'As provided in the Timetable, the Arbitral Tribunal issues this Procedural Order to decide Respondent's motion to stay these Proceedings ("Respondent's Motion") and Claimants' opposition thereto ("Claimants' Opposition").

I. Background. Position of the Parties.

1. As announced at the meeting held on February 9, 2004 (and reflected in the Terms of Reference and in the Timetable), Respondent's Motion was filed on March 15, 2004, seeking to stay this Arbitration until a decision is rendered in Case 12125/JNK.

2. On the same day, and since the aforementioned filing had been anticipated, Claimants submitted Claimants' Opposition.

3. Respondent's Motion is based on the existence of Case 12125/JNK which, in Respondent's view, and compared with these Proceedings involves:

a. The same commercial transaction;

b. The same parties;

c. In large part, the same facts; and

d. Many of the same issues submitted for determination in these Proceedings.

4. Respondent argues that the determination of issues in Case 12125/JNK will impact core issues of this Arbitration, whereby "[t]he failure to grant this motion [Respondent's Motion] would have the effect of having two tribunals hear and determine the same issues, arising from the same facts and transactions, between the same parties, with the potential of inconsistent awards and would have the effect of depriving [Respondent] from effectively asserting a defense of res judicata".

5. Respondent further contends that Respondent's Motion has legal support in the principles of "linked agreements" and res judicata, which are recognized with striking similarity in both New York law (applicable to the merits of Case 12125/JNK) and Mexican law (applicable to the merits of these Proceedings).

6. Thus, the close relationship between the Shareholders Agreement and the Stock Purchase Agreement (the former being an exhibit to the latter) implies-under the linkage principle-that the fate of the Stock Purchase Agreement under Case 12125/JNK includes the Shareholders Agreement. In fact, the rescission sought in such case covers both agreements and is based on the same allegations used as defenses in these Proceedings.

7. Correlatively, one of the fields of application of the res judicata principle "is to prevent the issuance of contradictory judgments, which may take place when the fundamental claims of the first trial are the same in a second proceeding". Such, indeed, is the case of Case 12125/JNK and these Proceedings.

8. Respondent's Motion finishes stating that "[t]he inescapable conclusion under the laws of either New York or Mexico is that a stay of this proceeding is not only pragmatically necessary, it is legally necessary".

9. Claimants' Opposition, in turn, refers to Respondent's unsuccessful Request for Consolidation and contends that Respondent's Motion "really seeks a 'de facto' consolidation with the . . . arbitration [Case 12125/JNK], a move the ICC Court rejected on March 21, 2003".

10. It further points out that the ICC Rules, while providing in Article 4.6 for consolidation, do not contemplate the stay of arbitral proceedings. Furthermore, as a consequence of the rejection of the Request for Consolidation, the ICC Court has urged the Tribunal to move forward with this Arbitration, commenced as far back as on December 26, 2002.

11. Claimants' Opposition also argues that the possibility of inconsistent results in Case 12125/JNK and in these Proceedings is not sufficient basis to grant Respondents' Motion and underlines that the Stock Purchase Agreement and the Shareholders Agreement are separate contracts, with different arbitration clauses, New York law governing the former and Mexican law governing the latter. Thus, the tribunal in charge of Case 12125/JNK "does not have jurisdiction to grant rescission of the separate Shareholders Agreement" and even if granted, "this Tribunal would be required to determine whether that rescission is a defense to enforcement of the Shareholders Agreement under Mexican law".

12. Claimants' Opposition concludes pointing out that if some stay is deemed appropriate, it should not be more than partial, allowing to "consider and issue a partial or interim award on the substantive issues before it [the Tribunal]: whether the Technical Assistance Agreement entered by respondent and [X] was in the 'ordinary course of business' and whether respondent is required to purchase claimants' shares of [X] pursuant to the Terms of the Shareholders Agreement".

II. Evaluation of the Arbitral Tribunal.

1. The starting point of the Tribunal's evaluation is to clarify that the dismissal of the Request for Consolidation does not prevent, per se, the stay of these Proceedings.

2. Certainly, Article 4.6 of the ICC Rules sets out the existence of a "legal relationship"1 between the same parties as the basic features to consolidate a pending arbitration with a new request, provided the terms of reference in the first case have not been signed or approved by the ICC Court. The narrowness of Article 4.62, in turn, has been coupled with other considerations, particularly the features of the arbitration clauses involved in the cases submitted for consolidation.

Anne Marie Whitesell and Eduardo Silva-Romero point out:

Before the Court can consider including the claims of a new arbitration request in pending ICC proceedings, two requirements must at least be fulfilled, namely (i) the two cases must pertain to the same legal relationship and (ii) the parties must be the same. (...)

However, the mere fulfillment of these two requirements is in itself not necessarily enough. In a case where one of the parties requested the consolidation of two cases on the basis of Article 4(6) and the opposing party objected to such consolidation, the Court decided not to consolidate the cases because, even though the requirements of Article 4(6) were met, each arbitration agreement involved referred to a different place of arbitration, one to Paris and the other to Amsterdam3. (Emphasis added)

3. Here the difference may be regarded as more significant: the places of arbitration are alike, but the laws applicable to the merits of the disputes are different.

Thus, the Tribunal considers that the ICC Court's ruling against the Request for Consolidation is responsive to this kind of aspects, leaving untouched-as it should be-the issue of the interaction between the decision to be rendered in Case 12125/JNK with respect to these Proceedings. Consequently, the Tribunal does not perceive inconsistency in addressing Respondent's Motion vis-à-vis the ICC Court's decision of March 21, 2003.

5. With the preceding consideration in mind, the Tribunal notes that stay of proceedings is not alien to international arbitration. Although generally associated with competing jurisdiction between national courts and arbitral tribunals4, the lis pendens, which is the principle that grounds stay, has also surfaced (yet rarely) in jurisdictional conflicts between arbitral tribunals.5

6. Respondent's Motion, of course does not involve a jurisdictional issue. However, it relates to one of the core purposes of the lis pendens, which is to preserve consistency and to avoid conflicting decisions.

As pointed out by Elliot Geisinger and Laurent Lévy, and applicable, mutatis mutandis, to this Arbitration:

[I]t is preferable to deal with the issue of parallel and conflicting proceedings at an early stage, rather than running the risk of being faced later with conflicting decisions. If arbitrators ignore competing court proceedings, they may be doing a disservice to the parties, for any time gained by disregarding parallel proceedings will be outweighed by the real-and potentially unsolvable-problems that will arise if the national court subsequently renders a conflicting judgment. 6 (Emphasis added)

7. This need to avoid possible inconsistencies and to try to prevent future problems is paramount to this Tribunal, which distinctly understands that its mission is, to the fullest extent possible, to render rulings that decide the disputes submitted by the Parties, without giving room for further litigation thereof.

8. Article 35 of the ICC Rules, understood in the context of the actual reliability expected from international arbitration, provides support to the Tribunal's position, and even Article 20,1 ibidem-cited in Claimants' Opposition-may supply further support because, in the same context, the speed called for in such provision shall not be served if under the guise of rushing an arbitral tribunal does not consider and sets aside factors that may delay or complicate the effectiveness of a given decision.

As noted by Horacio Grigera Naón:

The application of lis alibi pendens to court/arbitral, arbitral/arbitral proceedings would reduce procedural activity regarding substantially the same parties and matters and thereby save time, money and human resources. . . . From a policy point of view, it can help to avoid the rendering of contradictory positions vying for immediate enforcement.7

9. Thus, having found support to the possibility to stay arbitral proceedings, the Tribunal moves to compare the issues submitted in this Arbitration with those submitted in Case 12125/JNK and finds a large degree of connection among some of them. In particular, the Tribunal notes the attack mounted in Case 12125/JNK against the Shareholders Agreement, under the allegation of being part of the Stock Purchase Agreement, and the circumstance that the Shareholders Agreement is the foundation of the claims submitted by [Claimants] in these Proceedings.

10. The conclusion of applying the basis of the stay to the connection between issues debated in Case 12125/JNK and issues debated in this Arbitration can be easily inferred: Respondent's Motion deserves to be granted from this point of view.

11. Although the above might be sufficient to decide in favor of Respondent's Motion, the Tribunal considers appropriate to briefly refer to the res judicata principle, bearing in mind, among other things, that Respondent has asserted-and, indeed, it is reflected in the Terms of Reference-the likelihood of its use as defense against Claimants' petitions in this Arbitration.

12. The principle of res judicata meaning, on the one hand, that the terms of judicial adjudications are definite, whereby the same issues cannot be relitigated between the same parties (non bis in idem), and, on the other hand, that what has been decided is binding upon the parties, is firmly rooted and recognized as a principle of international law and certainly applicable in arbitral proceedings and to arbitral awards.

The award rendered in 1941 by the arbitral tribunal in the Trail Smelter case includes the following statement:

The sanctity of res judicata attached to a final decision of an international tribunal is an essential and settled rule of international law.

If it is true that international relations based on law and justice require arbitral or judicial adjudications of international disputes, it is equally true that such adjudication must, in principle, remain unchallenged, if it is to be effective to that end.8

13. It is then clear that in addition to the references to res judicata under New York and Mexican laws that present Respondent's Motion-which eventually might be deemed inapplicable due to their procedural rather than substantive features-the principle in question plays a distinct role in international arbitration.

14. Thus, comparing some of the issues debated in Case 12125/JNK with some of those submitted in these Proceedings, the Tribunal notes that the res judicata principle has close relation with them. Furthermore, Respondent, as mentioned above, has anticipated its eventual use as defense, while Claimants have announced the discussion of its application in this Arbitration if the rescission of the Shareholders Agreement is granted in Case 12125/JNK.

15. And on top of all this, the importance of res judicata deserves close attention from the Arbitral Tribunal, as such and in connection with the aforementioned Article 35 of the ICC Rules.

Bernard Hanotiau points out:

An arbitrator who renders an award in violation of res judicata runs the risk that the award might be subsequently set aside:

- either for lack of a valid arbitration agreement or because the tribunal has exceeded its mandate, having become functus officio upon rendering the first award;

- or because its reasons contradict those of the first award;

- or on account of a violation of due process; . . .9

16. The conclusion, easily drawn from the preceding remarks is, indeed, that also from the point of view of res judicata and its effects the Tribunal does favor the stay requested by Respondents.

17. Such stay, in turn, shall run from the date of this Procedural Order until twenty (20) days after the date of notification to the parties to Case 12125/JNK of the ruling that addresses the Shareholders Agreement, whether declining to exercise jurisdiction on it or rescinding or upholding such contract, in whole or in part, provided, however, that if a motion under C.P.L.R. 7509 is filed within the aforementioned twenty (20) days against the ruling, the stay will run until the arbitral tribunal in Case 12125/JNK has resolved such motion.

The Parties, in any event, shall keep the Arbitral Tribunal informed on the developments of Case 12125/JNK, in particular the rendering of any ruling and, if applicable, the filing of the aforementioned motion.

18. Thus analyzed from the perspective of applicability of lis pendens, on the one hand, and from the perspective of the relevance and potential effects of res judicata, on the other hand, the Tribunal deems appropriate to grant Respondent's Motion, and will do so in the next and final Section of this Procedural Order.

19. Nevertheless, Claimants' contention on the possibility of a partial stay, coupled with the duties of efficiency and expediency imposed to the Tribunal, moves it to analyze such option, concluding that it has some degree of viability regarding the determination of whether or not the Technical Assistance Agreement is a contract that requires unanimous approval by the shareholders of [X].10

20. And the Tribunal underlines that the viability to hear and decide the aforementioned issue is merely partial because it is evident that one of the two options of the decision, namely that the Technical Assistance Agreement does require unanimous approval by [X]'s shareholders will interact with the decision rendered in Case 12125/JNK with respect to the Shareholders Agreement, whether declining jurisdiction, rescinding or upholding such contract.11

21. Consequently, and with the above warnings, the Tribunal would be prepared to decree a partial lift of the stay of those Proceedings, upon the joint request of the Parties and subject to the following:

a. The issue exempted from the stay would be whether or not the Technical Assistance Agreement requires unanimous approval by the shareholders of [X], i.e. the one listed under § V(1)(i) of the Terms of Reference.

b. The Arbitral Tribunal, after hearing the Parties on the aforementioned point, would either issue a partial Award to decide this matter as well as those issues potentially derived from it (§ V(1)(j) to (n) of the Terms of Reference),12 or would opt for deciding everything in the final Award, after the conclusion of the stay granted in this Procedural Order and the processing of this Arbitration according to the Timetable.

c. Given the current Timetable, the joint indication requesting the partial lift of the stay for the purpose set out in letter (a) supra shall be submitted not later than 30 days after the date of this Procedural. Order

III. Decision

Based upon the foregoing, the Arbitral Tribunal decides:

1. To grant the stay of these Proceedings for the period set forth in § II(17) of this Procedural Order.

2. To inform the Parties that the Arbitral Tribunal is prepared to decree a partial lift of the aforementioned stay, upon the joint request of the Parties, submitted within the time limit set forth in § II(21)(c) of this Procedural Order and subject to the conditions set forth in §§ II(21)(a) and (b) ibidem.

3. To advise the Parties that they shall keep the Arbitral Tribunal informed on the development of Case 12125/JNK, in particular on the issuance of any ruling.'

1
It is worth to note that this expression is broader than, for example, "a contract" and has been interpreted as meaning the same economic transaction. (See, i.e., Yves Derains and Eric Schwartz, A Guide to the New ICC Rules of Arbitration, Kluwer Law International, The Hague, 1998 at page 65).

2
Derains and Schwartz state: "[A]rbitral institutions have, from time to time, been called upon, in the interest of the efficient administration of justice, to provide mechanisms for the possible joinder or consolidation of related arbitrations. However, few are willing to take up the call, primarily because of the variety and complexity of the different circumstances that may arise. In the case of the ICC, Article 4(6) represents the most that the institution has been willing to provide for in the rules on this subject . . ." (Derains and Schwartz, op. cit, page 62).

3
Anne Marie Whitesell and Eduardo Silva-Romero, "Multiparty and Multicontract Arbitration: Recent ICC Experience", in Complex Arbitrations. Perspectives on their Procedural Implications, ICC International Court of Arbitration Bulletin, Special Supplement, 2003, page 16. It must be noted that the views of this article correspond to its authors and not to the ICC or the ICC Court.

4
In particuIar, see the landmark case of Fomento de Construcciones y Contratas S.A. vs Colón Container Terminal S.A. (the Fomento case), where the Swiss Federal Tribunal stated that Swiss rules concerning competing jurisdiction of national courts (article 9 of the Private International Law) were analogically applicable to competing jurisdiction between a national court and an arbitral tribunal.

5
See, for example, Arthur Andersen Business Units Member Firms vs Andersen Consulting Business Unit Member Firms, where a Geneva court addressed the lis pendes argumentation of a respondent that had refused to appoint an arbitrator on the ground that the same dispute was pending before an arbitrator appointed by the ICC Court.

6
Elliot Geisinger and Laurent Lévy, "Lis Alibi Pendens in International Commercial Arbitration", in Complex Arbitrations. Perspectives on their Procedural Implications, ICC International Court of Arbitration Bulletin, Special Supplement, 2003, page 60.

7
Horacio A. Grigera Naón, "Closing Remarks", op. cit., page 81.

8
Quoted by Bernard Hanotiau in "The Res Judicata Effect of Arbitral Awards" in Complex Arbitrations. Perspectives on their Procedural Implications, ICC International Court of Arbitration Bulletin, Special Supplement, 2003, page 43.

9
Bernard Hanotiau, op. cit., pages 47 and 48.

10
According to § V(1) of the Terms of Reference the issues to [be] determined by the Arbitral Tribunal do not necessarily have to follow the order of their listing.

11
In fact the issue to be determined by the Arbitral Tribunal under § V(1)(i) of the Terms of Reference has a clear connection with the outcome of the Shareholders Agreement under Case 12125/JNK.

12
The addressing of these issues is a function of the response given to the issue of whether or not the Technical Assistance Agreement is subject to unanimous approval by the shareholders of [X].