'260. The Claimants understandably put considerable emphasis on a presentation made by the [respondent's minister] on the occasion of a business conference . . . [He] explained that [the respondent state] welcomed foreign investment immediately, and distributed some written materials describing the potential for gas development. In particular, [the minister] stated that six pipeline export feasibility studies had been completed, and provided a graph entitled "[the respondent state]'s importance as a potential major gas supplier is unquestionable". The Claimants seek to hold the Ministry to these contentions, arguing that it should not be acceptable for the Ministry one moment to state to the international business community that the outlook for its gas industry is bright, and the next, when seeking to defeat the claims of a particular investor which it has wronged, to insist that they are bleak.

261. Ms [A, an energy consultant] was able to show the Tribunal that [the minister]'s projections were substantially consistent with her own. She produced a representation of [the minister]'s figures . . . and moreover referred to a "strategy and draft program" announced by the President of [the respondent state] on . . . (the very week before she testified) projecting exports of 85 bcm/yr by 2005, and 120 bcm/yr by 2010 . . .

262. The problem with Ms [A]'s presentation is that it was immediately apparent that these [respondent state] forecasts were wrong, at least in respect of their time scale. At the very base of the projections there was a constant band of 20 bcm/yr exports to [state X] starting in 1999, when it is a fact that (1) exports to [state X] were halted in May 1999, and (2) the volumes of some 8 bcm actually delivered were not paid for.

263. If current reality is not in accord with these projections, particularly in the context of a decade of payment difficulties and suspension of deliveries, it goes without saying that their vision of the future must be taken with some reserve, notwithstanding their source.

264. Having regard to [the minister]'s standing, his projections must be given due weight. Moreover, as the Claimants pointed out, it must be assumed that a responsible Minister would not have spoken as he did at an important international conference without having some basis for his statements. It was also submitted that an inference against the Ministry can and should be drawn from its refusal and failure to produce documents in its possession relating to actual or potential markets for [respondent state] gas. These are powerful arguments, perhaps the most cogent of those deployed by the Claimants on this part of the case. Nonetheless, the inferences which may be drawn, even if strong, are not presumptive: they must be weighed against the factual evidence to which the Tribunal has already referred. So weighed, they do not in the Tribunal's view suffice to discharge the burden of proof which rests on the Claimants, on this part of the case. Their relevance in other contexts remains to be considered.

. . . . . . . . .

377. It is not in dispute that the [respondent state] government has in its possession documents relevant to its potential export markets, including, but not limited to, the feasibility studies referred to by [the minister]. The Claimants called for disclosure of those documents. This was refused by the Defendant on the grounds that they were sensitive and confidential, and involved the interests of third parties who would not consent to disclosure. . . . [T]he failure to produce the documents must tell against the Defendant, as the party bearing the burden of proof. The Tribunal is entitled to draw the inference that the undisclosed documents would tend to support the Minister's forecasts rather than Dr [B]'s.

378. The Tribunal is also entitled to draw inferences adverse to the Defendant from its failure to call as a witness either [the minister] or any other state official. [Counsel for the respondent] submitted that it was not possible for the Minister to testify because of his busy schedule and "his concerns about the confidentiality of his information" . . . That explanation is no doubt true, but it is not adequate to overcome the inference that the Minister's evidence would have been unhelpful to the Defendant. It would not have been impossible for the Minister or one of his deputies to have given an explanation of the official forecast, if an explanation existed, even if certain confidential matters were to be withheld. Nor would the Tribunal have had the power to compel any witness to answer questions on matters of confidentiality. On the drawing of adverse inferences from the failure to call a witness, see Cross on Evidence, 7th ed. p. 37.

379. On the general issue of the export market for [respondent state] gas over the next 20 years the Defendant has therefore in the view of the Tribunal failed to discharge the burden of proof. The Tribunal points out that in its Interim Award on the issue of frustration (where the burden of proof was likewise on the Defendant) having considered the evidence of Ms [A] and Dr [B], it found that the Defendant had not discharged the burden of proof. It is apposite to quote the following passages from paragraphs 513 and 514 of the Interim Award:

513. . . . The Defendant, as the party asserting that the [agreement] has been frustrated, has the burden of proof. In the light of the contrary evidence of Ms [A] and of the statements by the [respondent state] Government itself, Dr [B]'s evidence is insufficient to discharge this burden. However optimistic Dr [B] may think it, the statement of the President of the country cannot be simply disregarded. The Defendant in this case is the Minister of Oil and Gas Industry and Mineral Resources of [respondent state]. It must have been open to the Defendant to bring witnesses with direct knowledge of [respondent state]'s gas pipeline and gas export projects and negotiations. It must also have had access to Government studies and other documents on these subjects. . . .

514. The Arbitral Tribunal considers that it was for the Defendant to elucidate these matters. It is possible, by reason of the failure to adduce such evidence, to draw the inference that such evidence would have been unhelpful to the Defendant. See Cross on Evidence, 7th Edition page 37. But, whether or not such an inference is drawn, in the absence of such evidence the Arbitral Tribunal does not find it possible to uphold the Defendant's contention that the facts and circumstances "have combined to completely undermine the capacity of the Joint Venture to make hard currency profits at any point in the foreseeable future".

That passage is consistent with the Tribunal's present evaluation. Although fuller evidence was heard on the economic issues in the damages hearing than in the earlier hearing, the Defendant has again been unable to satisfy the Tribunal on the general market issue when it assumed the onus of proof.'