall be submitted in the manner and form set forth in §13 above.

16.3. Neither party shall be permitted to submit additional or responsive documents after the filing of its respective last written submission, save under exceptional circumstances at the discretion of the Tribunal upon a reasoned written request followed by observations from the other party.

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

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

16.4. The Tribunal may call upon the parties to produce documents or other evidence in accordance with ICSID Arbitration Rule 34(2).

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

16.5.1. Exhibits shall be numbered consecutively throughout these proceedings.

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

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

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

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16.5.5. Exhibits shall also be submitted in PDF format and start with the number “C-001” and “R-001,” respectively.

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

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

16.7. Demonstrative exhibits (such as Power Point slides, charts, tabulations, etc.) may be used at any hearing, provided they contain no new evidence or pleadings. Each party shall number its demonstrative exhibits consecutively, and indicate on each demonstrative exhibit the number of the document(s) from which it is derived. The party submitting such exhibits shall provide them in hard copy to the other party, the Tribunal Members, the Tribunal Secretary, the court reporter(s) and interpreter(s) at the hearing. Demonstrative exhibits shall be delivered to the Tribunal Members, the Tribunal Secretary, the court reporter(s) interpreter(s) and the other party at least 48 hours in advance of their use. at a time to be decided at the pre-hearing organizational meeting.

17. Witness Statements and Expert Reports
Convention Article 43(a); Arbitration Rule 24

17.1. Witness statements and expert reports shall be filed together with the parties’ pleadings. A photograph of each witness (fact or expert) shall be placed on the front page of the witness statement or expert report.

17.2. The Tribunal shall not admit any testimony that has not been filed with the written submissions, unless the Tribunal determines that exceptional circumstances exist.

17.3. All witness statements or expert reports shall include the information contemplated by Articles 4(5) and 5(2) of the IBA Rules and be signed (electronic signature sufficient) and dated by the submitting factual witness or expert witness.

18. Examination of Witnesses and Experts
Arbitration Rules 35 and 36

18.1. The Tribunal shall be guided by the IBA Rules in its decisions with regard to the examination of witnesses and experts.

18.2. Each party shall notify the other party and the Tribunal which witnesses and experts of the opposing party it intends to cross-examine at the hearing, doing so within 14 days following receipt of the last written submission.

18.3. Within 14 days following the parties’ submissions, the Tribunal will indicate the witnesses or experts not called by the parties whom it wishes to question, if any.

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18.4. Any witness or expert not called by the other party or by the Tribunal for cross-examination shall not give oral testimony, except under special circumstances at the discretion of the Tribunal upon a reasoned written request followed by observations from the other party.

18.5. The parties shall inform the witnesses and experts whose evidence they submit of the dates of the hearing.

18.6. Examination by video-conference may be permitted by the Tribunal for justified reasons.

18.7. Any witness or expert called shall be subject to cross-examination.

18.8. The direct examination is given in the form of witness statements and expert reports. However, the party presenting the witness may conduct a brief direct examination, to be limited as the Tribunal may hereafter order. Subject to the direction of the Tribunal, there shall be no limitation on the scope of the cross-examination to the contents of the witness statement or expert report. Re-direct examination shall be limited to the subject of cross-examination.

18.9. Before the hearing and on the applicable date set forth in §14 (if any), a party may be called upon by the Tribunal or the opposing party to produce at the hearing for examination and cross-examination any factual or expert witness whose written testimony has been advanced with the written submissions.

18.10. The Tribunal shall have the right to organize joint examinations.

18.11. Witnesses shall not be allowed in the hearing room before giving their testimony.

18.12. Unless the Tribunal otherwise orders upon request of a party, experts shall be allowed in the hearing room throughout the hearing.

18.13. Unless the Tribunal otherwise orders upon request of a party, party representatives shall be allowed in the hearing room throughout the hearing.

18.14. It shall not be improper for a party, its officers, employees, legal advisor or other representatives to interview its witnesses or potential witnesses and to discuss their prospective testimony with them.

18.15. Any further matter regarding the examination of witnesses and experts shall be addressed at the pre-hearing organizational meeting in §19 below.

19. Pre-Hearing Organizational Meetings
Arbitration Rule 13

19.1. A pre-hearing organizational meeting shall be held at a date determined by the Tribunal after consultation with the parties by telephone between the Tribunal, or its President, and the parties in order to resolve any outstanding procedural, administrative, and logistical matters in preparation for the hearing.

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20. Hearings
Arbitration Rules 20(1)(e) and 32

20.1. The oral procedure shall consist of a hearing for examination of witnesses and experts, if any and, if one party so requests and/or the Tribunal deems it necessary, for oral arguments.

20.2. The hearing shall be held at a place to be determined in accordance with §10 above.

20.3. The hearing shall take place a minimum of 4 weeks after the filing of the last written submission.

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

20.5. Unless either party objects, the Tribunal, after consultation with the Secretary-General, may allow other persons, besides the parties, their agents, counsel and advocates, witnesses and experts during their testimony, and officers of the Tribunal, to attend or observe all or part of the hearings.

20.6. Other matters regarding hearings shall be agreed upon by the parties or decided by the Tribunal at a later stage.

21. Records of Hearings and Sessions
Arbitration Rules 13 and 20(1)(g)

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

21.2. The Tribunal Secretary may prepare summary minutes of hearings and sessions upon request.

21.3. Verbatim transcript(s) in the procedural language(s) shall be made of any hearing and session other than sessions on procedural issues. Unless otherwise agreed by the parties or ordered by the Tribunal, the verbatim transcripts shall be available in real-time using LiveNote or similar software and electronic transcripts shall be provided to the parties and the Tribunal on a same-day basis.

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

22. Post-Hearing Memorials and Statements of Costs
Convention Article 44; Arbitration Rule 28(2)

22.1. The Tribunal shall decide on whether any post-hearing briefs shall be required, and fix the modalities for submissions of statements of costs, at the hearing.

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23. Publication
Convention Article 48(5), Administrative and Financial Regulation 22, Arbitration Rule 48(4)

23.1. The ICSID Secretariat will publish the award and any order or decision in the present case where both parties consent to publication. Otherwise, ICSID will publish excerpts of the award pursuant to Arbitration Rule 48(4) and include bibliographic references to rulings made public by other sources on ICSID’s website and in its publications.

24. Other Matters

24.1. Advance payments: see §9.

[Signed]

Professor George A. Bermann
President of the Tribunal
Date: October 5, 2018

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ANNEX A

PROCEDURAL TIMETABLE