'Prescription

163. Having retained jurisdiction, the Arbitral Tribunal is able to decide whether the Respondent's counterclaim is time-barred.

164. In this regard, the Parties are in agreement that the period of limitation is of 3 years pursuant to [relevant legislation]. The Parties contention relate to the dies a quo of the 3-years period. [The relevant legislation] determines when the limitation starts running. The considerations below to determine whether the counterclaims are time-barred must have as their departing point or dies a quo the termination of the Contract communicated by the Respondent. The termination must be considered here as a fact whose legality does not have to be examined in the present award.

165. The Arbitral Tribunal considers that the Respondent's behaviour after the Notice of Termination should be taken into account. From the Notice of Termination, the Respondent has not shown any intention to submit a claim against the Claimant for any damages allegedly caused by the Claimant. It is only once that the Claimant started the arbitration proceedings that the Respondent decided to file a counterclaim. Thus, the Arbitral Tribunal has pondered on whether the Respondent would have submitted a claim if the Claimant had not started arbitration proceedings. Indeed, Respondent's inaction until the start of these proceedings leads the Tribunal to believe that it would not have done so.

166. In spite of the above, the truth is that the Respondent has brought a counterclaim and that the decision of this Tribunal cannot be solely founded on the behaviour of the Respondent and the hypothesis mentioned in the previous paragraph. The Arbitral Tribunal has to reach its decision also pursuant to the provisions of the Contract and the provisions of [the applicable law].

167. The Arbitral Tribunal considers that the Respondent's right to claim did not arise when the replacement works contract was signed, but much before. The Respondent alleges that before that moment it could not know whether there could be a damage that would entitle the Respondent to compensation, and consequently such right was under a suspensive condition. The Arbitral Tribunal does not share this view. Indeed, the Tribunal considers that the prescription period started to run after the Notice of Termination took effect. Pursuant to Sub-Clause 15.4 of the Contract:

After a notice of termination under Sub-Clause 15.2 [Termination by Employer] has taken effect, the Employer may:

(a) proceed in accordance with Sub-Clause 2.5 [Employer's Claims],

(b) withhold further payments to the Contractor until the costs of design, execution, completion and remedying of any defects, damages for delay in completion (if any), and all other costs incurred by the Employer have been established, and/or

(c) recover from the Contractor any losses and damages incurred by the Employer and any extra costs of completing the Works, after allowing for any sum due to the Contractor under Sub-Clause 15.3 [Valuation at Date of Termination]. After recovering any such losses, damages and extra costs, the Employer shall pay any balance to the Contractor.

168. It is then clear that the right of the Respondent arose when the Notice of Termination took effect that is on September 5, 2006. Therefore, from that day on the Respondent's right was born. The Tribunal has to dismiss the Respondent's argument that it could not claim before knowing whether the replacement works contract would be of a higher value. In the view of the Tribunal, besides the clear wording of Sub-Clause 15.4, if the Respondent terminated the Contract because it considered that the Claimant delayed its performance, it had to consider that it had suffered a damage, even if it did not know the exact amount of it. If in the worst case the concerned party cannot determine the exact amount just before the end of the prescription period, it has always the recourse to interrupt the prescription period by the means of [the relevant legislation]. In this case, the Respondent did not interrupt the prescription even after the signature of the replacement works contract (when pursuant to the Respondent, its right arose), but waited until the start of the arbitration.

169. Therefore, the Arbitral Tribunal considers that the dies a quo of the Respondent's counterclaim is September 6, 2006. Consequently, taking into account that the Respondent's counterclaim was served with Respondent's letter of December 2, 2009, the 3-year term provided for in [the relevant legislation] had already elapsed when the Respondent submitted its counterclaim, so the Arbitral Tribunal declares the Respondent's counterclaims as time-barred.

The jurisdiction of the Arbitral Tribunal to hear and decide the Claimant's claim

………

182. The Arbitral Tribunal first stresses the Claimant's insistence in pursuing its claim though a DAB first and through arbitration, thereafter. However, the sole behaviour of a party does not authorize, again, to accept or dismiss any prescription allegation.

183. The Tribunal considers that the prescription period shall start to run when the Notice of Termination took effect. Indeed, any right to compensation in favour of the Claimant was constituted at the expiry of such period, because during those 14 days the Contract was fully in force. Even if asked by one of the members of the Tribunal during the hearing, the Parties reached the conclusion that the Notice of Termination cannot be revoked unilaterally by the terminating party during the period between the communication of the Notice of Termination and its entry into effect, both parties acknowledged that it could have been revoked through an agreement of the Parties. Then the Parties could have reached an agreement to continue with the performance of the Contract.

184. In addition, it is important to note that the GC grants importance to the moment when a notice of termination takes effect. These are some examples in which the Contract provides for consequences after the effective date of termination:

• Sub-Clause 15.3: "As soon as practicable after a notice of termination under Sub-Clause 15.2 [...] has taken effect [...]"

• Sub-Clause 15.4: "After a notice of termination under Sub-Clause 15.2 [...] has taken effect [...]"

• Sub-Clause 16.3: "After a notice of termination under Sub-clause 15.5 [...] has taken effect [...]"

• Sub-Clause 16.4: "After a notice of termination under Sub-Clause 16.2 [...] has taken effect [...]"

185. With regard to the Claimant's claims that, in the Respondent's opinion, arose before the termination of the Contract, the Arbitral Tribunal would like to quote [a decision] of the Commercial Court of the Supreme Court of Justice submitted by the Claimant …:

According to the legal provisions, in the sector of constructions the contractual relationships are performed by successive services and shall terminate only after the final taking over of works, the taking over document being the final discharge (discovery) between the parties. …

186. The Arbitral Tribunal considers the reasoning of this decision to be applicable mutatis mutandis to the present case. Since there is no taking over document, indicating the finalization of the works, the reference moment that has to be considered in the present case is the Notice of Termination, plus the period of 14 days, because it is from that date that the services of the Claimant are terminated.

187. Further, it has to be considered that in all legal systems around the world the principle of good faith is the cornerstone of the legal order. This principle applies not only with respect to the right to start an action, but also to the allegation of an exception. Thus, the party that alleges an exception, such as the statute of limitation, must have acted in good faith, even more in cases in which extrajudicial claims do not interrupt prescription. In the present case, the Claimant has pursued its claims from the very beginning after termination, irrespective of whether the method used (i.e. the DAB) was correct or not. Further, the Arbitral Tribunal, in spite of the considerations set forth below regarding the constitution of the Board, understands that the GC and the PC added by the parties are a complex framework and a reasonable person could have believed that, before bringing an arbitration, the dispute had to be resolved through a dispute adjudication board. Indeed, following termination, the Claimant wrote to the Respondent on September 1, 2006 regarding its intent to challenge the Notice of Termination and invited the Respondent to request the President of FIDIC to appoint one person as a DAB. The Respondent did not answer such letter nor any other attempts made by the Claimant on September 5, 2006 and September 14, 2006. Thus, the Claimant requested the President of the FIDIC to appoint a DAB, which was finally appointed in late 2006. The Respondent did not participate in the DAB proceedings until July 31, 2008, when it wrote [to] the President of the FIDIC disputing the validity of the appointment of the DAB. A respondent acting in good faith would have answered the Claimant earlier in time informing that it understood that the disputes had to be resolved directly by recourse to arbitration, instead of allowing time to pass by not freeing the counterparty of its error (or at least letting him know the possibility that he is in error), even more in a legal system in which extrajudicial claims do not interrupt the statute of limitations. Otherwise, the respondents would be encouraged to try to delay the beginning of judicial or arbitration proceedings and to delay alternative mandatory procedures, such as DABs, to be able to invoke the statutes of limitation exception later in a judicial or arbitral proceedings. Indeed, bad faith does not necessarily imply an active behaviour against another party, but a passive behaviour and silence can also constitute bad faith. Taking this into consideration, and also the fact that the Respondent did not raise the exception of the statute of limitation for some claims that, pursuant to the Respondent's argument, should have been time-barred when the Respondent issued the Notices of Dissatisfaction, the Arbitral Tribunal considers that the Respondent cannot now raise the statutes of limitations exception with regard to any of the Claimant's claims.

188. In light of the above, the Arbitral Tribunal decides that the Claimant's claims are not time-barred.

8. The decisions of the DAB

189. The Claimant seeks the execution of the two decisions rendered by the DAB and a declaration that the DAB was properly constituted and the decisions are binding.

190. The Respondent contends that the DAB was not constituted properly, and consequently its decisions are not binding.

8.1. Summary of Respondent's allegations

191. The Respondent affirms that the appointment of the DAB was in breach of the contract and in failure to observe the applicable … legal principles of interpretation of the contracts.

192. The Respondent argues that the DAB was appointed in breach of amended Sub-Clause 20.2 PC, whose wording institutes a "full term" DAB appointed from the very beginning of the contract period. This Clause reads as follows:

Disputes shall be adjudicated by a DAB in accordance with Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision].

The DAB shall comprise one member who shall be appointed at the joint request of the parties by the President of FIDIC or by a person appointed by the President. Such nomination shall be deemed to be accepted by both the Employer [Respondent] and the Contractor [Claimant].

The parties shall enter into the Dispute Adjudication Board Agreement (in the form enclosed in Schedules) with the member appointed following the above procedure within 42 days after the Commencement Date.

193. The Respondent also claims that the principle of severability does not apply to a DAB procedure, and therefore, once the contract is terminated, it is not possible to appoint a DAB, so Sub-Clause 20.2 PC was no longer in force.

194. The Respondent also contends that Sub-Clause 20.2 PC provided that the DAB Agreement had to be entered into within 42 days after the Commencement Date. In the Respondent's view, the mentioned term is an extinctive term, whose expiry leads to the extinction of the right to appoint the DAB, and consequently Sub-Clause 20.8 GC becomes applicable. Said Clause reads as follows:

If a dispute arises between the Parties in connection with or arising of [sic], the Contract or the execution of the Works and there is no DAB in place, whether by reason of the expiry of the DAB's appointment or otherwise:

(a) Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision] and Sub­Clause 20.5 [Amicable Settlement] shall not apply; and

(b) the dispute may be referred directly to arbitration under Sub-Clause 20.6 [Arbitration]

195. The Respondent further alleges that Sub-Clause 20.3 GC is neither applicable, because this clause is set forth for the situation in which the member of the DAB shall be appointed by the agreement of the parties. But, in this case, the parties waived ab initio in Clause 20.2 PC the possibility to agree on the person appointed as DAB sole member because they assigned such role to the President of FIDIC or the person appointed by him, then the situation is not the same as the situation envisaged in Sub-Clause 20.3 GC, which must then not apply. Further, since, in the present case, neither party requested such a nomination to the President of FIDIC in the 42-days extinctive term (nor did either party request such a nomination throughout the contract period, until termination) the right of any party to request the President of FIDIC the appointment of the DAB [sic] expired.

196. Consequently, the Respondent concludes that since the DAB was nominated without observing the parties' intention and the contractual provisions, its decisions are not legal and, therefore, are also not binding.

197. With regard to the Claimant's claim concerning the enforcement of the DAB decisions, the Respondent contends that they are time-barred because the underlying right is also time-barred as already mentioned. Moreover, the Respondent alleges that the DAB decisions which are binding and not final may not be summarily enforced under the provisions of the Contract. The Respondent submits that pursuant to Sub-Clause 20.4 GC, the DAB decisions are binding for the Parties, but create a contractual obligation, and the failure to comply shall be deemed as a contractual breach. Thus, if a Notice of Dissatisfaction is not issued, the dispute shall be referred to arbitration to enforce the decision. However, in the present case Notices of Dissatisfaction were issued, and the Respondent states that the Claimant cannot request in arbitration that the decision be enforced on the basis of Sub-Clauses 20.6 (already quoted) and 20.7 GC, which reads as follows:

In the event that:

a) neither Party has given notice of dissatisfaction within the period stated in Sub­ Clause 20.4 [Obtaining Dispute Adjudication Board 's Decision]

b) the DABs related decision (if any) has become final and binding, and

c) a Party fails to comply with this decision

then the other Party may, without prejudice to any other rights it may have, refer the failure itself to arbitration under Sub-Clause 20.6 [Arbitration]. Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply to this reference.

198. Then, as to the merits of the case, the Respondent states that they shall be settled by the Final Award of the Tribunal, following the entire proofs produced for each count of the Parties, as mentioned in Sub-Clause 20.6 GC. Consequently, once the Notice of Dissatisfaction is issued, the Arbitral Tribunal may only render a decision on the merits of the case, and the DAB's decision may at most be regarded as a means of evidence.

199. The Respondent further alleges that the partial award requested by the Claimant would decide on the claim in a final way, meaning that the Arbitral Tribunal, once the partial award is rendered, has no possibility to reverse it and to decide otherwise by a Final Award.

200. Moreover, the Respondent asserts that, since the DAB decisions were not final, the decisions whose enforcement is sought are not enforceable pursuant to Sub-Clause 20.7 GC. Further, and among other arguments, the Respondent asserts that rendering a partial award would breach the right to a fair trial under Article 6 of the European Convention for Human Rights or [local constitutional law], because it is absolutely necessary for the Arbitral Tribunal to render an award on the merits, taking into account all the defences and claims of the parties resulting from the file which must be analysed altogether and not by successive partial awards. Therefore, it is the Respondent's view that a partial award aiming to enforce the DAB decisions would violate public policy.

201. In addition, the Respondent argues that the enforcement of the DAB decision would create a significant prejudice to the state budget, apart from the argument that a partial award, such as the one requested, does not meet the requirements of the guidance of the ICC Commission on International Arbitration on the making of interim and partial awards: (i) there are no clear circumstances in favour of a partial award, (ii) the presumption of a single award should prevail, (iii) there is no suggestion of irreparable loss on the Claimant's part which requires an immediate Partial Award, (iv) there is no urgency, (v) the making of a partial award would be inefficient. Even more, the Respondent states that the [applicable] procedural rules do not allow the Arbitral Tribunal to render an award without an analysis on the merits of the case which would enable both parties to have the opportunity to fully present their case, evidence and defences.

202. Consequently, the Respondent's position is that the DAB was established without observing the contractual provisions and against the real intention of the parties, so the DAB member had no jurisdiction to solve the dispute and its decisions are neither valid nor binding.

8.2. Summary of Claimant's allegations

203. The Claimant contends that the appointment of the DAB was validly made and that its decisions are lawful and binding.

204. The Claimant alleges that the Respondent did not answer the Claimant's letter … inviting the Respondent to jointly request the President of FIDIC to appoint one person as a DAB member. Thus, a DAB was appointed pursuant to Sub-Clause 20.3 GC, which empowers the President of FIDIC to make an appointment final and conclusive of the DAB. The Claimant contends that this clause applies because it refers specifically to any failure to have the DAB appointed under Sub-Clause 20.2 PC, including by reason of a failure of the Parties to agree jointly to request the President of FIDIC to appoint a DAB member.

205. In addition, the Claimant objects to the Respondent's allegation that the 42-day term is an extinctive term. Pursuant to the Claimant, that term anticipates that the DAB member will already have been appointed by joint request of the parties prior to that time, however, there is no section in Sub-Clause 20.2 PC for any failure to make that appointment or to enter into an agreement between the parties in this regard. Thus, Sub­Clause 20.3 GC becomes applicable. Further, the functionality of Sub-Clause 20.3 GC is reinforced by the Appendix to the Tender, which prevails over both the PC and the GC, and which states that the President of FIDIC or the person appointed by the President shall be the appointing official for the purposes of Sub-Clause 20.3 GC. In any case, it is the Claimant's position that the 42-day term should be construed as a suspensive term with respect to Sub-Clause 20.3 GC. Further, the Claimant contends that, although Sub-Clause 20.2 GC was amended to provide for a full term DAB, none of the other DAB provisions of the Contract were amended to reflect this.

206. In relation to Sub-Clause 20.8 GC, the Claimant affirms that this clause is not applicable, since the Parties never intended to exclude the DAB procedure either pre­contract or post-contract signature, in a way that would allow the parties to proceed directly to arbitration in respect of any dispute in the event that a DAB was not appointed within 42 days after the Commencement Date. The Claimant points out that if the parties had wished the direct application of Sub-Clause 20.8 GC they would have removed Sub-Clause 20.3 GC.

207. The Claimant supports its allegation that the parties are obligated to take the pre-arbitral steps provided for in the Contract, with quotations of several scholars and [applicable law] that provides that parties to contracts are required to act in good faith in the exercise of their respective rights and obligations.

208. In sum, the Claimant contends that Sub-Clause 20.2 PC as amended provides for a full­term DAB and, although it was not put in place, the Claimant was entitled to request the appointment of an ad hoc DAB to preserve the intention of the parties. The Claimant further considers that the Respondent acknowledged the validity of the DAB's appointment by its request to the President of FIDIC to revoke the DAB's appointment and by adhering to the dispute resolution provisions with the issuance of Notices of Dissatisfaction.

209. With regard to the validity of the DAB's decisions, the Claimant considers that they are valid, because the DAB was duly appointed for the reasons stated above, was properly established under the Contract and had jurisdiction to decide upon the matters in dispute pursuant to Sub-Clause 20.4 of the Contract, which reads as follows:

If a dispute (of any kind) arises between the Parties in connection with, or arising out of the Contract or the execution of the Works, including any dispute as to any certificate, determination, instruction, opinion or valuation of the Engineer, then after a DAB has been appointed pursuant to Sub-Clause 20.2 [Appointment of the Dispute Adjudication Board] and 20.3 [Failure to Agree Dispute Adjudication Board] either Party may refer the dispute in writing to the DAB for its decision [...]

210. Consequently, the Claimant asserts that, as long as the DAB was validly constituted and had jurisdiction to hear the dispute, the DAB's decisions bind the Respondent pursuant to Sub-Clause 20.4 para. 3 GC which states that "the decisions shall be binding on both parties, who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award". The Claimant supports this allegation with [relevant provisions of the applicable law] which provide for the principle pacta sunt servanda and the obligation to fulfil the contracts in good faith: since the parties obliged themselves under Sub-Clause 20.4 GC to give effect to the DAB decision, by not doing it the Respondent is breaching [the applicable law].

211. Finally, the Claimant contends that, since the decisions of the DAB bound the Respondent, the amounts awarded to the Claimant became due and payable on June 1, 2009. Thus, the Claimant requests that the decisions of the DAB should be given effect to by the Respondent prior to the making of a Final Award by the Arbitral Tribunal, by obliging the Respondent promptly to make payment to the Claimant of the amount of …, plus simple interest at 6% per annum, from the date of the Decision for the first twelve months thereafter, then plus compound interest at 6% per annum thereafter, plus 50% of the costs of the DAB, and return to the Claimant of the Performance Security.

8.3. Decision of the Arbitral Tribunal

212. The Claimant requests the Arbitral Tribunal to confirm that the DAB was properly constituted and in accordance with the Contract, that the sole Adjudicator had jurisdiction to hear and decide the referrals made by the Claimant, and that the decisions of the DAB are binding upon the Respondent.

213. The Arbitral Tribunal must first decide whether the appointment was proper and in accordance with the Contract. Should the Arbitral Tribunal find that this is not the case, this would lead to the conclusion that the DAB would not have jurisdiction to hear the referrals and the corollary would be that the decisions of the DAB do not bind the Respondent.

214. For this purpose, the Arbitral Tribunal finds of the utmost importance to consider the original Sub-Clause 20.2 GC of the Contract without the amendment set forth in the Particular Conditions. Such clause reads as follows:

Disputes shall be adjudicated by a DAB in accordance with Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision]. The Parties shall jointly appoint a DAB by the date 28 days after a Party gives notice to the other Party of its intention to refer a dispute to a DAB in accordance with Sub-Clause 20.4.

The DAB shall comprise, as stated in the Appendix to Tender, either one or three suitably qualified persons ("the members"). If the number is not so stated and the Parties do not agree otherwise, the DAB shall comprise three persons.

If the DAB is to comprise three persons, each Party shall nominate one member for the approval of the other Party. The Parties shall consult both these members and shall agree upon the third member, who shall be appointed to act as chairman.

However, if a list of potential members is included in the Contract, the members shall be selected from those on the list, other than anyone who is unable or unwilling to accept appointment to the DAB.

The agreement between the Parties and either the sole member ("adjudicator") or each of the three members shall incorporate by reference the General Conditions of Dispute Adjudication Agreement contained in the Appendix of these General Conditions, with such amendments are agreed between them [sic].

The terms of the remuneration of either the sole member of each of the three members shall be mutually agreed upon by the Parties when agreeing the terms of appointment. Each Party shall be responsible for paying one-half of this remuneration.

lf at any time the Parties so agree, they may appoint a suitably qualified person or persons to replace any one or more members of the DAB. Unless the Parties agree otherwise, the appointment will come into effect if a member declines to act or is unable to act as a result of death, disability, resignation or termination of appointment. The replacement shall be appointed in the same manner as the replaced person was required to have been nominated or agreed upon, as described in this Sub-Clause.

The appointment of any member may be terminated by mutual agreement of both Parties, but not by the Employer or the Contractor acting alone. Unless otherwise agreed by both Parties, the appointment of the DAB (including each member) shall expire when the DAB has given its decision on the dispute referred to it under Sub­ Clause 20.4 [Obtaining Dispute Adjudication Board's Decision], unless other disputes have been referred to the DAB by that time under Sub-Clause 20.4, in which event the relevant date shall be when the DAB has also given decision on those disputes.

215. Consequently, the first 4 paragraphs of Sub-Clause 20.2 GC of the General Conditions originally provided for the constitution of an ad hoc DAB when a certain dispute arose. Notwithstanding this fact, the Parties agreed to amend Sub-Clause 20.2 GC and replaced the first four paragraphs of this clause in the Particular Conditions, which prevails over the GC pursuant to Clause 2 of the Contract. With the new amendments, Sub-Clause 20.2 PC would read as follows:

Disputes shall be adjudicated by a DAB in accordance with Sub-Clause 20.4 (Obtaining Dispute Adjudication Board's Decision).

The DAB shall comprise one member who shall be appointed at the joint request of the parties by the President of FIDIC or by a person appointed by the President. Such nomination shall be deemed to be accepted by both the Employer and the Contractor.

The Parties shall enter into the Dispute Adjudication Board Agreement (in the form enclosed in Schedules) with the member appointed following the above procedure within 42 days after the Commencement Date.

The agreement between the Parties and either the sole member ("adjudicator") or each of the three members shall incorporate by reference the General Conditions of Dispute Adjudication Agreement contained in the Appendix of these General Conditions, with such amendments are agreed between them [sic].

The terms of the remuneration of either the sole member of each of the three members shall be mutually agreed upon by the Parties when agreeing the terms of appointment. Each Party shall be responsible for paying one-half of this remuneration.

If at any time the Parties so agree, they may appoint a suitably qualified person or persons to replace any one or more members of the DAB. Unless the Parties agree otherwise, the appointment will come into effect if a member declines to act or is unable to act as a result of death, disability, resignation or termination of appointment. The replacement shall be appointed in the same manner as the replaced person was required to have been nominated or agreed upon, as described in this Sub-Clause.

The appointment of any member may be terminated by mutual agreement of both Parties, but not by the Employer or the Contractor acting alone. Unless otherwise agreed by both Parties, the appointment of the DAB (including each member) shall expire when the DAB has given its decision on the dispute referred to it under Sub­ Clause 20.4 [Obtaining Dispute Adjudication Board's Decision], unless other disputes have been referred to the DAB by that time under Sub-Clause 20.4, in which event the relevant date shall be when the DAB has also given decision on those disputes.

216. The Arbitral Tribunal would like to stress that the new three first paragraphs refer to the wish of the Parties to establish a permanent DAB appointed from the very beginning after the entry into force of the Contract, and not an ad hoc DAB to solve a particular dispute either during or after the termination of the Contract. But the most important issue in the amended clause is that, through this amendment, the Parties impliedly rejected the possibility that a dispute could be solved by an ad hoc DAB, since Sub­ Clause 20.2 PC replaced the mechanism of an ad hoc DAB set forth in Sub-Clause 20.2 GC, instead of adding a permanent DAB mechanism to the ad hoc mechanism set forth in the General Conditions.

217. The Arbitral Tribunal considers that the DAB as ultimately constituted was an ad hoc DAB, since it was formed once the dispute arose and once the Contract had been terminated. If a DAB were appointed before the termination of the Contract and to solve not only a particular dispute, the Tribunal would have considered that it was a permanent DAB, even if it had been constituted one year after the commencement date, since the time limit of 42 days does not impede the constitution of a DAB after this time limit. In the present case, for reasons unknown to the Arbitral Tribunal, none of the parties proceeded with the appointment of DAB during the life of the Contract. Further, the Contract provided in Sub-Clause 20.3 GC the possibility to appoint the permanent DAB upon request of one party in case the other party was reluctant to participate in the constitution of the DAB, and the Claimant did not use this recourse. Therefore, the circumstances of the appointment of the DAB lead the Tribunal to conclude that it was an ad hoc DAB, and not the one agreed by the Parties through the amendment of the GC.

218. It is important to clarify that the Tribunal reaches these conclusions due to the particular circumstances of this case. The Arbitral Tribunal does not question the competence of a DAB to resolve a dispute regarding the termination of the Contract. If in the present case the DAB were constituted before the termination and having a permanent character, the DAB would have had jurisdiction to solve the dispute, and the parties should had set up the DAB mechanism before arbitration.

219. However, it seems that the Claimant does not attribute so much importance to this fact, because it states that the real intention of the Parties was to try to solve any dispute though a DAB before going to arbitration. In this regard, the Tribunal does not believe that this was the intention of the Parties. In the present circumstances, the Tribunal considers that the amendments of a contract are very descriptive of the parties' intention. If it had been their intention, they would not have replaced a provision referring to an ad hoc DAB by a provision referring to a permanent DAB, but they would have simply added a provision for the constitution of the permanent DAB, the role of the ad hoc DAB being limited for instance to cases w[h]ere a dispute arose and the permanent DAB had not been constituted, or to disputes arising after the expiry of the mandate of the permanent DAB.

220. In this sense, in this particular case, since, after the amendment of the GC and according to the Parties' will, there was no possibility to appoint an ad hoc DAB, the Claimant should have submitted the dispute directly to arbitration pursuant to Sub-Clause 20.8 GC. Only with this interpretation Sub-Clause 20.8 GC may have any legal effect and a scope of application, and the Arbitral Tribunal considers that a contract has to be interpreted giving sense to all of its clauses. On the contrary, the Claimant's interpretation would lead to the result that a claiming party would need to solve a dispute through a DAB first, with no possibility to use arbitration directly. This interpretation empties the content and the meaning of Sub-Clause 20.8 GC which expressly addresses the situation where no DAB is in place: "whether by reason of the expiry of the DAB's appointment or otherwise" [emphasis added].

221. This interpretation does not contradict the wording of Sub-Clause 20.6 GC, because Sub-Clause 20.8 GC refers precisely to Sub-Clause 20.6 GC, when a dispute is submitted directly to arbitration, and this is the reason why Sub-Clause 20.6 GC contains the words "(if any)" to foresee not only cases in which the DAB fails to give a decision within the designated time limit, but also cases in which Sub-Clause 20.8 GC applies and it is then possible to start directly arbitration proceedings without a previous DAB decision. Further, this interpretation does not either contradict Sub-Clause 20.4 GC, whereby a party has to refer a dispute to a DAB, since in those cases where Sub­Clause 20.8 GC applies, it excludes the application of Sub-Clauses 20.4 and 20.5, so the parties are relieved to [sic] refer a dispute to a DAB.

222. The Arbitral Tribunal would like to stress that it does not question the Parties' right to appoint a DAB. On the contrary, as stated above, the Tribunal considers that the Parties could do so even after the expiration of the 42-day period set forth in amended Sub­Clause 20.2. But if the parties did not constitute a DAB in the way established in the Contract they have to assume the consequences of this inaction. Further, the GC provides for a mechanism to constitute a DAB if a party does not participate, under Sub­Clause 20.3 GC. Thus, the Claimant could have constituted the DAB during the life of the Contract, and this DAB would have decided on the termination. However, the Claimant, for whatever reasons, did not do it and now has to bear the consequences. Therefore, in this particular scenario there was no DAB in place when the dispute arose and the Claimant had to go, pursuant to Sub-Clause 20.8 GC, directly to arbitration.

223. To make things clear: the Arbitral Tribunal does not dispute the compulsory character of DAB procedures in FIDIC contracts before addressing a dispute to arbitration. On the contrary, the Arbitral Tribunal believes that, had the Parties not amended Sub-Clause 20.2, an ad hoc DAB would have been the necessary mechanism to solve this dispute before arbitration, and the Claimant would have proceeded correctly. Similarly, considering the amendment of Sub-Clause 20.2, should the Parties have appointed a permanent DAB to solve not only a particular dispute, then the Parties should have had to use this mechanism before going to arbitration. However, in the case at hand, since this was not the mechanism used the Arbitral Tribunal considers that the constituted DAB was a body that had not been agreed by the Respondent as the authorized institution to solve the disputes between the Claimant and the Respondent and therefore the appointed DAB infringed the agreement of the Parties, as the Respondent pointed out in the respective Notices of Dissatisfaction of November 11, 2008 and June 26, 2009. Consequently, the DAB had no jurisdiction to decide the disputes referred to it, with the consequence that the decisions rendered by the DAB do not bind the Respondent and cannot be given effect.

………

10. Summary of the conclusions

225. The Arbitral Tribunal has reached to the following conclusions:

• The Arbitral Tribunal has jurisdiction to solve the disputes submitted by the Parties, which arose in connection with the Contract.

• The prescription period for both the Claimant's claim and the Respondent's counterclaim started to run when the Notice of Termination took effect. Therefore, the Claimant submitted its claims within the prescription period, while the Respondent's counterclaim was submitted after the expiry of the prescription period.

• In the particular circumstances of this case, once the Contract was terminated with no DAB in place, Sub-Clause 20.8 GC required the parties to go directly to arbitration to solve any dispute. Therefore, the DAB constituted by unilateral action of the Claimant after termination had no jurisdiction to solve the disputes submitted to it and its decisions do not bind the Respondent.

Holding of the award

In light of the foregoing the Arbitral Tribunal:

1. Declares that it has jurisdiction with respect to the Claimant's claims and the Respondent's counterclaims.

2. Declares that the Claimant's claims are not time-barred.

3. Declares that the Respondent's counterclaims are time-barred.

4. Dismisses Respondent's counterclaims.

5. Declares that the DAB was not validly constituted and had no jurisdiction with regard to the disputed submitted to it.

6. Declares that the DAB's decisions are not binding upon the Respondent.

7. Defers all other decisions, including the one on costs, to a future award.'