International Centre for Settlement of Investment Disputes ...
International Centre for Settlement of Investment Disputes _________________________________________________________________________
METAL-TECH LTD. CLAIMANT v.
THE REPUBLIC OF UZBEKISTAN RESPONDENT
ICSID Case No. ARB/10/3
AWARD _________________________________________________________________________
Rendered by an Arbitral Tribunal composed of: Prof. Gabrielle Kaufmann-Kohler, President Mr. John M. Townsend, Arbitrator Mr. Claus von Wobeser, Arbitrator
Secretary of the Tribunal: Ms. Geraldine Fischer
Date of dispatch to the parties: 4 October 2013
TABLE OF CONTENTS TABLE OF ABBREVIATIONS.................................................................................................... 5 I. INTRODUCTION ............................................................................................................... 7 A. The Parties ....................................................................................................................... 7
1. The Claimant ..................................................................................................................... 7 2. The Respondent ................................................................................................................ 8 B. Main Facts ........................................................................................................................ 8 1. The Uzbek Molybdenum Industry....................................................................................... 8 2. Feasibility Study............................................................................................................... 10 3. Resolutions Nos. 15 and 29F ........................................................................................... 10 4. Charter and Constituent Contract of Uzmetal................................................................... 12 5. Contract No. 0150500/U .................................................................................................. 13 6. Export Contract No. 180800EX ........................................................................................ 13 7. Consulting Contracts........................................................................................................ 14 8. Origin of the Present Dispute ........................................................................................... 14 II. PROCEDURAL HISTORY............................................................................................... 18 A. Initial Phase.................................................................................................................... 18 B. Written Phase on Jurisdiction and Merits .................................................................... 21 C. January Hearing and Further Submissions ................................................................. 24 D. May Hearing ................................................................................................................... 27 III. POSITIONS OF THE PARTIES AND RELIEF REQUESTED .......................................... 29 A. The Claimant's Position and Request For Relief ......................................................... 29 B. The Respondent's Position and Request For Relief.................................................... 33 IV. ANALYSIS....................................................................................................................... 37 A. Preliminary Matters........................................................................................................ 38 1. Relevance of Previous Decisions and Awards ................................................................. 38
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2. Scope of this Award ......................................................................................................... 38 3. Legal Framework ............................................................................................................. 39 B. Jurisdictional Objections to Treaty Claims.................................................................. 39 1. Applicable Law................................................................................................................. 39
a. ICSID Convention ................................................................................................... 40 b. BIT.......................................................................................................................... 42 2. Legality Requirement and MFN........................................................................................ 44 a. Claimant's Position ................................................................................................. 44 b. Respondent's Position ............................................................................................ 46 c. Analysis .................................................................................................................. 48 3. Scope of the Legality Requirement .................................................................................. 54 a. Subject Matter of the Legality Requirement ............................................................ 54 b. Time of the Legality Requirement ........................................................................... 55
i. Respondent's Position .......................................................................................... 55 ii. Claimant's Position ............................................................................................... 58 iii. Analysis ................................................................................................................ 60 4. Key Facts......................................................................................................................... 62 a. Payment ................................................................................................................. 63 b. Amounts of Payments............................................................................................. 63 c. No Services or Proof of Services ............................................................................ 65 d. Lack of Qualification of the Consultants .................................................................. 67 e. Sham Consulting Contracts .................................................................................... 69 f. Lack of Transparency of Payee .............................................................................. 72 g. Connections with Public Officials in Charge of Claimant's Investment .................... 74 5. Factors Relevant to the Assessment of Evidence ............................................................ 75 a. Burden and Standard of Proof ................................................................................ 75
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i. Respondent's Position .......................................................................................... 75 ii. Claimant's Position ............................................................................................... 77 iii. Analysis ................................................................................................................ 77 b. Claimant's Failure to Substantiate Services Rendered by the Consultants ............. 80 c. Timing of Payments to the Consultants................................................................... 89 d. Evidence of Mr. Mikhailov ....................................................................................... 92 6. Violation of Uzbek Laws on Bribery.................................................................................. 93 a. Respondent's Position ............................................................................................ 93 b. Claimant's Position ................................................................................................. 94 c. Analysis .................................................................................................................. 94 i. Mr. Chijenok ......................................................................................................... 99 (i) Respondent's Position ............................................................................................ 99 (ii) Claimant's Position ............................................................................................... 104 (iii) Analysis ................................................................................................................ 107 ii. Mr. Sultanov ....................................................................................................... 112 (i) Respondent's Position .......................................................................................... 112 (ii) Claimant's Position ............................................................................................... 114 (iii) Analysis ................................................................................................................ 116 iii. Mr. Ibragimov ..................................................................................................... 121 (i) Respondent's Position .......................................................................................... 121 (ii) Claimant's Position ............................................................................................... 124 (iii) Analysis ................................................................................................................ 125 iv. Mr. Mikhailov ...................................................................................................... 126 v. Messrs Shwa, Krespel, and Gurtovoi.................................................................. 127 vi. Conclusion.......................................................................................................... 128 C. Jurisdictional Objections to Uzbek Law Claims ........................................................ 129
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D. Conclusion on claims .................................................................................................. 132 E. Counterclaims .............................................................................................................. 133
1. Respondent's Position ................................................................................................... 133 2. Claimant's Position ........................................................................................................ 136 3. Analysis ......................................................................................................................... 137 V. COSTS .......................................................................................................................... 140 VI. DECISION ..................................................................................................................... 142
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TABLE OF ABBREVIATIONS
AGMK BIT / Treaty
C-CB 1 C-CB 2 C-Mem. M.
C-PHB 1 C-PHB 2 Exh. CExh. CLExh. RExh. RLICSID ICSID Convention
January Hearing Lacey International May Hearing Mem. J.
Mem. M.
MPC MPC Companies PO 1 PO 2 PO 3 PO 4 PO 5 PO 6
Almalik Mining Metallurgy Combinate Bilateral Investment Treaty; specifically "Agreement Between the Government of the State of Israel and the Government of the Republic of Uzbekistan for the Promotion and Reciprocal Protection of Investments" of 4 July 1994 Metal-Tech's Costs Brief of 1 August 2012 Metal-Tech's Reply Costs Brief of 22 August 2012 Uzbekistan's Counter-Memorial on Merits and Reply on Jurisdiction and Admissibility of 2 June 2011 Metal-Tech's First Post-Hearing Brief of 18 June 2012 Metal-Tech's Reply Post-Hearing Brief of 2 August 2012 Metal-Tech's Exhibits Metal-Tech's Legal Exhibits Uzbekistan's Exhibits Uzbekistan's Legal Exhibits International Centre for Settlement of Investment Disputes Convention on the Settlement of Investment Disputes between States and Nationals of other States Hearing Conducted between 23-28 January 2012 Lacey International Corp. Hearing Conducted on 29 May 2012 Uzbekistan's Memorial on Jurisdiction, Admissibility, and Bifurcation of 11 November 2010 Metal-Tech's Statement of Claim and Counter-Memorial on Jurisdiction and Bifurcation of 14 February 2011 MPC International Investments and Consultants GmbH MPC and MPC-Tashkent Procedural Order No. 1 dated 8 March 2011 Procedural Order No. 2 dated 14 July 2011 Procedural Order No. 3 dated 13 December 2011 Procedural Order No. 4 dated 22 December 2011 Procedural Order No. 5 dated 13 January 2012 Procedural Order No. 6 dated 15 January 2012
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PO 7 PO 8 PO 9 PO 10 PO 11 PO 12 R-CB 2 R-PHB 1 R-PHB 2 RA or Request Rej. M. Reply M.
Tr. [page:line] VCLT / Vienna Convention WS
Procedural Order No. 7 dated 10 February 2012 Procedural Order No. 8 dated 13 March 2012 Procedural Order No. 9 dated 2 April 2012 Procedural Order No. 10 dated 17 April 2012 Procedural Order No. 11 dated 22 May 2012 Procedural Order No. 12 dated 12 July 2012 Uzbekistan's Reply Costs Brief of 22 August 2012 Uzbekistan's Post-Hearing Brief of 18 June 2012 Uzbekistan's Post-Hearing Brief of 2 August 2012 Metal-Tech's Request for Arbitration dated 26 January 2010 Uzbekistan's Rejoinder on the Merits of 23 November 2011 Metal-Tech's Reply on Merits and Rejoinder on Jurisdiction of 9 September 2011 Transcript of the hearing Vienna Convention on the Law of Treaties
Witness Statement
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I. INTRODUCTION
A. THE PARTIES
1. The Claimant
1. Metal-Tech Ltd.1 ("Metal-Tech" or "the Claimant") is a manufacturer of ceramic powders, metals and metal derivatives, including molybdenum products.2 It is a public company organized under the laws of the State of Israel, with its offices at Beer-Sheva 84874, Ramat Hovov St., P.O. Box 2412, Israel.
2. The Claimant has been represented in this arbitration by:
? Covington & Burling LLP Mr. O. Thomas Johnson, Jr. (until 6 April 2012) Ms. Marney Cheek Mr. Eugene D. Gulland (from 18 April 2012) Mr. Jonathan Gimblett Mr. John F. Scanlon Mr. Alexander Berengaut 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2401 United States of America Tel: +1 202 662 6000 Fax: +1 202 662 6291 Email: mcheek@ jgimblett@
Ms. Carmen Mart?nez L?pez 265 Strand London WC2R 1BH England Tel:+44 20 7067 2000 Fax:+44 20 7067 2222 Email: cmartinez@
? Ms. Maayan Bar, Adv Metal-Tech Ltd. Sea & Sun, Suite 4410 8, Herzl Rosenblum Street Tel Aviv, 69379
1 Prior to 24 July 2001, Metal-Tech Ltd. was known as Metek Metal Technology, Ltd. (RA n.1). 2 See RA n.3 (describing molybdenum as a "metallic element used to enhance the strength, durability, and corrosion resistance of steel, cast iron, and superalloys. Molybdenum products have many advanced applications in the industrial technology sector").
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