Data

Date:: 04-06-2004
Country:: International Centre for Settlement of Investment Disputes (ICSID)
Number:: ARB/02/5
Court:: International Centre for Settlement of Investment Disputes (ICSID)
Parties:: PSEG Global & others v. Republic of Turkey

Keywords

STATE CONTRACTS - LONG-TERM CONTRACTS - BUILD-OPERATE-TRANSFER (BOT) CONTRACT FOR THE DEVELOPMENT OF ELECTRICITY PLANT IN TURKEY - BETWEEN A UNITED STATES-TURKISH CONSORTIUM AND THE TURKISH GOVERNMENT - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET APPLICABLE LAW (INTERNATIONAL LAW)

CONTRACT WITH ESSENTIAL TERMS DELIBERATELY LEFT OPEN AND TO BE AGREED UPON AT LATER DATE - CONTRACT VALID IF PARTIES INTENDED TO BE BOUND BY THE CONTRACT - REFERENCE BY CLAIMANT TO ART. 2.14 (NOW 2.1.14) OF THE UNIDROIT PRINCIPLES- ARBITRAL TRIBUNAL CONFIRMED

Abstract

Claimants, two U.S. based companies and one Turkish company, entered into negotiations with Respondent, the Turkish Ministry of Energy, with a view to entering into an agreement for the development of an electric power plant in Turkey on a BOT (“Build-Operate-Transfer”) basis. According to the envisaged project Claimants were to build and operate the plant at their own expense and to sell the electricity generated to the Turkish state-owned electric entity at a fixed price over a certain period of time so as to recover the costs of the project before transferring ownership of the plant to the Turkish Government. On the basis of a feasibility study prepared by Claimants the parties reached an agreement on the key commercial terms of the project, such as the generating capacity of the plant, the price of the electricity to be sold and the operational period, that was subsequently approved as required by law by the Turkish Council of State in the form of a Concession Contract (hereinafter: the Contract).

The Contract contained a provision according to which “If necessary, [Claimants] will prepare a revised mine plan based on such additional research and exploration conducted in the mine site prior to the construction start date. If such revised mine plan increases [Claimants’s] estimated fuel production cost, [Claimants] shall submit to the Ministry a revised tariff reflecting such cost increase, which the Ministry shall approve or disapprove in no later than sixty days after the submission by [Claimants]. In the event the Ministry withholds its approval for the revised tariff on the basis of reasonable grounds and if [Claimants] abandon the project prior to the construction start date, [Claimants] and the Ministry shall have no claims against the other.” In fact, soon after the approval of the Contract, Claimants submitted a “revised mine plan” according to which the overall costs of the project were to increase considerably as compared to the original cost estimates and asked Respondent to renegotiate the terms of the Contract so as to take into account the new figures. Notwithstanding prolonged negotiations the parties were unable to reach a final agreement, prompting Claimants to commence arbitration before ICSID.

According to Claimants Respondent, after having authorised the project and concluded the Contract, breached a number of obligations arising out of the Contract that were essential to the success and feasibility of the project, thereby deliberately destroying Claimants’ investment in Turkey. In rejecting Respondent’s objection that the Contract did not contain the essential agreed commercial terms and therefore was not a valid and binding contract but at best a mere agreement to negotiate further, Claimants invoked Art. 2.14 [now 2.1.14] of the UNIDROIT Principles to demonstrate that it is not always necessary to reach an agreement on all the essential terms of a contract as long as the parties have the intention of concluding a contract.

In deciding in favor of Claimants the Arbitral Tribunal, though without expressly referring to Art. 2.1.14 of the UNIDROIT Principles, confirmed the argument that the fact that a contract contains a mechanism for renegotiating its terms does not affect the validity of the contract, and that in the case at hand both the language of the Contract as well as the circumstances demonstrated an intent by the parties to be bound in spite of the fact that certain terms still needed to be agreed upon at a later date.

Fulltext

I. Procedure
A. Registration of the Request for Arbitration
1. On March 22, 2002, the International Centre for Settlement of Investment Disputes (“ICSID” or “the Centre”) received a request for arbitration against the Republic of Turkey (“Turkey” or the “Respondent”) from PSEG Global Inc. (PSEG), a company incorporated under the laws of New Jersey in the United States of America (USA); the North American Coal Corporation (“North American Coal”), a company incorporated under the laws of the state of Delaware in the USA; and Konya Ilgin Elektrik Üretim ve Ticaret Limited Sirketi (the “Project Company”), described in the request for arbitration as a special purpose limited liability company incorporated under the laws of Turkey and wholly owned through several subsidiaries by PSEG (together referred to as the “Claimants”).
2. The request invoked the ICSID arbitration provisions in the Treaty between the United States of America and the Government of the Republic of Turkey Concerning the Reciprocal Encouragement and Protection of Investments (the “Treaty”), which was signed on December 3, 1985 and entered into force on May 18, 1990.
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7. The Claimants, by a letter of June 6, 2002, appointed Mr. L. Yves Fortier, C.C., Q.C., a national of Canada, as arbitrator and by letter of June 25, 2002, the Respondent appointed Professor Gabrielle Kaufmann-Kohler, a Swiss national, as arbitrator. By agreement, the parties in a joint letter of October 22, 2002 appointed Professor Francisco Orrego Vicuña, a national of Chile, as the presiding arbitrator.
8. All three arbitrators having accepted their appointments, the Centre by a letter of October 25, 2002, informed the parties of the constitution of the Tribunal, consisting of Professor Francisco Orrego Vicuña, Mr. L. Yves Fortier, C.C., Q.C., and Professor Gabrielle Kaufmann-Kohler, and that the proceeding was deemed to have commenced on that day, pursuant to ICSID Arbitration Rule 6(1).
C. Written and Oral Proceedings
9. After consulting with the parties and the Centre, the Tribunal scheduled a first session for January 8, 2003, and the parties, by a joint letter of December 23, 2002, communicated to the Tribunal their agreement on procedural matters identified in the provisional agenda for the first session, which had been sent to them by the Tribunal's Secretary. In that letter, the parties notified the Tribunal that the Respondent intended to raise objections to jurisdiction, which the Tribunal would be required to rule on before proceeding to the merits of the case in accordance with Article 41 of the ICSID Arbitration Rules.

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II. Considerations
A. The facts of the dispute
The early start-up of the Project, the Feasibility Study and the Implementation Contract
18. In the past two decades Turkey has undertaken an important expansion of its energy sector with a view to ensuring the overall development of its economy. In 1984, Parliament enacted Law No. 3096 authorizing private companies to build and operate generation facilities and to sell the generated electricity to TEAS, the Turkish state-owned electric entity. Under this Law a “Build-Operate-Transfer” (“BOT”) model was established, allowing private investors to undertake the generation project with the requirement of transferring to the Government the ownership of the site and plant at the end of the authorization period. This legal framework was perfected in 1994 with the enactment of Law No. 3996, which in essence provided for the BOT contracts and agreements to operate subject to private law.
19. Foreign investment was expected to be a key feature in this energy expansion program. In April 1994, PSEG requested the Ministry of Energy to undertake the negotiation of a contract with a view to developing a lignite-fired electric power plant in the Turkish Province of Konya. The development of an adjacent lignite mine that would supply the plant's fuel was also envisaged in the proposal. After some initial negotiations and revisions, the Ministry in November 1995 approved the Feasibility Study of the project prepared by PSEG.
20. The Feasibility Study considered a plant with a generating capacity of 425 MW gross and 375 MW net. The average annual price per kilowatt-hour was US$0.0498 cents,(1) the operational period 38 years, the annual availability factor 85.08% and the total investment US$804. 8 millions. The net capacity, the price and the availability factor are the key commercial terms and are set out in a “tariff” which establishes the terms and conditions for the provision of and payment for power on a yearly basis.
21. In March 1996, the Turkish Constitutional Court ruled that BOT power projects could not be subject to private law and had to follow the traditional model of concession contracts subject to the approval of the Turkish Council of State (the “Danistay”). Upon approval of the project by the State Planning Organization, the parties in August 1996 initialed an Implementation Contract(2) based on the same factors as the Feasibility Study. This contract was then submitted to the Danistay for review and approval in the form of a Concession Contract.(3)
22. A few weeks before the Implementation Contract was initialed, PSEG advised the Ministry that an additional site exploration had to be conducted before preparing the final Mine Plan, a step that could have an influence in the operation plan and coal production costs. Article 5.1 of the Implementation Contract allowed the Claimants to conduct additional studies concerning the mine site and, if necessary, to prepare a Revised Mine Plan; it also allowed for the submission of a revised energy tariff reflecting such cost increases.
23. The Implementation Contract also provided for a Long Term Energy Sales Agreement to be entered into by the Claimants and TEAS and for a Fund Agreement with the Electrical Energy Fund, as well as for the project to benefit from a Treasury guarantee under Article 11 of Law 3996.(4) Discussions on the Energy and Fund agreements made progress but ultimately were not finalized. The Treasury guarantee experienced other problems as will be mentioned below.
The Revised Mine Plan and the corporate structure
24. The Revised Mine Plan was submitted by the Claimants in December 1997, incorporating conditions for the mine that were different from those originally envisaged. As a result, it was estimated by the Claimants that a capital investment of US$361.6 million would have to be made in addition to the US$804.8 million investment envisaged in the Feasibility Study, thus totaling US$1.166 billion. Furthermore, the Revised Mine Plan called for an additional US$557 million that would be needed for the mine during the life of the Project and an additional US$20 million yearly operating and maintenance costs. It was also proposed that these increased costs could be met by increasing the generating capacity of the plant to 500 MW gross and 433.5 MW net with an average availability of 87%, the price per kilowatt hour remaining unchanged. Additional energy would have to be bought by TEAS under this proposal. The overall cost of the project would increase by approximately US$1 billion.
25. The negotiations between the parties that followed in 1998 were of an increasingly complex nature. Part of it was related to the implications of the Revised Mine Plan and part to the proposed corporate structure.
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29. Three proposals were submitted by the Claimant to take account of the changed costs in February 1998. These proposals ranged from 433 MW gross/375 MW net to 500 MW gross/433.5 MW net; from an average availability factor of 85% to 87%; and all had in common an increase in price from the original US$0.0498 cents to: US$0.0571 cents/Kwh, US$0.0523 cents/Kwh and US$0.0634 cents/Kwh, respectively.
30. The parties have different views about what was agreed in this respect. The Respondent is of the view that the proposals were rejected because they would increase the cost to the Turkish Government and consumer, but that it was prepared to accommodate the 500/433.5 MW alternative provided the price remained unchanged and that a limited liability company was established. The Respondent also submits that this was agreed at a meeting held on February 13, 1998. The Claimants have a different view, believing that no agreement was reached at this time and that the Ministry would continue to examine the various proposals and to consider the Revised Mine Plan.
31. The discussions continued at another meeting held on February 19, 1998, where it was agreed that a draft amended Contract would be submitted to the Danistay, including the changes agreed. Exactly what changes and amendments would be submitted remained unclear in the light of the continuing discussions about the Revised Mine Plan and the plant capacity and other associated elements. The Revised Mine Plan was later approved by the Turkish Coal Enterprise in May 1998.
The Concession Contract
32. The fact is, however, that the Danistay approved the Implementation Contract in the form of a Concession Contract on March 30, 1998. The economics of the project as envisaged in the Feasibility Study were not changed as no agreed amendment had been submitted. It follows that a plant capacity of 425 MW gross/375 MW net, on a 38-year term, an annual average availability factor of 85.08% and an average price of US$0.0498 cents/Kwh, were approved.
33. One of the amendments introduced by the Danistay concerned the revised tariff and its approval. Article 5.1 of the Implementation Contract had provided for the possibility of submitting a new tariff to the Ministry covering the increased fuel production costs. This resulted in the amended Article 8, paragraph 3, of the Contract, which provides:
“If necessary, the Company will prepare a revised mine plan based on such additional research and exploration conducted in the mine site prior to the construction start date. If such revised mine plan increases the Company's estimated fuel production cost, the Company shall submit to the Ministry a revised tariff reflecting such cost increase, which the Ministry shall approve or disapprove in no later than sixty days after the submission by the Company. In the event the Ministry withholds its approval for the revised tariff on the basis of reasonable grounds and if the Company abandons the project prior to the construction start date, the Company and the Ministry shall have no claims against the other.”
34. Additional meetings were allegedly held in May 1998, although the Respondent has explained that it has no official records of any such meetings and the officials allegedly participating do not recall attending such meetings. In the Claimants' version, at a meeting held on May 18, 1998 the Ministry orally accepted a proposal for a 500 MW gross/465 MW net plant capacity and an 87% availability factor so as to include the increased costs and the added tax burden resulting from the limited liability company corporate structure. Furthermore, a letter from the Claimant followed on the same date confirming the alleged understandings. The Respondent, however, does not believe that any such agreement was reached and that the letter remained unanswered as it was beyond the scope of the agreement allegedly reached in February. In any event, the Respondent argues, the Claimant itself believed that the May terms were only a proposal, as reflected in a letter of June 3, 1999.
35. Other crucial steps in the process of negotiation took place in June 1998, but again the views of the parties on such events are different. Following the approval of the Revised Mine Plan by the Turkish Coal Enterprise, the Ministry approved on June 19, 1998 the commercial terms of the project. The Respondent believes these are the terms agreed to in February 1998, that is, a plant capacity of 500 MW gross/433.5 MW net, the availability factor and the tariff remaining unchanged. The Claimant, for its part, submits that as a result of the May meetings and another meeting held on June 16, 1998, the Ministry through its approval of June 19, 1998 accepted the 500 MW/gross and 465 MW net plant capacity as the means to cover the increased costs, although admittedly no reference was made to the net factor. The Respondent further argues that the 465 MW net capacity was not feasible and that in any event the Ministry alone could not approve new commercial terms. It also does not agree with the Claimants that a meeting was held in this context.
36. After further exchanges of correspondence between the Claimant and the Ministry concerning the Danistay approval of the Contract and the Claimant's reservations in respect of arbitration and other issues, PSEG executed the Concession Contract as issued by the Danistay on December 10, 1998. A ground breaking ceremony took place on December 17, 1998. In February 1999 the Claimant issued a performance bond for US$8.848 millions and on March 8, 1999 the Ministry signed the Concession Contract.
37. Whether the Contract included a final agreement on key commercial terms and what those terms were has also been a matter of controversy. The Respondent is of the view that the Contract did not include a final agreement on essential commercial terms as the original cost estimates turned to be inaccurate and no amendments were submitted to the Danistay. A reference to 425 MW was made in the Ministry's transmittal letter of the executed Contract and later a reference to 500 MW gross/465 MW net was included in a draft Protocol that the parties discussed in connection with the amendments that could be submitted to the Danistay.
38. Each party argues that this Protocol was drafted by the other. In Respondent's view the reference to 465 MW net is a mistake that originated in the draft being prepared by the Claimant; conversely, the Claimant argues that this was drafted by the Respondent and therefore constitutes further evidence of the revised commercial terms having been agreed to and that in any event the alleged mistake, even if such, was never corrected. New meetings were held and correspondence exchanged in March and April 1999 concerning the terms of the Protocol and again the parties dispute whether the 465 MW figure was accepted or even discussed at this other stage.
The aftermath of the execution of the Contract
39. Various meetings that followed the execution of the Contract and the discussion of the draft amendment Protocol showed that the parties were entrenched in their views of the facts. The Ministry considered in particular that the final figures had been agreed to in February 1998 and that any increase in the net capacity above 433.5 MW would inevitably result in an unacceptable increase of the envisaged tariff of US$0.0498 cents. In addition, the Ministry's engineers believed that the increased tariff would not only cover the costs but would also result in a higher profit for the Company. The Claimants insisted that only by increasing the net capacity to 465 MW, as agreed in May 1998, could the tariff be kept at that level and at the same time offset the additional costs imposed by a limited liability company structure.
40. Additional proposals were made by the Claimants in June 1999 but none of them were acceptable to the Ministry if it resulted in a higher cost to the Government and, eventually, to the consumer. The alternative of a 545 MW gross/465 MW net was also considered at this stage. On February 10, 2000, the Claimants made what they considered their final offer: a 500 MW gross/433.5 MW net plant capacity with a higher availability factor for the first twelve years of the project, but this was not acceptable to the Ministry.
41. Several important steps were taken as from mid-1999 in respect of the corporate organization of the project and the governing legal framework. A Permission Certificate authorizing the Project Company to invest and do business in Turkey was issued on July 5, 1999. The Company was incorporated as Konya Ilgin Ltd. on August 19, 1999. Also in August 1999 the Turkish Constitution was amended to enable Parliament to authorize certain public services to be provided under private law contracts and to permit the Republic of Turkey to consent to international arbitration. Following the enactment of Law No. 4493 in December 1999, BOT contracts could be concluded as private law contracts.
42. Also with the enactment of Law No. 4501 on January 22, 2000, parties to existing concession contracts could convert these instruments to private law contracts or could agree to submit disputes to international or domestic arbitration. The Claimants applied to the Ministry within the deadline given to convert the Concession Contract to a private law contract or, alternatively, to amend the Contract agreeing to submission of disputes to international arbitration.
43. This application led to a new round of disagreements between the parties as to the commercial terms of the Contract. According to the Claimants, the Ministry demanded six changes in the Contract before forwarding the application to the Council of Ministers. In the view of the Claimants the Ministry was seeking to obtain financial concessions which it did not have authority to demand under the law.
44. On December 22, 2000, the Claimants indicated that they would demand reimbursement of the expenses made and payment for its losses. It appears that no further negotiations took place thereafter. The performance bond expired on February 23, 2001 and was not extended.
45. An additional amendment of the legal framework took place in March 2001 with the enactment of Law No. 4628 on the Electricity Market. The Claimants believe that Article 8 (1) of this Law, by eliminating the possibility of obtaining a Treasury guarantee, effectively terminated the Concession Contract as this was one of its essential components. The Respondent believes that the law had no impact on the project as the Claimant had ended the negotiations before its adoption.
46. A decision of the Turkish Constitutional Court of February 13, 2002 invalidated the provision of Law No. 4628 eliminating the rights of a company to the Treasury guarantee, because this was a right created by the concession contract and hence had to be protected under the contract, the rule of law and the Turkish Constitution. The Claimants believe that their right to this guarantee has thus been revived, but no governmental action was taken in this respect.
47. As noted, the Claimants introduced a request for arbitration before ICSID on March 22, 2002, thus beginning this proceeding.
The parties' explanation of the dispute
48. The parties also offer different explanations about the reasons for their disagreements and, ultimately, for submitting their dispute to arbitration. A number of the issues raised are connected more to the merits than to jurisdiction in this case, but it is necessary to keep them in sight in order to better understand the nature and extent of the jurisdictional objections made by the Respondent and the views of the Claimants thereon.
The Claimants' views
49. The Claimants have argued that the Respondent took action and engaged in deliberate inaction to destroy the Claimants' investment in the Republic of Turkey. After having authorized the investment and concluded a valid and binding Concession Contract, it is argued, the Respondent took steps to deprive the Claimants of the Treasury guarantee, the long-term power purchase agreement and the Fund Agreement that were essential to the success and feasibility of the project. In this context, the Claimants argue that various contractual undertakings were breached, in particular the revision of the tariff structure so as to accommodate increased costs. It is also claimed that other rights provided to investors by law were denied.
50. Given the fact that the project was organized along the lines of a BOT model, the actions and inactions were particularly detrimental to its feasibility. The Claimants explain that the significant level of investment required involves both equity and loan resources, including international debt financing, which is dependent on a tariff structure that is able to generate sufficient income to repay lenders, meet the operational expenses and offer sufficient returns on equity. Although regulations in force at the time provided that a BOT project's rate of return should be capped at 16%, most of the alternatives discussed with the Ministry ended up in lower figures that led, in the Claimants' view, to an inadequate and unreasonable rate of return.
51. In the Claimants' understanding these difficulties stemmed from the changing priorities of the Turkish Government and particularly from the pressure to reform the country's economy in the light of the negotiations for access to the European Community and World Bank policies. It is alleged that these policies were contrary to the BOT model as it was thought that the profitability of the project would be artificially ensured through government guarantees and other mechanisms, including a subsidized tariff structure resulting in uncompetitive generation costs. The Government was required to impose limits on the new projects included in the public investment program and to limit the issuance of new guarantees.
52. The end result was that the Government abandoned the large-scale BOT projects, with the exception of 29 small projects that did not include the Claimants' project. Treasury guarantees were effectively eliminated under the Electricity Market Law, noted above, and power purchase agreements could not exceed one year. These measures led to the effective termination of the project. Notwithstanding the fact that the Constitutional Court ruled that such restrictive provisions of the Electricity Market Law were unconstitutional, as explained above, no government action ensued to remedy the situation. Moreover, it is argued by the Claimants that both the Energy Sales Agreement and the Fund Agreement had been substantially completed with the technical bodies involved but the Ministry never extended the necessary authorization.
53. The Claimants also explain that all the major components of the project had been completed prior to financial closing. These components included the preparation of an Environmental Impact Assessment, the selection of the engineering, procurement and construction contractor, the conduct of hydrological studies, a mining license and operation permit for the mine, loan applications and appointment of financial agents, zoning changes and preparatory steps for the necessary expropriations.
The Respondent's views
54. The Respondent rejects all of the above explanations and believes that the dispute arises from the project never having moved off the drawing board or the negotiating table. Since the Claimants had dramatically underestimated the costs of the project in the Feasibility Study, it is argued, there simply was no agreement on the commercial terms. It follows in the Respondent's view that all the activities undertaken were merely preparatory to the investment and did not involve any legal expectation or right.
55. Before any Concession Contract was approved by the Danistay, the Claimants knew that the original commercial terms were unfeasible as they had changed dramatically in the light of the Revised Mine Plan. The Respondent believes that the Claimants have constantly sought to pass on to the Turkish Government and consumer the higher costs involved by selling more electricity, resulting in a burden to the public of US$2 billion. The Ministry repeatedly advised the Claimants that the original commercial framework was not feasible as neither were many additional proposals that differed substantially from the original. In particular it is asserted that the Ministry never agreed to and the Danistay never approved a 500 MW gross/465 MW net plant capacity.
56. Even after the Danistay approved the Concession Contract, both parties clearly understood that new commercial terms would have to be agreed to and submitted for the approval of this body. This was the reason for the many negotiations that took place and the draft amendment Protocol that was discussed after the approval of the Concession Contract.
57. In addition, the Respondent is of the view that the Claimants never completed the steps required to make an investment in Turkey. The initial framework setting was not followed up and as a result the Claimants did not obtain the necessary authorizations from the Treasury to proceed with the investment, did not obtain approval from the Turkish Coal Enterprises to mine certain needed reserves, never concluded the Energy Sales Agreement or the Plant Performance Report and never obtained a host of other permits nor took other steps required, including loan agreements, insurance, plant permission, construction license and others. The activities undertaken by the Claimants are all pre-investment steps and in a number of cases do not even fall in this category. The ground-breaking ceremony was merely symbolic.
58. As to the question of the Treasury guarantee, the Respondent explains that there was no obligation in this connection as the issuance of such guarantees is a discretionary power of the Treasury and there was no obligation to this effect under the Concession Contract. Neither did the restrictions introduced by the Electricity Market Law have any consequence for the project as the commercial terms had failed much earlier and the project had in fact been abandoned. In any event, it is argued, as the Constitutional Court held these restrictions unconstitutional, the Claimants could have pursued an agreement and applied for the guarantee at any time, but this was not done.
59. The Respondent also explains that the Ministry worked diligently at all times and that its responses to the various proposals were reasonable in the light of the need to protect the public interest. So was the requirement to organize the project company as a Turkish capital company as PSEG had obtained a windfall by changing the structure to a branch office of a foreign company. At all times the Ministry instructed the various public services involved to cooperate in the obtaining of permits, agreements and elements required for the beginning of the project, but the Claimants were remiss in their own action to this effect while they waited for more favorable legislation to be enacted.
60. The Respondent opposes in particular any connection with World Bank policies, as these were discussed much later than the date when disagreements emerged as a result of the increased costs of the Revised Mine Plan. Neither did the Ministry interfere with the Claimants' rights to obtain the benefits of a private law regime under Law No. 4501 as it only asked for the introduction of standard conditions required to improve all projects.
III. Respondent's jurisdictional objections
61. Based upon its views of the facts and the meaning of the dispute, the Respondent has made the following objections to jurisdiction:
a) There is no jurisdiction in this case because there is no investment or an investment dispute under the ICSID Convention or the Treaty.
b) Even if there was an investment, the Government of Turkey has not consented to jurisdiction.
c) The obligation under the Treaty to resort to any previously agreed dispute settlement procedure has not been met.
d) The North American Coal Corporation (NACC) and the Project Company do not have standing in this case.
62. The parties have raised as a preliminary point an aspect that the Tribunal wishes to dispose of at the very outset.
63. The Claimants have argued that the Tribunal needs only to be satisfied that if the facts alleged by Claimants are ultimately proven true, they would be capable of constituting a violation of the Treaty. The Claimants have invoked in support of this proposition the prima facie test applied in UPS v. Canada(5) and the assumption relied upon in Methanex v. United States(6) that, for purposes of jurisdiction, the Claimants' factual contentions are deemed correct. In the Respondent's view, however, when the jurisdictional challenge involves disputed questions of fact, as in this case, the Tribunal has the duty to consider the facts alleged by both parties and make its own findings of fact for deciding the jurisdictional aspects.
64. The Tribunal is aware that the prima facie test has been applied in a number of cases, including ICSID cases such as Maffezini(7) and CMS(8), and that as a general approach to jurisdictional decisions it is a reasonable one. However, this is a test that is always case-specific. If, as in the present case, the parties have views which are so different about the facts and the meaning of the dispute, it would not be appropriate for the Tribunal to rely only on the assumption that the facts as presented by the Claimants are correct.
65. The Tribunal necessarily has to examine the facts in a broader perspective, including the views expressed by the Respondent, so as to reach a jurisdictional determination, keeping of course separate the need to prove the facts as a matter pertaining to the merits. This is what the Tribunal will do.
A. Jurisdictional Objection concerning the existence of an investment
Respondent's arguments
66. The Respondent argues first that the Treaty protection extends only to the investments defined therein and as neither the proposed project nor the Concession Contract are an investment the Tribunal lacks jurisdiction. Article I (1) (c) of the BIT defines “investment” as follows:
‘Investment’ means every kind of investment in the territory of one Party owned or controlled, directly or indirectly, by nationals or companies of the other Party, including assets, equity, debt, claims and service and investment contracts; and includes
(i) tangible and intangible property, including rights, such as mortgages, liens and pledges;
(ii) a company or shares of stock or other interests in a company or interests in the assets thereof;
(iii) a claim to money or a claim to performance having economic value and associated with an investment;
(iv) intellectual and industrial property rights, including rights with respect to copyrights, patents, trademark, trade names, industrial designs, trade secrets and know-how, and goodwill;
(v) any right conferred by law or contract, and any licenses and permits pursuant to law; and
(vi) reinvestment of returns, and of principal and interest payments arising under loan agreements.
67. As noted above, the Respondent believes that the project never moved beyond the drawing board and the lengthy negotiations undertaken did not mature into an investment. As the parties never agreed to the essential commercial terms of the project, such as gross and net plant capacity, availability factor and purchase price, there was simply no “meeting of the minds”.(9) Even if there had been an agreement, the Respondent adds for the sake of argument, no amendments or revisions were submitted to the Danistay for approval, an essential step under Turkish law, nor were a number of other key agreements concluded, notably the Energy Sales Agreement.
68. The Respondent further argues that the situation in this case is analogous to that in Mihaly v. Sri Lanka,(10) where a number of preliminary expenditures and steps undertaken by the Claimant were ruled not to be an investment as no binding and effective concession contract was concluded by the parties. It alleges that there is no investment in this case either; there are only some expenditures on a project that never materialized.
69. The Respondent argues next that, while it is not disputed that the Concession Contract was approved by the Danistay and executed by the parties, this Contract does not constitute an investment because it did not contain the essential agreed commercial terms. In the best of circumstances there was a framework for an agreement to negotiate further. The parties knew this before the Contract was submitted to the Danistay and this explains why the Contract contains provisions for a revised mine plan and a revised tariff. However, it is explained, the Danistay provided the Ministry with broad discretion to withhold its approval of the revised tariff and did not fix the commercial terms to be negotiated.
70. In the Respondent's view nothing prevented the Claimants from implementing the Contract in the terms that it contained reflecting the early agreement of the Feasibility Study, but, before submission to the Danistay, the Claimants advised that the Contract was not feasible in those terms and that it had to be renegotiated. The amendments requested by the Claimants were ultimately not acceptable to the Respondent.
71. The end result is that the Contract, the Respondent asserts, is not a valid and binding agreement to which both parties have expressed their consent to be bound. The original terms were repudiated by the Claimants and there are no new terms agreed to. In addition, under Turkish law a contract is null and void if its subject matter is impossible to carry out, this being the case here from a technological and economic point of view unless entirely new terms were introduced. Neither was the Contract financially feasible without the financial incentives that the Claimants never obtained nor sought. Such situation of uncertainty made it impossible for any tribunal to fill the gaps concerning the essential commercial terms, which are thus clearly unenforceable.

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The Claimants' argument
74. In making their argument the Claimants rely on the accepted fact that the ICSID Convention deliberately omitted the definition of investment and left this definition to the parties.(13) Broad definitions were embodied in numerous treaties and agreements and a broad interpretation has also been upheld by ICSID tribunals, particularly Fedax(14) and CSOB.(15) The Treaty concerned in this case is no exception as the Parties thereto have agreed to a broad definition of investment. The Claimants assert that the Concession Contract clearly constitutes an investment which is listed in Article I (1)(c) to include service and investment contracts, claim to performance and intangible property.
75. The UNIDROIT Principles of International Commercial Contracts are invoked by the Claimants in support of their view that it is not always necessary to reach an agreement on all the essential terms of a contract as long as the parties have the intention of forming a contract (16) and the obligation to proceed to negotiate the pending terms in good faith. It is further invoked that civil law systems also allow the parties to leave open many terms of the contract to be determined later in good faith and that, particularly in long-term concession contracts, it is often the case that adjustment clauses will allow for change to basic terms in order to remain within the economic parameters of the contract. It is also stated that the validity of adjustment clauses and their enforceability have been upheld by arbitral tribunals.(17)
76. The Claimants also argue that the Contract is unequivocally a valid and binding legal agreement between the parties, as reflected in a precise legal language and the use of all the solemnities of a contract, all of it far from a mere statement of intention. In the Claimants' view there is no possible analogy with Mihaly, where no contract was signed and all preliminary documents of intention expressly contained disclaimers that no binding rights were being created. Moreover, the Concession Contract in the present case expresses its binding legal character and was executed by the parties, authorizing the completion of further contracts but not depending itself on these other contracts.
77. Expert opinions introduced by the Claimants also examine in detail the validity of contracts under Turkish law,(18) concluding in this respect that once a concession contract is approved by the Danistay and executed by the parties it constitutes a legally binding and valid instrument. It is also concluded that in this particular case the Contract includes more comprehensive terms than most contracts approved by the Danistay, even the essential commercial terms the Respondent argues to be missing. Adjustment clauses, such as Article 8 of the Contract, constitute an integral part of the agreement and are also binding under Turkish law. In any event, as explained in connection with the facts, the Claimants believe that an agreement on the new essential commercial terms was reached with the Ministry.
78. In the Claimants' argument the Project Company is in itself an investment that was duly incorporated under Turkish law and granted the necessary Permission Certificate to operate and do business in that country. In particular, it is further affirmed, all of its assets are investment in the meaning of the Treaty, including the Feasibility Study and the Revised Mine Plan as well as intangible property and industrial property rights, the Transfer of Mining Rights Agreement as both intangible property and licenses and permits, and the Environmental Impact Assessment Report and other permits and licenses. Even if it were correct to observe that the project does not constitute an investment, all the agreements, legal rights, licenses, authorizations, assets and property of the investor do qualify as investments under the Treaty.

The Tribunal's findings in respect of the existence of the investment

79. The Tribunal must first note that the facts alleged by the parties are not always consistent with the very views in support of which they are invoked. A number of contradictions can be noted in this respect. This is not surprising in a highly complex operation and negotiation that on many occasions were handled by technical staff not familiar with the legal language.
80. The essential point that the Tribunal must establish, however, is a legal one. Does the Concession Contract exist? The answer to this question is not difficult as the parties do not dispute the fact that the Concession Contract does exist, was duly signed, submitted to the Danistay and approved by this body and later executed with all the legal formalities and requirements. It is not disputed either that both parties unequivocally believed that the Contract had become effective on the date of the signing by the Ministry. The Contract is couched in proper legal language.
81. Numerous documents in the record evidence this understanding of the parties. Letters from the Ministry of March 11, 1999, April 9, 1999 and July 20, 1999, for example, refer to the Contract having become effective. This in itself is a substantive difference with the facts in Mihaly where, as explained above, the parties never signed a concession contract and expressly disclaimed any legal obligations arising from the preparatory work undertaken. The same is true of Zhinvaly where the parties expressly acknowledged that the Claimant did not have an investment.
82. The question that the Tribunal must answer next is a more difficult one. Is the Contract valid? Herein lies the fundamental dispute between the parties. The answer is related to the question of whether the Contract omitted essential terms and conditions that make it a nullity or a different kind of instrument.
83. The Tribunal must first note in this respect that the Contract did not ignore the essential commercial terms of the transaction as the terms originally agreed to in the Feasibility Study were incorporated in the Contract. Technical formulas to define the tariff structure and the price were thus included in Annex 2 of the Contract. To this extent there is not a blank or a vacuum in the Contract. Theoretically, on the basis of the Contract as signed and executed, the Claimants could still undertake the project on the commercial terms therein specified, which the Respondent has admitted was a possibility. The Claimants could also seek either to amend those terms, under both Articles 8 and 32 of the Contract or to ultimately abandon the project.
84. The parties to the Contract knew before its submission to the Danistay in draft form that costs would increase as a result of the Revised Mine Plan.(19) This Revision entailed significant changes to the earlier economic estimates and to the work envisaged in the mine site. Letters pointing to the need for accommodation and tariff restructuring were abundant. This is precisely why the Implementation Contract included a rebalancing mechanism in Article 5.1, which later led to Article 8 of the Concession Contract. This is also why the Claimants repeatedly made reservations of their rights under the Implementation Contract and stated that amendments included in the draft submitted to the Danistay did not constitute a waiver of such rights.
85. The fact that economically the project might be difficult to execute or even become unfeasible does not render the Contract invalid. Neither does the fact that the project could become impossible to perform. As Professor Güran stated in his Legal Opinion, “…economic hardship does not constitute a valid excuse to escape a party's contractual obligations, whether under the doctrine of impossibility of performance or any other principle of Turkish law”.(20) Professor Günday offered a similar opinion. He said that “…economic hardship is not recognized as impossibility as that concept is understood by Turkish law”.(21)
86. Moreover, the repudiation that the Claimants have allegedly made of the original terms stems from its economic and financial feasibility. It does not alter the legal validity of the Contract, particularly since both parties foresaw that there would be a need for an economic adjustment as a result of the Revised Mine Plan and other issues intervening in the negotiation. The need for an economic adjustment informs Article 8 of the Contract. Article 8 of the Contract allows the Claimants to seek an economic rebalancing of the Contract terms in case of significant change in that balance.
87. An additional consideration arises because the Contract contains a mechanism for renegotiating the commercial terms and the tariff as a result of the Revised Mine Plan. Again, this does not affect the validity of the Contract; it only means that the terms therein defined can be reopened in the light of certain events.
88. This is not an unusual feature in contracts dealing with highly complex concessions of services of long duration or other types of long-term transactions. Faced with the possibility of renegotiation of certain contract terms, the parties' intent is dispositive of the question whether the Contract nevertheless came into existence. In the present case, both the language of the Contract as well as the circumstances, as they are reviewed below, demonstrate an intent by the Parties to be bound in spite of the fact that certain terms still needed to be agreed upon at a later date.
89. The Tribunal also notes that several experts on Turkish administrative law have opined that the Concession Contract is binding on the Turkish State and meets all the conditions to become effective under Turkish administrative law.
90. The conclusions reached by the Tribunal on the existence and the validity of the Contract would suffice to affirm jurisdiction on this point. The issue whether the parties undertook the required negotiations on the amendment and rebalancing of the commercial terms of the Contract in good faith and its eventual legal consequences pertains to the merits.
91. The Tribunal cannot ignore, however, the related question whether the commercial terms were actually agreed as this question is also of the essence of the dispute between the parties. The documentary evidence offered by the parties in support of their respective arguments is not generally conclusive on this matter. Whether the terms were agreed to in February 1998, as the Respondent believes, or in May and June 1998, as the Claimants believe, and what those terms were, is not sufficiently documented. In fact, there are indications pointing both ways and again many contradictions. The same is true of the statements of fact witnesses.
92. The Respondent argues in particular that the Claimants in a letter of June 3, 1999,(22) characterized as a proposal what they now argue was an agreement referred to in an earlier letter of May 18, 1998,(23) thus acknowledging that an agreement was never reached. While grammatically that may be so, the Tribunal cannot draw from this fact a legal conclusion since it is perfectly possible that the Claimants were referring to the proposal on the basis of which the alleged agreement of May 18, 1998 was reached. The ongoing submission of cash flow tables and tariff alternatives up to the year 2000 suggests, however, that no firm agreement was in place but that it was being explored and negotiated.
93. The Respondent has also invoked minutes of the Claimants concerning, for example, meetings held on May 14, July 19, September 21 and October 13, 1999, suggesting that a number of issues were not considered sufficiently clarified, agreed to or settled. The Respondent also argued that the Claimants stated clearly that the project could not move forward without an agreement on the tariff, as reflected in minutes of meetings held on December 16, 1999, January 27, March 3 and April 10, 2000.
94. The Claimants have also bolstered their arguments with documentary evidence. The letters sent by the Claimants to the Ministry on May 18 and June 23, 1998 make specific reference to agreements on amendments discussed at meetings, as does the draft Protocol that was prepared but not actually sent to the Danistay. Furthermore, various notes of meetings appear to corroborate the Claimants' view that an agreement was in fact reached. On this question, Claimants refer to notes of meetings held on May 15 and 18 and June 16, 1998, filed late in the proceedings. The Claimants also refer to documents allegedly evidencing that the Respondent's view that a different agreement was reached is not tenable. Some documents do indeed point to the specific figures of 500 MW gross/465 MGW net or to the 500 MW alone.(24)
95. Considering the conclusion on jurisdiction which the Tribunal reached on the basis of the intent of the Parties, there is no need at this stage for the Tribunal to elaborate on the fact that some of these documents were indeed filed very late in the proceedings. This may be a matter to be considered during the second phase of the arbitration.
96. There are, however, other documents which the Tribunal believes are particularly important in establishing the intent of the parties to conclude and be bound by the Contract. The most fundamental of these is evidently the Contract itself. There are many provisions in the Contract which evidence the intent of the parties to be bound. The main one is Article 8 which specifically allows for a rebalancing of the Contract where a Revised Mine Plan introduces substantial changes in the economics of the Contract, such as in the present case. The wording of Article 8 is very clear. The pertinent terms of this Article, reproduced above, are clearly indicative of the central role played by the economic rebalancing which is envisaged.
97. While much has been discussed about whether the 60-day period the Ministry had to approve or disapprove the Article 8 amendments on reasonable grounds entails a mandatory action, or the opposite conclusion that if no action is taken it simply means the rejection of the amendments under Turkish law, this does not alter the fact that the Claimants could avail themselves of this mechanism and indeed did so in order to seek to rebalance the Contract. The long negotiations between the parties with respect to a new tariff so indicates and the very terms of the draft Protocol discussed by the parties also show that commercial elements were being debated pursuant to the mechanism set out in Article 8 of the Contract.
98. In turn, this mechanism is related to Article 15 of the Contract which refers to a number of agreements or protocols to be concluded by the Company. The fact that this was seen as an obligation is clearly expressed by the use of the term “shall”. This very obligation also assumes that the Respondent's institutions will concur in these agreements which will supplement the Contract.
99. Article 35 of the Contract is also significant in this context. This Article provides that the Contract shall be effective on the date of execution upon review by the Danistay, all of which happened in fact. It provides next for the Company to complete other related steps concerning, in particular, financing, executing the Contracts envisaged in Article 15, obtaining required authorizations and permits and obtaining the final approval of projects by the Ministry. Paragraph 2 of Article 35 begins with the expression “However”. This word does not condition the effectiveness of the Contract under paragraph 1 because termination only arises in case of “default” of the Company. Otherwise the Contract remains in force and is effective.
100. The Danistay Decision of 11 March 1998 approving the Contract refers to the fulfillment of a number of additional transactions by the Company as “an obligation arising from the contract”, thus indicating that the obligations would be in effect as soon as the Contract was approved and executed. Clearly, these obligations were to be fulfilled once the Contract had become effective.
101. Although, as noted, the witness statements are contradictory, it is well established that there were meetings held by the Company officials with the Ministry's representatives in charge of negotiations, in particular Mr. Basli. The correspondence that followed these meetings indicates clearly that discussions were progressing on the commercial terms, including the plant capacity. Although witnesses for the Respondent have stated that they were not aware of any such meetings, that no official records were prepared and that, at the most, these should be considered simply as visits, the fact is that a certain number of meetings were held.
102. The Tribunal need not find during this phase of the arbitration whether or not the parties reached agreement on any amendment to some of the commercial terms of the Contract. However, in weighing the totality of the evidence submitted by the parties, the Tribunal does find that amendments to the Contract terms were pursued. This finding further confirms the existence, validity and binding nature of the Contract.
103. In reaching its conclusion on this matter the Tribunal is also persuaded by the argument that if the parties did not intend to bind themselves by means of a Contract, why would they then have signed, submitted for approval and executed a Contract? Letters of intention or other instruments would have sufficed to provide a general framework to continue negotiations until an agreement was reached or not without any legal consequence for either party, as the events in Mihaly show. The view of the Respondent that the Contract was signed as a mere courtesy or sign of good will is not tenable, nor is the view that this is nothing but a framework devoid of legal significance.
104. A contract is a contract. The Concession Contract exists, is valid and is legally binding. This conclusion is sufficient to establish that the Tribunal has jurisdiction on the basis of an investment having been made in the form of a Concession Contract. A different question, again pertaining to the merits, is whether all or some of the activities undertaken qualify as a part of the investment or are to be regarded as merely preparatory. The same holds true of whether the assets of the Project Company constitute an investment.
105. The objection to the Tribunal's jurisdiction on this count is therefore dismissed.

[...]

1 All references to currencies made in this Decision are to dollars of the United States of America.
2 Hereinafter the “Implementation Contract”.
3 Hereinafter the “Concession Contract” or the “Contract”.
4 Hereinafter the “Treasury guarantee”.
5 United Parcel Service of America v. Government of Canada, available at http://www.state.gov/s/l/c3749.htm
6 Methanex Corp. v. United States of America, available at http://www.state.gov/s/l/c5818.htm
7 Emilio Agustín Maffezini v. Kingdom of Spain (ICSID Case No. ARB/97/7), Decision on Request for Provisional Measures of October 28, 1999 and Decision on Objections to Jurisdiction of January 25, 2000, 16 ICSID Rev.—FILJ 212 (2001); Award of the Tribunal of November 13, 2000; 16 ICSID Rev.—FILJ 248 (2001). Rectification of the Award of January 31, 2001; 16 ICSID Rev.—FILJ 279 (2001).
8 CMS Gas Transmission Company v. Argentine Republic (ICSID Case No. ARB/01/8), Decision on Jurisdiction of July 17, 2003, 42 ILM 788 (2003).
9 Legal Opinion of Professor Dr. Ergun Özsunay. September 10, 2003, at 14.
10 Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka (ICSID Case No. ARB/00/2), Award of March 15, 2002, 17 ICSID Rev.—FILJ 142 (2002).
11 Mihaly cit.
12 Zhinvali Development Ltd. v. Republic of Georgia (ICSID Case No. ARB/00/1), Award of January 24, 2003, unpublished but introduced in the arbitration record.
13 Expert Opinion of Prof. Dr. Dr. Rudolf Dolzer, June 27, 2003, at 2-5.
14 Fedax N.V. v. Republic of Venezuela (ICSID Case No. ARB/96/3), Decision on Objections to Jurisdiction of July 11, 1997, 37 ILM 1378 (1998); Award of March 9, 1998, 37 ILM 1391 (1998).
15 Ceskoslovenska obchodni banka, a.s. v. Slovak Republic (ICSID Case No. ARB/97/4), Decision on Objections to Jurisdiction (May 24, 1999), available at http://www.worldbank.org/icsid/cases/csob_decision.pdf; Decision of the Tribunal on the Further and Partial Objection to Jurisdiction of December 1, 2000, 15 ICSID Rev.—FILJ 530 (2000).
16 UNIDROIT Principles of International Commercial Contracts, 1994, Article 2.14.
17 Aminoil Award, 21 ILM 976, (1982).
18 Rejoinder Opinion of Prof. Dr. Metin Günday, November 24, 2003, par. 13; Legal Opinion of Prof. Dr. Sait Güran, November 24, 2003, par. 6.
19 Witness Statement of Halil L. Sunar, June 27, 2003, par. 59.
20 Legal Opinion of Prof. Dr. Sait Güran, November 24, 2003, par. 23.
21 Rejoinder Opinion of Prof. Dr. Metin Günday, November 24, 2003, par. 26.
22 Sunar to Ministry, June 3, 1999.
23 Sunar to Ministry, May 18, 1998.
24 Ministry to TEAS, 30 June 1998; Letter by Technical staff to Ministry, 19 June, 1998.
25 CSOB cit., par. 72.
26 Holiday Inns S.A. and others v. Morocco (ICSID Case No. ARB/72/1), Yes, Lalive's article, p. 84.
27 Lanco International, Inc. v. Argentine Republic (ICSID Case No. ARB/97/6), Decision of the Tribunal of December 8, 1998 (English text), 40 ILM 457 (2001).
28 SGS Société Générale de Surveillance S.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13), Decision on Objections to Jurisdiction of August 6, 2003; 18 ICSID Rev.—FILJ 301 (2003).
29 Law Concerning the Encouragement of Foreign Capital, No. 6224 Jan 18, 1954.
30 Decree No. 95/6990, June 7, 1995.
31 Communiqué No. 95/2, August 24, 1995.
32 Permission Certificate No. 6014, 5 July 1999, replacing certificate No. 4492 of 5 May 1997.
33 Christoph H. Schreuer: The ICSID Convention. A Commentary, 2001, at 342.
34 Hearing, February 22, 2004, at 37-57.
35 ICSID, History of the Convention, Vol. II, at 567.
36 Report of the Executive Directors on the Convention, 1 ICSID Reports 29.
37 Legal Opinion of Professor W. Michael Reisman, June 27, 2003, at 25; Expert Opinion of Prof. Dr. Dr. Rudolf Dolzer, June 27, 2003, par. 39; Schreuer, at 342.
38 CSOB cit., par. 65.
39 Permanent Court of International Justice, Eastern Greenland case, 1933, PCIJ, Ser. A/B, No. 53, at 52.
40 International Court of Justice, Nuclear Tests case, ICJ Reports 1974, at 253.
41 Patrick Daillier et Alain Pellet: Droit International Public, 2002, 359-366.
42 See, for example, the Agreement between the Government of Australia and the Government of the People's Republic of China, 11 July 1988, Article XII, 2, b; Agreement between the Government of Lithuania and the Government of the People's Republic of China, 8 November 1993, Article 8, 2, b; Agreement between the People's Republic of China and the Government of the Republic of Korea, 30 September 1992, Article 9.10. The text of the notification of the People's Republic of China is found in www.Worldbank.org/icsid/pubs/icsid-8-d.htm
43 Compañia de Aguas del Aconquija S.A. v. Argentine Republic (ICSID Case No. ARB/97/3), Award of November 21, 2000, 16 ICSID Rev.—FILJ 641 (2001).
44 Compañía de Aguas del Aconquija S.A. and Vivendi Universal v. Argentine Republic (Case No. ARB/97/3), Decision on Application for Annulment of July 3, 2002, 41 ILM 1135 (2002).
45 Salini Construttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco (ICSID Case No. ARB/00/4), Decision of July 23, 2001, [French original] 129 Journal du droit international 196 (2002); English translation in 42 ILM 609 (2003).
46 SGS v. Pakistan cit.
47 Ronald S. Lauder v. Czech Republic, UNCITRAL Final Award (Sept. 3, 2001).
48 Alex Genin and others v. Republic of Estonia (ICSID Case No. ARB/99/2), Award of the Tribunal (June 25, 2001); Decision on Claimants' Request for Supplementary Decisions and Rectification (April 4, 2002), available at: http://www.worldbank.org/icsid/cases/conclude.htm
49 Aguas cit.
50 CMS cit.
51 Azurix Corp. v. Argentine Republic (ICSID Case No. ARB/01/12), Decision on Jurisdiction of December 8, 2003, International Law in Brief available at: http://www.asil.org/ilib/azurix.pdf.
52 Vivendi annulment cit.
53 Wena Hotels Ltd. v. Egypt (ICSID Case No. ARB/98/4), Decision on Application for Annulment rendered on February 5, 2002, 41 ILM 933 (2002).
54 CMS cit., par. 80; Azurix cit., par. 89.
55 Vivendi Annulment cit., par. 98.
56 Vivendi Annulment cit., par. 101.
57 SGS v. Pakistan cit., par. 162.
58 Expert Opinion of David W. Rivkin, June 27, 2003.
59 Mondev International Ltd. v. United States of America (ICSID Case No. ARB(AF)/99/2), Award of October 11, 2002, 42 ILM 85 (2003).
60 Trade Registry Gazette, No. 4861, 27 August 1999.
61 Additional Expert Opinion, Professor Dr. Dr. Rudolf Dolzer, November 24, 2003, at 11.
62 CMS cit.
63 Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic (ICSID Case No. ARB/01/3), Decision on Jurisdiction of January 14, 2004, International Law in Brief, available at: http://www.asil.org/ilib/Enron.pdf}}

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