The parties, two construction companies based in Europe (the claimant in State A and the respondent in State B), entered into a joint venture agreement for the purpose of preparing a tender for a construction project in the Middle East. At the same time, the parties also entered into an agreement relating to cooperation over an unlimited period in a number of Middle Eastern countries. The parties were awarded the construction project and subsequently entered into various maintenance contracts relating to the resulting building. A court case was brought against the parties in connection with the construction and maintenance of the building. The parties entered into a number of contracts relating to the action to be taken in that case. The claimant initiated arbitration proceedings, arguing that the respondent had violated its obligation to cooperate with it. The joint venture agreement contained an arbitration clause in which the arbitrators were empowered to act as amiable compositeurs.

'5. Amiable Composition

5.1 On page 72 of its Additional Statement of Defence . . ., the Respondent, in a more subordinate line of defence, requested the Tribunal to reopen the case if it were to find that it would be able to and should act as amiable compositeurs . This issue was dealt with in the correspondence mentioned in par. 1.11 above. The issue has also been - briefly - discussed at the hearing . . .

5.2 Par. 5.2. of the Terms of Reference reads as follows: "Within the scope and the validity of the relevant arbitration clause or clauses contained in the Agreements of the Parties the Arbitral Tribunal shall decide as 'amiable compositeurs' . The Arbitrators confirm that they accept their mission."

5.3 In par. 6.1. of the Interim Award, the Tribunal has decided as follows: "The next issue is what law does apply to the merits of this dispute. [Claimant] has argued that [State A] law should apply while [Respondent] has argued that [State B] law should apply. The answer to the issue is not of paramount importance since the arbitration clause gives the arbitrators the power to act as 'amiables compositeurs' with the consequence that the Arbitral Tribunal does not have the obligation to decide the case according to the rules of law."

5.4 On the other hand, the Tribunal, in par. 6.2. of the interim award, also found that [State A] law is applicable, which was further confirmed in par. 13.2 thereof. These findings which have been made after long deliberations between the parties in connection with issue b of the Terms of Reference, are not contradictory. [State A] Law governs the contractual relationship between the parties. When requested to act as "amiable compositeurs" , the arbitrators must take into account the equities of the case, in order to reach a decision which is "equitable". In doing so, they may take into consideration - in whole or in part - or not take into consideration, the applicable law (subject only to application of its rules of public policy).

5.5 Since the issue of the applicable law - and consequently of the application of amiable composition - has been fully decided in the first stage of this arbitration, it may not be revisited in this second stage, according to the principle res judicata . . . However, since the matter was lengthily argued by the parties in the last stage of this procedure, the Arbitral Tribunal would like to stress that, even if the res judicata principle would not apply, the decision to the amiable composition issue would not have been different. After having reconsidered all the arguments submitted by the parties in the second stage of the arbitration, the Arbitral Tribunal is convinced that its decision in the first phase of the arbitration was correct and fully justified by the evidence and the procedural approach taken by the parties.

5.6 In the first place, the Tribunal wishes to remind the parties that at no time during the first stage of these proceedings, either before or after the approval of the Terms of Reference, any of the parties ever challenged the concept that the Tribunal should act as amiables compositeurs . To the contrary, in 17, p.13 of its first submission - its Defence to the Request for Arbitration . . ., Respondent stated: "Without prejudice to the Defendant's contention on the jurisdiction of the ICC, the Defendant objects to the Claimant's assertion that the applicable law would be the law of [State A]. It is the Defendant's case that this is incorrect on the basis that if the Arbitration Clause on which the Claimant relies in the Second Joint Venture Agreement . . . is upheld, the Clause expressly refers to the arbitrators acting as amiables compositeurs . Therefore, the arbitrators would be bound to decide the case according to the principles of equity and their conscience (sic) rather than the law of any particular State."

5.7 It follows from this that, from the very beginning of this arbitration, it has been the position of Respondent that the Tribunal should decide the case in amiable composition and that this concept should form the basis of its authority.

5.8 Even after the Interim Award was issued, Respondent did not argue in its Statement of Defence . . . that the Tribunal could not decide the case in amiable composition. The reason why Respondent disputed the jurisdiction of the Arbitral Tribunal since the beginning, was only the fact that in its view, there was no valid arbitration agreement applying to this litigation. The Respondent did not specifically object to the section of the Terms of Reference providing that the Arbitral Tribunal would decide in amiable composition and these Terms have been validly approved by the ICC Court of Arbitration.

5.9 The Arbitral Tribunal would also like to point out to the fact that the amendment to the [State A] Judicial Code relating to arbitration . . . abolishing the rule . . . which prohibited the parties to decide in favour of amiable composition before the dispute had arisen, entered into force with immediate effect, in accordance with general principles of [State A] law . . .

5.10 The Arbitral Tribunal therefore confirms its conclusion that the parties have undoubtedly agreed to the application of amiable composition by the Tribunal, both in their joint venture agreement and in the first stage of this arbitration. But in any case, the clause providing for the application of amiable composition is fully valid and the Arbitral Tribunal had to apply it.

. . . . . . . . .

7. Damages (issue j)

7.1. The Arbitral Tribunal will first decide issue j before discussing issue i.

7.2. The Arbitral Tribunal has decided in its Interim Award that Respondent should compensate Claimant for all the damages it has suffered as a result of [Respondent]'s breach of its contractual obligations to [Claimant] by entering into a joint venture with [X] and subsequently tendering for the Maintenance Contracts III and IV, without allowing [Claimant] to renew its cooperation with [Respondent] . . .

7.3. Claimant argues that article 2 of the Joint Venture Agreement provides that the participation of the parties shall be as follows : "[Y] : 50%; [Respondent] : 50%". It therefore concludes that Claimant is entitled to 50% of all the joint venture's net profits, thus including all profits relating to the third and fourth stages of the maintenance. Claimant further alleges that under [State A] law, a party to a contract is entitled to full compensation for the whole loss he/she has sustained or the whole profit of which he/she has been deprived following the breach of contract by the other party. In its additional and final statement, Claimant claims payment of . . . It bases its calculation on a report established by [financial company] at its request. This report concludes that the net profit generated by stages III and IV of the maintenance of the [construction project] can be valued at . . ., half of which has to be allocated to each venturer . . . This net profit represents 22,17% of the turnover, a percentage which is almost identical to the percentage of profit for the stages I and II (29,96%).

7.4. According to Claimant, the causal link between Respondent's fault and Claimant's damage is clear: the damage suffered by Claimant would indeed have never existed if Respondent had carried out the third and fourth stages with Claimant and therefore if Respondent had shared by half with Claimant the net profits derived from these two stages.

7.5. On the other hand, Respondent disputes the existence of a causal link between its breach of contract and the damage suffered by Claimant. Respondent also alleges that there is a lack of causation or at least that causation is not proved. In this regard, Respondent maintains that, even if Claimant and Respondent would have discussed the tender for maintenance before such tender, it is still uncertain whether the parties would have jointly tendered, in the light of the new strategy of the [Z] group. Furthermore, had the parties jointly tendered, it is not at all certain that they would have been awarded the contracts for the maintenance of stages III and IV. In particular, Respondent alleges that the absence of Mr [A] would have made it impossible for Claimant to successfully tender for and execute the contracts. It also refers to the harsh competition in [State C]], which would have made it very difficult to obtain the Maintenance contracts. Besides, the new contracts were of a different nature than the previous Maintenance contracts, mainly due to the inclusion of a central monitoring system. Furthermore, Respondent argues that Claimant was itself at fault or at least was contributarily negligent in that it would have known or should have known since 1986 the existence of the further Maintenance contracts.

7.6. Concerning the calculation of damages, Respondent argues that Claimant has at the most lost a chance and that no proof has been supplied that this chance was real and serious. Respondent therefore considers that the alleged damage suffered by Claimant can be repaired by the allocation, at the very most, of a symbolic amount of a maximum of . . ., it being understood that 9/10 of this amount has to be left for the account of Claimant as contributory negligence.

7.7. More subsidiarily, Respondent refers to the report of [financial company] and considers that it does not take into account several issues, in particular that the net profit of the joint venture does not equal the net profit which would have been obtained by the joint venture if it had obtained any contract at all; that the calculation of the profit margins performed by [financial company] does not take as a starting point the total turnover, but only part of it and that consequently, the profit margins thus calculated are higher than the actual ones: according to Respondent, the profit for the third and fourth Maintenance contracts amounts to 27,20% instead of 29,17%; that the net profit should have been calculated at the individual partner level and should also have taken into consideration the advantages obtained by Claimant, namely the possibility to use its limited resources on other projects; finally, that the profits of the maintenance monitoring center should have been deducted, as well as the price for insurance premiums.

7.8. The Arbitral Tribunal has carefully analysed the parties' allegations on these various issues. It has come to the conclusion that Claimant is entitled to 50% of the net profits generated by the performance of the maintenance contracts for stages III and IV. This is indeed the damage which has been suffered by Claimant as a direct and certain consequence of Respondent's breach of contract. As was decided in the first award, Respondent has entered into a joint venture with [X] for the sole purpose of bidding for these further Maintenance contracts. At that time, Mr [A] was still under the employment of Claimant. [Respondent] did all it could to conceal from Claimant its involvement in these further Maintenance contracts. The joint venture [X] / [Respondent] successfully tendered for the Maintenance contracts III and IV which - although they include additional work such as the central monitoring system - bear a sufficient extent of resemblance to the Maintenance contracts I and II to be considered as falling within the scope of the joint venture agreement . . . As was decided in the first award, Respondent is clearly in breach of its obligations under the joint venture agreement. The Arbitral Tribunal further considers that, had the joint venture between the parties submitted a bid for the further Maintenance contracts, they would have obtained them. They knew the decision makers in [State C]] and were well known to them. They were on site and knew the [building] from inside better than its . . . owners. And indeed, the efforts made by [Respondent] to hide by all possible means the changes at the partnership level were so carefully performed that the [State C] authorities were convinced that the further Maintenance contracts had been awarded to the joint venture between [Claimant] and [Respondent]. Despite the harsh competition in [State C], the new joint venture apparently was successful in obtaining the two Maintenance contracts and there is therefore no reason to believe that the former joint venture might have been less successful. In this respect, the Arbitral Tribunal has also rejected the argument that because of an apparent change of strategy, Claimant would not have been interested in acquiring new contracts in [State C]. [State C] had proven to be a very profitable market and in any case, most of the work was subcontracted. As Mr [B] explained convincingly, there was no reason why Claimant would have renounced to the profitable Maintenance contracts for stages III and IV, especially since the whole structure for performing that maintenance work was already existing on site and had proved that it was working well. And finally, as was already pointed out above, the Arbitral Tribunal considers that Respondent's argument that Claimant was contributory negligent is ill-founded. Since it was Respondent who did not comply with its contractual obligations and did hide and shield this breach from Claimant, Respondent cannot claim that Claimant was negligent because it did not detect the breach of contract.

7.9. In conclusion, the Arbitral Tribunal considers that, had Respondent fulfilled its obligation to inform Claimant of the new Maintenance contracts, Claimant would have accepted that the first joint venture bid for these contracts and it further considers that the contracts would have been undoubtedly awarded to that joint venture. Claimant would have then received its share of the net profits generated by the two contracts and this is precisely this share of the profits which should be awarded to Claimant as damages.

7.10. In this respect, the Arbitral Tribunal has based its analysis of the amount of damages on the [financial company] computation . . . of the net profits of stages III and IV . . . The Arbitral Tribunal has found this report convincing and conclusive. Obviously, the Arbitral Tribunal was not able to examine the book-keeping of the joint venture in detail. But that book-keeping was done by Respondent which therefore totally masters its contents and would therefore have been able to demonstrate and prove that the calculation and profit allocation made by [financial company] was not correct. In this respect, neither the memo of Mr [C] nor the memos of [D] are convincing. They do not deal with the issue of determination and allocation of the income but try to make an unjustified amalgamation with Respondent's overhead and other general costs.

7.11. Therefore, the Arbitral Tribunal considers that the evaluation of the profit has to be based on the amount of . . . and has to be divided by half between the partners . . . This profit share takes into consideration all direct and indirect identifiable costs and other expenses as well as the identifiable contribution of the partners. Those costs were reinvoiced to the joint venture, as was demonstrated and confirmed by both accounting expert opinions.

7.12. The Arbitral Tribunal has however reached the conclusion on the other hand that the profit amount determined by [financial company] should be reduced, taking into consideration Respondent's remarks concerning the calculation of the net profits but also the scope of the works performed by Respondent and the advantages which Claimant has enjoyed by not having to allocate its limited resources to the works performed by Respondent, as well as the fact that Claimant was not required to take out additional insurance cover.

7.13. Concerning the scope of stages III and IV, Respondent is right when it stresses that the obligation which has been violated did only relate to the . . . project and not the other [buildings]. Therefore, the fact that the later maintenance contracts also concerned other [buildings] has to be taken into consideration in the evaluation of the amount of net profit for the calculation of damages. The [financial company] report however duly considers this fact and in the absence of any convincing element to the contrary, the Arbitral Tribunal is satisfied with its findings.

7.14. On the other hand - also in relation to the scope of the maintenance contracts - it is true that stages III and IV included, beyond the usual maintenance work, the setting up of a Monitoring Center. The Arbitral tribunal considers that this element should be taken into consideration in the final determination of the profit to be allocated to Claimant, but only to a limited extent. Mr [B] clearly explained that the work to be done in this respect was nothing really new and had already been done by Claimant before . . . The tasks involved did not constitute a new and independent development but were nothing more than a normal evolution of the maintenance work under an ongoing contractual relationship.

7.15. In the submissions and during the pleadings, there have been long discussions between the parties on the issue whether other costs might have been linked to the joint venture and have not been reflected in its accounts, in particular general overhead costs. In this respect, the Arbitral Tribunal is convinced that the impact of the general management of both partners beyond identifiable and already reinvoiced specific contributions or costs has been limited in relation to the maintenance. The general overhead costs referred to by Respondent do not relate to the . . . project. They are linked to general management functions. Even if to a certain extent the joint venture may have also benefited from that general management support of both partners, this benefit was certainly limited since the site and contract management was necessarily done in [State C] by the local team. The maintenance contracts were performed in the middle of the eighties. At that time, the means of telecommunication were far from being developed as they are today. There were neither internet nor emails, telecopiers were just appearing and telex was the only means of speedy transmission. Therefore, the involvement of the general management of both partners in the actual, daily, performance of the maintenance contracts was necessarily minimal and probably did not go beyond the quarterly visits paid by Mr [E] and [A]. The Arbitral Tribunal points out in this respect that Respondent, which did the accounting of the maintenance contracts and kept its files has not proven the contrary. Rather, it has limited its argumentation to general, unspecific, contentions on general overhead expenses.

7.16. Therefore, taking into consideration the [financial company] computation and the corrections which the Tribunal finds necessary to make on the basis set forth in 7.12 above (and its further clarifications in 7.13 to 7.15), the Arbitral Tribunal finds equitable to allocate to Claimant an amount of damages of . . .

7.17. Concerning interest, Claimant claims that the damages should be increased by interest to be calculated on the basis of the relevant [State A] legal interest rate; that these interests should normally be calculated pro rata as from the dates of each payment to Respondent by the [State C] authorities for the performance of the Maintenance contracts as from September 15, 1981 until September 15, 1987. However, Respondent has always refused to provide Claimant and the Arbitral Tribunal with the relevant information and documents with respect to the said dates of payment. Consequently, Claimant claims interest on the basis of "average dates", as follows :

- regarding the amounts owed by Respondent to Claimant in respect of the third stage of the maintenance . . . : as from September 15, 1982 to the date of the arbitral award, plus legal interest from the date of said award to the date of full payment and

- regarding the amounts owed by Respondent to Claimant in respect of the fourth stage of the maintenance . . . : as from September 15, 1985 to the date of the arbitral award, plus legal interest from the date of the award to the date of full payment by Respondent.

7.18. Respondent disputes these allegations. It considers that under [State A] law, interest for damages based on contractual liability only start to run as from the moment that the creditor has summoned the debtor to pay. According to Respondent, there was no summons before the filing of the request for arbitration . . . Respondent further alleges that it does not have to pay any interest on the amount of costs. It also alleges that compensatory interests are not necessarily equivalent to the rate of delay interest: the interest rate should therefore be determined by the Arbitral Tribunal. And finally, it contends that by filing its request for arbitration in 1998 only, it failed to mitigate its damage.

7.19. Taking all these elements into consideration and the fact that Respondent has done all it could to conceal its involvement to Claimant with the consequence that Claimant only became aware of it late 1995, at which time it started to gather the necessary information to start the procedure, the Arbitral Tribunal decides in equity that the damages awarded to Claimant will bear interest at the [State A] statutory rate of interest ("intérêts judiciaries") from September 15, 1982 on an amount of . . . and from September 15, 1985 on the amount of . . ., until the date of full payment. 8. Winding-up of the joint venture (issue i)

8.1. Claimant alleges that a partner to an "association momentanée" may always request its winding-up (dissolution) and as a consequence its liquidation, following a breach by the other party of its duties. Such a liquidation only requires the drafting of liquidation accounts between the partners to the said "association momentanée". These accounts are to be agreed between the partners or to be set out by the relevant judge or arbitrator. Accordingly, in the present case, the winding-up of the joint venture has to be declared due to the gross breach by Respondent of the joint venture agreement. Such a winding-up implies as a consequence the liquidation of the joint venture taking into account all future financial consequences of any pending disputes including the . . . cases.

8.2. Claimant points out that since the beginning of the joint venture, the profits and costs have been shared by half between Claimant and Respondent. In February 1997, Respondent has suggested to Claimant to close the last joint account. Since then, all the costs have been systematically invoiced and/or paid directly, each by half, by Respondent and Claimant. There seems therefore that there are no longer pending costs and profits to be shared between the parties in the liquidation process with the exception of:

- the net profits relating to stages III and IV of the Maintenance contracts, which is precisely the main issue to be decided by this Arbitral Tribunal;

- and all future net profits and future costs to be related to the joint venture agreement, including all costs that either Claimant and/or Respondent might be ordered to pay in the . . . cases, but excluding any costs relating to the stages III and IV of the maintenance. Since these disputes are still pending and might still be pending for years, Claimant requests the Arbitral Tribunal to order that all these future net profits and future costs in connection with the joint venture shall be borne each by half by Claimant and Respondent.

8.3. Respondent alleges in the first place that it is impossible for an "association momentanée" to be liquidated as liquidation only occurs with respect to legal entities and that moreover, the winding-up of the joint venture because of the so-called "fault" of Respondent is no longer possible, as the object of the joint venture has been realised a long time ago. Therefore, Respondent requests the Tribunal to declare that the joint venture has been wound up by virtue of law at the time its object has been realised. Finally, Respondent requests the Arbitral Tribunal to order that half of the burden of whatever cost or liability, including claims for damages by third parties, arising out of or in connection with the Maintenance contracts concluded by the joint ventures Claimant/ Respondent/ and Respondent/[X] should be borne by Claimant, if Claimant succeeds anyway.

8.4. The Arbitral Tribunal considers that the joint venture has not yet come to an end. It decides on the one hand the winding-up of the joint venture between Respondent and Claimant on the basis of Respondent's substantial breach of the Joint Venture Agreement and enjoins Claimant and Respondent to continue to share by half all future costs (including damages, legal costs, fees, etc.) whatsoever in connection with the joint venture, including but not limited to all costs pursuant to any judicial decision rendered by any judicial or arbitral court against Claimant and/or Respondent in the . . . cases, but excluding any costs relating to stages III and IV of the maintenance agreement.

9. Costs (issue k)

9.1. Claimant requests the Arbitral Tribunal to order Respondent to reimburse Claimant all its costs and disbursements incurred as a result of the arbitral proceedings, including Claimant's attorney fees. In its letter dated . . ., Counsel for Claimant has communicated to the Arbitral Tribunal that Claimant has incurred as legal costs in connection with this arbitration, an amount of . . .

9.2. Respondent refers to an alleged general principle of [State A] law according to which attorney fees are not recoverable. Respondent also alleges that liability under [State A] law is strictly limited to the compensation of sustained and established damages.

9.3. As was correctly pointed out by Claimant, the general principle established by the [State A] Supreme Court that attorney fees are not recoverable by plaintiff from defendant does not apply to ICC international arbitral proceedings. The parties have agreed to refer to the ICC Rules whose article 31(1) provides that the costs of arbitration include reasonable legal and other costs incurred by the parties for the arbitration. Pursuant to article 31(2) of the ICC Rules, arbitrators decide which of the parties shall bear these costs. The validity of those provisions has, to the Arbitral Tribunal's knowledge, never been disputed, even in [State A].

9.4. Considering the outcome of this arbitration, the Arbitral Tribunal decides that Respondent must bear all the costs of this arbitration fixed by the ICC Court at . . . It must therefore reimburse Claimant the advance on costs it has paid to the ICC . . . The Arbitral Tribunal also orders Respondent to pay Claimant the legal costs it has incurred in connection with this arbitration, i.e. . . ., which the Arbitral Tribunal finds reasonable.

Now therefore the Tribunal, acting as amiable compositeurs, decides as follows:

1. Respondent is ordered to pay to Claimant the equivalent in Euros on the day of payment of . . ., plus interest at the [State A] legal rate on . . . from September 15, 1982 until September 14, 1985 and on . . . from September 15, 1985 until the date of full payment.

2. The Arbitral Tribunal decides and orders the winding-up of the joint venture between Respondent and Claimant on the basis of Respondent's substantial breach of the Joint Venture Agreement and orders Claimant and Respondent to continue to share by half all future costs (including damages, legal costs, fees, etc.) whatsoever in connection with the joint venture, including but not limited to all costs pursuant to any judicial decision rendered by any judicial or arbitral court against Claimant and/or Respondent in the . . . cases, but excluding any costs relating to stages III and IV of the maintenance agreement.

3. Respondent is ordered to reimburse to Claimant the advance on costs it has paid to the ICC . . . as well as the legal expenses it has incurred in connection with this arbitration . . .

4. All further claims are denied.'