Red Eagle Exploration Limited v The Republic of Colombia - ICSID Case No. ARB/18/12 - Decision on Bifurcation - English - 3 August 2020
Reproduced from www.worldbank.org/icsid with permission of ICSID.
1. On March 21, 2018, Red Eagle Exploration Limited ("Red Eagle" or the "Claimant"), filed a Request for Arbitration ("RfA") against the Republic of Colombia ("Colombia" or the "Respondent") pursuant to the Canada-Colombia Free Trade Agreement ("FTA" or "Treaty"). The Tribunal was constituted on April 19, 2019. Procedural Order No. 1 was issued on December 12, 2019 (the "PO1"). A decision on the Respondent's preliminary objections pursuant to ICSID Arbitration Rule 41(5) was issued on December 16, 2019.
2. On January 28, 2020, the proceeding was stayed for non-payment of the required advances pursuant to ICSID Administrative and Financial Regulation 14(3)(d). It was resumed on February 6, 2020, following payment of the required advances.
3. Following the parties' agreement on an extension for the filing of their submissions, an amended Annex B to Procedural Order No. 1 was transmitted to the parties on April 6, 2020.
4. In accordance with the amended procedural calendar, the Claimant submitted its Memorial on the Merits on May 16, 2020, together with Appendices A to C, Indices of Exhibits and Legal Authorities, Witness Statement of Ana Milena Vásquez with Appendices A and B, Expert Report of Kiran Sequeira with Appendices A to C.5 and Exhibits VP-01 to VP-52, Legal Opinion of Adriana Martínez Villegas with Appendices A and B, Exhibits C-0001 to C-0814 and Legal Authorities CL-001 to CL-0152 (the "Memorial").
5. On June 2, 2020, an amended Procedural Order No. 1 was transmitted to the parties reflecting a change in the transmittal of the parties' hardcopies of their submissions.
6. On June 16, 2020, the Respondent filed a Request for Bifurcation together with Indices of Exhibits and Legal Authorities; Exhibits R-009 to R-014; and Legal Authorities RL-0011 to RL-0039 (the "Bifurcation Request").
7. On July 16, 2020, the Claimant submitted its Observations on the Respondent's Request for Bifurcation, together with an Index of Legal Authorities and Legal Authorities CL-0153 to CL- 0187 (the "Claimant's Observations on Bifurcation").
D. Bifurcation of the merits into liability and quantum
68. The damages calculation put forward by Claimant does not appear prima facie to be complex since it claims full reparation of sunk costs based on its audited financial statements. The bifurcation requested by Colombia would only be justified if it can be assumed or prima facie determined from the outset that the damages determination will be a complex matter. Claimant's claim based on sunk costs backed by audited financial statements suggests otherwise. Therefore, at this stage the Respondent's request for bifurcating the merits phase into liability and quantum is not justified and is premature. This conclusion does not prevent the Respondent from demonstrating at a later stage the complexity of the calculation of damages to sustain a bifurcation request of the merits.
69. Each party has requested the Tribunal to order the other party to pay for the costs incurred associated with the Bifurcation Request. The Tribunal considers that a decision on costs at this early stage of the proceeding would be premature, and that it is a decision more appropriately made at a later stage when the Tribunal has an overall view of the proceeding.
70. For the preceding reasons the Tribunal decides:
1. To reject the Request for Bifurcation.
2. To declare that the procedural calendar set forth in Scenario 3 of Annex B, as amended, of Procedural Order No. 1 is now in effect, and the Counter-Memorial on the Merits and Memorial on Jurisdictional Objections are due 90 days from the date of this Decision.
3. To reserve its position on costs until a later stage of the proceedings.