Commodities and Minerals Enterprise LTD v CVG Ferrominera Orinoco CA - Final Arbitration Award - 20 December 2018
Country
Year
2018
Summary
This unanimous award ("Award") concerns claimant Commodities & Minerals Enterprise Ltd.'s ("CME") claim against respondent-counterclaimant CVG Ferrominera Orinoco, C.A. ("FMO") for damages, and FMO's defenses and counterclaims, under the Transfer System Management Contract ("TSMC") dated August 7, 2010 for the management and operation by CME of FMO's iron ore Transfer System ("TSMC Arbitration"). As amended during the course of the arbitration hearings, CME's claim is in the amount of $135,303,946.90 for unpaid invoices and lost profits, plus interest, attorney's fees and costs. In the alternative, CME alleges a claim for an account stated in the amount of $96,804,020.59. In addition to denying liability, FMO has asserted rights of set-off and counterclaims for CME's alleged breach of the TSMC. The TSMC provides for arbitration in Miami, Florida in accordance with the Rules of the Society of Maritime Arbitrators ("SMA"). However, by special agreement, both parties opted to conduct consolidated hearings in New York for this arbitration and a second related dispute involving the time charter of the MV General Piar ("General Piar Arbitration").
For the reasons discussed in the attached narrative Appendix A "Reasons for Award," (which forms an integral part of this Award) common to both the TSMC Arbitration and the General Piar Arbitration Awards, we find the TSMC was a valid and binding contract which FMO failed to perform and, therefore, breached. Accordingly, except as shown below, FMO's counterclaims are dismissed. The Panel grants CME's claims in part and awards it net damages as summarized below.
All costs of the TSMC Arbitration, including arbitrators' fees and costs, are the joint and several liability of both parties, but as between them, are assessed in full against FMO. Pursuant to the attached Appendix B, which forms an integral part of this Award, the fees and expenses of each of the three arbitrators are assessed in full to FMO and are to be paid from the joint escrow account established for this purpose with Blank Rome LLP. However, FMO's failure to fully fund its share of the escrow has produced a shortfall of $1,102,465.00, which, pursuant to the parties' joint and several liability, is to be made good by CME. The shortfall of $1,102,465.00 is added to the other amounts hereby awarded to CME.
In summary, we unanimously find that FMO breached the TSMC thereby entitling CME to an Award for the following damages:
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Arbitration Panel:
A.J. Siciliano
George R. Wentz, Jr.
John D. Kimball, Chairman