Reproduced from www.worldbank.org/icsid with permission of ICSID.
1.1 By Notice of Arbitration dated 23 October 2018 (the "Notice of Arbitration"), the Claimants commenced these arbitration proceedings against the Respondents pursuant to Clause 12 of the Contract of Stock Transfer executed on 23 October 1997 (the "Stock Transfer Agreement"), Clause 3 of the Guaranty Agreement executed on 21 November 1997 (the "Guaranty Agreement") and Article 3 of the UNCITRAL Arbitration Rules.
1.2 On 10 June 2019, Renco, Doe Run Resources Corporation, Peru, and Activos Mineros S.A.C. executed a Procedural Agreement, by which the Parties agreed that (i) the instant arbitration would be coordinated with the arbitration brought under the Trade Promotion Agreement between the Republic of Peru and the United States of America, dated 12 April 2006, entered into force on 1 February 2009, The Renco Group, Inc. v. Republic of Peru, PCA Case No. 2019-46 ("Renco II" or the "Treaty Case"), (ii) the same tribunal would be constituted to hear both arbitrations, and (iii) both arbitrations would be conducted in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (as revised in 2010, with new article 1, paragraph 4, as adopted in 2013) (the "UNCITRAL Arbitration Rules").
1.3 On 14 January 2019, the Respondents submitted their Response to the Notice of Arbitration (the "Response to the NoA").
1.4 On 3 December 2019, the Respondents sent a letter to the Tribunal "giv[ing] notice regarding certain objections" with respect to "deficiencies and [...] certain threshold objections, including without limitation with respect to the relevant parties and scope of the agreement to arbitrate."1
1.5 On 14 January 2020, a first procedural meeting was held via telephone conference during which the Parties agreed, and the Tribunal confirmed, that the procedural calendar for subsequent phases, if any, would be decided at the conclusion of the initial phase.
1.6 On 28 January 2020, the Respondents submitted a notice regarding bifurcation of preliminary issues.
1.7 On 3 February 2020, the Tribunal issued Procedural Order No. 1, which established a procedural calendar for written submissions leading up to a Hearing on Bifurcation.
1.8 On 11 February 2020, the Claimants submitted their comments on the Respondent's notice regarding bifurcation (the "Comments on Notice of Bifurcation").
1.9 On 21 February 2020, the Respondents submitted their Request for Bifurcation on Preliminary Issues (the "Request for Bifurcation").
1.10 On 20 March 2020, the Claimants submitted their response to the Request for Bifurcation (the "Response").
1.11 Having confirmed the Parties' availability, by letter dated 27 February 2020, the Tribunal determined that the Hearing on Bifurcation would take place on 13 June 2020 instead of the originally-scheduled date (i.e., 1 April 2020).
1.12 By respective letters dated 15 May 2020, the Parties proposed that the Hearing on Preliminary Objections take place by videoconference over two days rather than in person in Washington, D.C.
1.13 On 19 May 2020, the Tribunal confirmed that the Hearing on Preliminary Objections would take place by videoconference on 12-13 June 2020 and circulated a Draft Procedural Order No. 2 concerning the organization of the hearing for the Parties' comments.
1.14 On 3 June 2020, the Tribunal issued Procedural Order No. 2, establishing the format, schedule and all the technical and ancillary aspects for the Hearing on Bifurcation.
1.15 On 5 June 2020, a pre-hearing videoconference was held in order to discuss the organization of the Hearing on Bifurcation.
1.16 The hearing on Respondents' request for bifurcation (the "Hearing on Bifurcation") was held over two days by videoconference, 12 to 13 June 2020. The following persons attended the hearing:
4 The Tribunal's Analysis
4.1 The Parties agree that the Tribunal's decisions on the organization of the proceedings in accordance with Articles 17 and 23 of the UNCITRAL Rules are to be guided by considerations of fairness and efficiency, as mentioned expressly in Article 17(1) and also impliedly incorporated in Article 23. The Parties also agree on the applicable test to meet the twin criteria of fairness and efficiency in respect of an application for the bifurcation of preliminary objections. In order to support bifurcation, the objections in question should be:
(i) prima facie serious and substantial;
(ii) not intertwined with the merits; and
(iii) capable, if successful, of disposing of the claims or an essential part of the claims.
4.2 Preliminarily, the Tribunal considers that all three of the Respondents' objections are serious and substantial. The Respondents' objections would also dispose of all, or at least the majority of, the Claimants' claims, even if the Claimants' claims under the Peruvian Civil Code for contribution and unjust enrichment were left standing. For the avoidance of doubt, however, the Tribunal notes that its review of the claims and defences at this stage of the proceedings is necessarily a limited and preliminary exercise. While the Tribunal's current view is that the Respondent's objections would justify bifurcation, this does not reflect any settled views on the merits of the objections to jurisdiction or on the merits of the dispute itself.
4.3 On the other hand, the Tribunal agrees with the Claimants that the Respondent's objections are intertwined with the merits and may require the consideration of closely related arguments and much of the same evidence as the merits. Bifurcation is therefore not warranted in the sense that significant inefficiency is likely to result if the Respondent's objections are not ultimately upheld. The Tribunal would in that scenario be required to reassess a lot of the same or similar evidence and argument once again on the merits, whereas it may otherwise have been able, with modest additional time and expense, to decide most or all of the merits in a single phase.
4.4 The Tribunal notes the Respondent's warning regarding the volume of evidence from and relating to the St. Louis lawsuits that might have to be brought into the record of these proceedings for the assessment of the merits of the Claimants' claims in this arbitration. However, the Tribunal considers that this issue can be managed appropriately, the Parties remaining free to make an application to the Tribunal as to how to handle this issue most efficiently as and when it arises.
5 The Tribunal's Decision
5.1 For the foregoing reasons, the Tribunal dismisses the Respondent's Request for Bifurcation.
So ordered by the Tribunal.