'VIII. The Parties' Respective Positions

During this arbitration the Parties' positions have evolved, sometimes significantly. To some extent the shifts represent a maturation of perspectives not unusual during a year-long exchange of arguments. On certain issues, however, the progression of positions derives from changes in Respondents' representation, yielding a changing landscape of new issues and fresh responses.

To appreciate the changing landscape of positions, the Tribunal sets forth below the Parties' initial claims and defenses, followed by a description of their ultimate positions. Since Messrs. [A] and [B] often spoke interchangeably for both [Respondent 1] and [Respondent 3], the ultimate perspectives of these two Respondents will be presented together. As noted in Part I, one Respondent ([Respondent 2]) has had two sets of lawyers ([C] and [D]) and two different receivers ([E] and [F]). The other two Respondents ([Respondent 1] and [Respondent 2]) were allegedly represented by [C] for a short time, followed by nine months without effective participate [sic], ultimately agreeing to participate in the arbitration through Messrs. [A and B] only at the time of the hearings.

A. Original Positions

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2. Respondents [1] and [2]

Before [lawyers C] were dismissed . . . the position of the above two Respondents (assuming that [C] did indeed act for [Respondent 1] and [Respondent 3]) was that the Tribunal lacked jurisdiction on the grounds that (i) [Asian State X] recognizes a construction contract for performance in [State X] only if drawn up in the [State X] language and duly registered with the relevant authorities; (ii) [State X] law required [Claimant] to obtain licenses to carry out construction work in [city in State X]; and (iii) [Respondent 1] directed [Claimant] to contract only with [Respondent 3].

These two Respondents did not at that time file any counterclaims, but asserted the right to present counterclaims at a later moment. The Arbitral Tribunal took no position with respect to whether further claims or counterclaims of any party would be authorized under Article 19 of the ICC Rules. As indicated below, however, the Tribunal cannot accept that a general reservation of the right to present claims and/or counterclaims at some future date constitutes a valid counterclaim for the purposes of Article 19 of the ICC Rules. Were this so, Article 19 would become a dead letter. Parties would routinely make blanket reservations for future claims and counterclaims, thus defeating the goal of allowing all parties to address their adversaries' claims with a reasonable degree of specificity.

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XV. Respondents Requests and Counterclaims

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B. [Respondents 1 and 3]

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2. Additional Hearings

With respect to the work done pursuant to the Letters of Intent, the Tribunal notes that [Respondent 1] and [Respondent 3] seem to have been completely satisfied. During the hearings, Mr. [A], speaking for [Respondent 1] and [Respondent 3], stated as follows,

"It must be said that the work that these gentlemen [the [Claimant] engineers] did on behalf of [Claimant] is fantastic. It is better than fantastic. These are the finest, without question, the finest utility plants that have been built in [State X]. I know that because they have been independently evaluated by the Central Government in [capital city of State X]." (Transcript . . .)

Again Mr. [A] stressed the same theme:

"So I am not going to make a lot out of whether in fact [Claimant] performed under these letters of intent, because, as I said Mr. [G] and Mr. [H] are absolutely amazing builders of utility plants. I do not think that anyone could say that you could do a better job in any country. I do not believe you could have carried out these works to this quality in this time even in a western country like England or America." (Transcript . . .)

Thus the Tribunal must also deny the requests by [Respondent 1] and [Respondent 3] for additional hearings and additional time to consider their counterclaims. See submissions from [A] dated . . . and from [B] dated . . . These requests relate to work under a prior contract and to the validity of Letters of Intent. Neither of these matters was included in the Terms of Reference.

Article 19 of the ICC Arbitration Rules is explicit about new claims and counterclaims:

"After the Terms of Reference have been signed, no party shall make new claims or counterclaims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the Arbitral Tribunal, which shall consider the nature of such new claims or counterclaims, the stage of the arbitration and other relevant circumstances."

No good reason has been offered to deviate from this rule. [Respondent 1] and [Respondent 3] had every opportunity to participate in drafting the Terms of Reference, but declined to do so. All Respondents have already been given ample opportunity to present their case, and any additional delay could constitute a denial of Claimant's right to a fair arbitration.

The Tribunal has bent over backward to accommodate [Respondent 1] and [Respondent 3]. All notices and procedural orders were copied to both parties via fax, DHL and registered mail. At the hearings Messrs. [A and B] admitted to having received these communications. In addition to refusing to participate in drafting the Terms of Reference, both Respondents declined to submit pre-hearing briefs or to cooperate in pre-trial discovery.

These two Respondents' [sic] request new hearings and more time for counterclaims communicated to the Tribunal only at the hearings and in the post-hearing briefs. See [Respondent 1]'s "resubmitted" briefs on . . . and [Respondent 3]'s submission of . . .

To permit Respondents to ignore proceedings and then ask for more hearings would be grossly unfair to the other parties. The ICC Rules and English arbitration law are both premised on fairness to all parties. The most elementary notions of due process require that arbitrators show respect for the rights of both sides in a dispute. A respondent cannot ignore an arbitration until the last moment, and then expect to be permitted to file new counterclaims that require the other side to begin again almost at ground zero.

Section 33 of the 1996 English Arbitration Act imposes on the arbitrators a duty to "act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent." (Emphasis added). Both companies had the opportunity to submit powers of attorney and state claims during the ten months before the hearings. It would be grossly unfair to Claimant to permit Respondents to re-open matters at such a late date, without any justification except the "oversight" given by Mr. [A] and Mr. [B] as the reason for non-participation in most of the proceedings. See Transcript . . .

The Tribunal also rejects any attempt to circumvent Article 19 of the ICC Rules with a general "reservation" of rights to bring unspecified additional counterclaims such as the one made by [lawyers C]'s initial pleading which for good order was recited in the Terms of Reference. No reason whatsoever has been suggested to allow new counterclaims to be added at such a late date.

If parties to an arbitration could routinely make blanket reservations for any and all future claims and counterclaims, the purpose of Article 19 would be defeated. Neither the parties nor the arbitrators would know until the last minute whether the real claims were being addressed. One side would be able to deny the other a timely opportunity to consider its claims.

For good order, the Tribunal notes that it takes no position on Respondents' interpretation of the English Civil Procedure Rules ("CPR") (see [Respondent 3]'s submission of . . .), which govern court proceedings in England and Wales, not arbitration. Since the Letters of Intent provide for arbitration in London under the ICC Rules, the relevant English procedural framework is the 1996 Arbitration Act, which as previously discussed gives no support to the proposition that a respondent may ignore an arbitration without excuse and then seek further delay by having the proceedings begun again.'