Summary

Source: icsid.worldbank.org

CLAIMANT'S WRITTEN SUBMISSIONS ON REQUEST FOR BIFURCATION OF DAMAGES

A. BRIEF BACKGROUND

A.1 Factual Background

1. On 27 March 2023, China Machinery Engineering Corporation (CMEC or Claimant) submitted its Request for Arbitration against the Republic of Trinidad and Tobago (Trinidad and Tobago or Respondent) to the International Centre for Settlement of Investment Disputes (ICSID). The underlying dispute between the Parties concerns an abandoned 125,000 metric-tonne-per-year aluminium smelter complex located in La Brea, Trinidad and Tobago (Project), in respect of which CMEC performed engineering, procurement and construction works as contractor.

2. In essence, and as detailed in the Request for Arbitration, CMEC's claim relates to the Respondent's (a) wrongful shut-down of the Project in 2012, and (b) failure to pay any compensation to CMEC in connection with or following the termination of the Project despite its repeated assurances to do so. In conducting itself in this way, the Respondent has breached multiple obligations toward CMEC under the Agreement between the Government of the Republic of Trinidad and Tobago and the Government of the People's Republic of China on the Reciprocal Promotion and Protection of Investments (BIT).

3. Four key breaches of the BIT by Trinidad and Tobago form the core of CMEC's case either alternatively or cumulatively:

3.1 unlawful expropriation in breach of Article 6 of the BIT;

3.2 failure to accord fair and equitable treatment in breach of Article 3(2) of the BIT;

3.3 failure to observe the non-impairment obligation under Article 3(3) of the BIT; and

3.4 failure to observe the umbrella clause under Article 13(2) of the BIT.

4. In relation to the compensation sought, CMEC estimates that the losses it has sustained as a result of these breaches amount to over US $300 million. Having invested in the Project since 2005, the heads of loss that make up CMEC's total claimed amount are multiple and complex, including, non-exhaustively, the following:

4.1 value of various works completed, a substantial portion of which concerns the design and engineering of the Project as documented in voluminous technical literature, proprietary drawings, and other design documents;

4.2 value of equipment and materials delivered to the construction site;

4.3 downtime costs;

4.4 site maintenance costs;

4.5 demobilisation and associated costs;

4.6 overhead costs;

4.7 loss of profit;

4.8 loss on the exchange rate; and

4.9 overdue interest.

5. As is evident, the assessment of damages in this case would be a time-consuming and complicated endeavour as it covers various costs of different types over a very extended period of time (incurred prior to, upon, and after the termination of the Project), involves many technical, economic, and financial aspects, and will be informed by the Tribunal's decision on liability and related findings.

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