Huntington Ingalls Incorporated USA v The Ministry of Defense of the Bolivarian Republic of Venezuela - Ad Hoc UNCITRAL Arbitration - Final Award and Note of Dissent Horacio A. Grigera Naón - 19 February 2018
Country
Year
2018
Summary
Final Award
Arbitral Tribunal:
Horacio A. Grigera Naón
Antonio Hierro
José Emilio Nunes Pinto
...
III. Arbitration Clause
These proceedings are based on the Arbitration Clause contained in article 42 of the Contract CGA-CNALO-002-97 executed by the Parties in December 1997 (the "Contract") as follows:
"CUADRAGÉSIMA SEGUNDA: En caso de una disputa o incumplimiento, o cuestión de interpretación relacionado a este Contrato, "LA CONTRATISTA" y "EL MINISTERIO" se reunirán y negociarán de buena fe para dirimir el asunto amigablemente. Si las partes no pueden dirimir el asunto dentro de treinta (30) días continuos después de plantearse la disputa, entonces, a solicitud de cualquiera de las partes, el asunto será sometido a arbitraje de acuerdo con esta Cláusula. En caso de no resolverse con el arbitraje antes mencionado, ambas partes tendrán derecho de acudir por ante los Tribunales competentes de la República de Venezuela.
Parágrafo Primero: Cualquier disputa, demanda, controversia y/o diferencia que surjan de este Contrato o relacionada con la interpretación, incumplimiento, terminación o invalidación del mismo, será sometido de acuerdo con las reglas estipuladas aquí y subsidiariamente de acuerdo a las reglas del Código de Procedimiento C.I.V.il [sic] de Venezuela. Las actuaciones de arbitraje, serán realizadas en Caracas, Venezuela, en el idioma Castellano-Inglés. El jurado de arbitraje, consistirá de tres (3) árbitros independientes, quienes deberán ser miembros de la Cámara de Comercio Internacional, fluidos en los idiomas Castellano-Inglés, entendiéndose que cada parte nombrará un árbitro y el tercer árbitro quien presidirá el jurado de arbitraje, será elegido por los dos (2) árbitros nombrados por las partes para este fin.
En caso de que dentro de treinta (30) días continuos después de su nombramiento, los dos (2) árbitros no hayan logrado un acuerdo en relación a la elección del tercer árbitro, éste último será nombrado por la Cámara de Comercio Internacional o cualquier sucesor de estos. Los árbitros actuarán como árbitros de derecho y deberán pronunciar su decisión dentro de un término de tres (3) meses máximo.
Parágrafo Segundo: Cualquier arbitraje en virtud de este contrato, será realizado en Caracas, Venezuela. Las partes acuerdan que en caso de arbitraje, se seguirán las reglas convenidas en el Código de Procedimiento C.I.V.il [sic] de Venezuela."
....XVII. Dispositive Section
The Arbitral Tribunal, after careful consideration, decides as follows:
(1) Claimant's constructive claims listed below and identified by the respective REA number are awarded, and the Arbitral Tribunal orders the Ministry to pay Claimant the following amounts indicated below together with interest accruing thereon, at the rate and from the date indicated hereinbelow:
[...]
(2) All of Claimant's other constructive claims are hereby dismissed by the Arbitral Tribunal.
(3) Claimant's claim for indemnification for delay damages is partially awarded and the Ministry is ordered to pay Claimant the amount of US$ 16,755,862.50 together with interest accruing thereon, at the rate and from the date indicated hereinbelow.
(4) Claimant's claims for indemnification for unabsorbed overhead and cross contract claims are hereby dismissed by the Arbitral Tribunal.
(5) Claimant's claim for outstanding payments under the fixed price portion of the Contract is awarded and the Ministry is ordered to pay Claimant the amount of US$ 3,951,341.00 together with interest accruing thereon, at the rate and from the date indicated hereinbelow.
(6) The Ministry's counterclaim is admitted by the Arbitral Tribunal solely for the purposes of examining and deciding the claim for indemnification for delay damages.
(7) The Ministry's claim for indemnification for delay damages under the penalty clause is partially awarded and Claimant is ordered to pay the Ministry the amount of US$ 13,900,000.00 together with interest accruing thereon, at the rate and from the date indicated hereinbelow.
(8) All other claims by the Ministry under the counterclaim are hereby held inadmissible by the Arbitral Tribunal.
(9) The pecuniary orders provided by this Awarded shall be paid together with interest at the rate of 8.713% per annum, and interest shall be computed as follows:
(y) in the case of payments to Claimant, interest shall be computed from April 5, 2002 to and including the actual payment date; and
(z) in the case of payments to the Ministry, interest on the claim awarded under the Ministry's counterclaim shall be computed from March 10, 2011 to and including the actual payment date.
(10) The Ministry's claim with respect to the lifting of the provisional measure affecting funds deposited with BONY is hereby partially awarded to order Claimant to lift such measure but only after being paid in full all amounts to which it is entitled under this Award or having otherwise used or disposed of such amounts or bonds.
(11) The Arbitral Tribunal decides that each Party shall bear its own legal costs and expenses in connection with this arbitration and shall split evenly the costs and fees (including the arbitrators' fees) related to this arbitration. In view of the foregoing, Claimant is entitled to the following payments to be made by the Ministry: (i) US$ 627,500.00, as costs and expenses associated with the arbitration; (ii) US$ 13,399.97, as the balance of the amount due for payments made directly by the ICC in connection with the Hearing, and (iii) US$ 31,601.74, as the Ministry's share of the advance of costs related to the reservation of the Hearing and breakout rooms paid by Claimant to Caesar Park Hotel. The Ministry is ordered to make such payments to Claimant.
(12) All other claims by the Parties are hereby dismissed.
......
Note of Dissent Horacio A. Grigera Naón
Ref: Ad-hoc UNCITRAL Arbitration Huntington Ingalls Incorporated v / Ministerio de la Defensa de la Republica Bolivariana de Venezuela
My colleagues in the Arbitral Tribunal hearing the present case are issuing by majority a Final Award (the "Award") in this arbitration. Since I do not agree with parts of the reasoning and accompanying decisions regarding delay claims and the counterclaim, I am forced to dissent as follows:
...
Since the Respondent had to resort to arbitration to assert its rights and paid for most of the costs and fees of the arbitrators without the contribution of the Respondent, including those pertaining to the Counterclaim, the Respondent should reimburse the Claimant all sums paid by the Claimant for arbitrators' fees and costs and the administrative charges of the ICC.