‘A. Relevant procedural background

1. In Procedural Order No. 1 … the Sole Arbitrator dismissed the Respondent’s Request for a Preliminary Decision on Addendum No. 4 holding that (i) it would be premature to deal with such issue and that (ii) the effects of Addendum No. 4 might still be decided by way of a preliminary decision after the Parties had comprehensively briefed all issues so as to enable the Sole Arbitrator to have a reasonably complete view of the dispute as a whole.

2. During a telephone conference call … the Sole Arbitrator asked the Respondent to state … whether it maintained its request for a preliminary decision on Addendum No. 4 … [T]he Conference Call Report … further states that the Sole Arbitrator would decide whether it would be appropriate to bifurcate even in the absence of a request by the Respondent. In the same Report, the Sole Arbitrator stated that time limits would be set in order for the Parties to file submissions on Addendum No. 4.

3. … the Respondent wrote [to] the Sole Arbitrator (and the Claimant) noting that it maintained its request that Addendum No. 4 be dealt with by way of a preliminary decision.

4. The Sole Arbitrator then established time limits providing the Parties with the opportunity to present fully their respective positions on the Addendum No. 4 issue. …

6. … after receiving the Parties’ submissions, the Sole Arbitrator informed the Parties that he would consider whether it would be appropriate to bifurcate the proceedings. … [The arbitrator] also requested the Parties to state whether, in their view, the Addendum No. 4 issue was purely legal or whether a short evidentiary hearing would be necessary.

7. The Respondent replied to the Sole Arbitrator’s letter … stating that the table of submissions containing argument pertinent to Addendum No. 4 was exhaustive. Furthermore, the Respondent stated that the Addendum No. 4 issue was purely legal and no evidentiary hearing was required.

8. The Claimant answered … directing the Sole Arbitrator’s attention to further areas in the Claimant’s Reply containing argument relevant to Addendum No. 4. Additionally, the Claimant contended that the issue of Addendum No. 4 was not purely legal and that, if the Sole Arbitrator were inclined to bifurcate the proceedings, a short hearing should be convened.

B.The applicable law

9. The Sole Arbitrator’s power to bifurcate. The arbitration clause in the General Conditions of Contract states that this arbitration shall be conducted in accordance with the ICC Rules. In addition, given that the ICC determined the place of arbitration to be Paris, France, the arbitration proceedings are governed by the provisions contained in Article 1492 et seq. of the New French Code of Civil Procedure (NFCCP).

10. Paragraph 39 of the Terms of Reference provides that whenever the provisions of the arbitration agreement, the ICC Rules, Article 1492 et seq. NFCCP or the Terms of Reference are silent as to a particular procedural point on which the Parties are unable to agree, the Sole Arbitrator shall determine such point in his discretion, as authorized under Article 1494 of the NFCCP and Article 15(1) of the ICC Rules.

11. Turning to the Respondent’s request to bifurcate the proceedings, Article 15(2) and Article 20(1) are the provisions in point.1 Article 15(2) provides that the Sole Arbitrator “shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case”. Article 20(1) instructs the Sole Arbitrator to “proceed within as short a time period as possible to establish the facts of the case by all appropriate means”.

12. Articles 15(2) and 20(1) read together give rise to a dual mandate, which requires a Sole Arbitrator to manage proceedings efficiently while at the same time to protect the parties’ right to have a reasonable opportunity to present their case. Therefore, a decision to bifurcate proceedings rests wholly with an arbitrator (absent an agreement between the Parties), and such a decision is permissible provided it does not unreasonably restrict a party’s right to present its case.

13. As for the NFCCP, Part Ill therein provides the provisions relevant to the making of an arbitral award in domestic arbitrations governed by French law. In international arbitrations, where the procedural law is French law (as is the case here), these same provisions apply by virtue of Article 1495 NFCCP.

14. In defining an arbitral award, Article 1475 NFCCP states, in relevant part, that “the award terminates the jurisdiction of the arbitral tribunal over the dispute thereby decided”. In spite of the fact that this provision fails to treat explicitly the making of partial awards, it is nevertheless widely recognized that an arbitrator’s power to make such awards under French law derives from his or her discretionary power to organize arbitral proceedings.2

15. In light of the foregoing, there can be no doubt that the Sole Arbitrator has the power to decide the issue of Addendum No. 4 as a preliminary matter. Whether such a decision is appropriate to take in the present case is a separate matter that will be addressed in section D below.

C. The Parties’ contentions in relation to deciding as a preliminary matter the Respondent’s objection based on Addendum No. 4 to the Contracts

16. The Respondent argues that the question of the validity and the effects of Addendum No. 4 should be dealt with by way of a preliminary decision. Among the reasons advanced by the Respondent are the following (1) a preliminary decision would save considerable time and costs; (2) Addendum No. 4 is a short document and the operative provisions are less than thirteen lines in length; (3) Addendum No. 4 represented a compromise by which [Claimant] agreed to give up all its claims arising out of the extensions of time to the completion of the works including its right to claim prolongation costs as set out in its Statement at Completion, and [Respondent] agreed to give up its liquidated damages claims until [date]; and (4) all supplementary costs claimed by [Claimant] were compromised by this Addendum.

17. The Claimant replies that the Sole Arbitrator should not bifurcate the proceedings. In this respect, the Claimant argues that (1) the issue of Addendum No. 4 turns on facts related to the whole of the case; (2) bifurcation would not reduce the costs of this arbitration, and furthermore, it may lead to duplication and increased costs; (3) its claim for prolongation and disruption costs has not been compromised by Addendum No. 4 and that no settlement occurred as a result of the Addendum; (4) if Addendum No. 4 does act as a settlement agreement, it relates only to its claim for prolongation costs in respect of the second extension of time granted by Addendum No. 4 and any claims related to the first extension of time fall outside the scope of Addendum No. 4; and (5) Addendum No. 4 does not constitute a valid settlement agreement as a matter of [applicable] law.

D. Criteria considered in deciding whether to bifurcate

18. In deciding whether to bifurcate proceedings, there is no bright line rule to follow as such a decision will largely depend on the particular circumstances of each case.3 That said, the following factors are among those frequently considered when deciding whether to bifurcate arbitration proceedings: (1) whether the issue to be dealt with is capable of being separated from the other parts of the arbitration; (2) whether the parties have had an opportunity to brief their position on the question of bifurcation; (3) whether the arbitrator has a sufficient view of the dispute as a whole; (4) the amount and type of evidence needed to be taken in relation to the issue to be separated; (5) whether bifurcation will operate so as to expedite the proceedings and conduct them in a cost-effective manner; (6) whether bifurcation will result in prejudice or unfair advantage; and (7) whether a partial award will help to decide the remaining questions.4

19. Whether the issue of Addendum No. 4 is separable from the remainder of the dispute. Addendum No. 4 is a self-contained document, two pages in length. The Parties have outlined in their submissions the specific issues and claims upon which Addendum No. 4 operates.

20. The Parties’ opportunity to comment on bifurcation. The Sole Arbitrator takes the view that a decision on bifurcation should not be made until he has been adequately briefed on the issues relevant or likely to be relevant to the decision.5 It was precisely for this reason that the Sole Arbitrator issued Procedural Order No. 1 …, and waited until after the Parties fully briefed their cases before reaching a decision on whether to bifurcate.6 As shown in paragraph 4 above, the Parties have been given several opportunities to comment on the question concerning Addendum No. 4. The Sole Arbitrator therefore considers himself sufficiently apprised of the issues relevant to a determination on bifurcation.7

21. The Sole Arbitrator’s awareness of the dispute as a whole. The Parties have filed the following submissions, in accordance with the agreed Provisional Timetable, which fully set forth their respective positions in relation to the whole of the issues in dispute ...

22. Each submission mentioned in the table above consists of more than 100 pages and was accompanied by no less than 10 file folders containing documentary evidence. In addition, the Parties have filed both witness statements and rebuttal witness statements. Based on the foregoing, the Sole Arbitrator takes the view that he cannot only see the trees, but the forest is in sight as well.

23. The evidence required to rule on Addendum No. 4. The Parties dispute two main issues with respect to Addendum No. 4, which include (1) the claims caught by the Addendum and (2) the legal effects, if any, of the Addendum. The Parties could reasonably address such issues by calling one witness for each issue during a hearing that would last no more than two days.

24. Whether bifurcation would help expedite the proceedings. The claims at

issue in relation to Addendum No. 4 constitute a significant portion of the total claims in dispute. The Sole Arbitrator takes the view that in balancing the estimated time to separate the issue of Addendum No. 4 with the potential for savings in time and money for the Parties, it is safe to say that bifurcation will likely not augment either the time or money spent on the arbitration.

25. The issue of prejudice and unfair advantage. The Sole Arbitrator does not find any reasons why either Party would be prejudiced or gain an unfair advantage in the event bifurcation is to be ordered.

E. The decision of the Sole Arbitrator

26. The Sole Arbitrator takes the view that bifurcation is practical when the resolution of one issue might eliminate or reduce a number of issues remaining in dispute. The effect of a contract that may waive or release a party from liability, or that may foreclose or limit a party’s right to bring certain claims, may well reduce the number of issues in dispute and consequently reduce the time and expense associated with this arbitration.

27. In the Sole Arbitrator’s view, the question of Addendum No. 4 lends itself to a determination by way of a partial award. Addendum No. 4 can be clearly separated without significantly intruding on the merits of the case. The resolution of this decision would be helpful for both Parties, and it appears more likely than not that there will be economic advantages in making a partial award that may reduce a large portion of the claims in dispute between the Parties.

28. Based on his reading of Addendum No. 4 to the Contracts, and his assessment of the criteria mentioned above, the Sole Arbitrator is driven to the conclusion that there is sufficient ground to justify the separation of the identified issues in relation to Addendum No. 4 from the remaining substantive issues of the case. Therefore, the Respondent’s request to bifurcate the proceedings is granted.’

1
See Yves Derains & Eric A. Schwartz, A Guide to the ICC Rules of Arbitration 271 (2005) (stating that Article 15 and Article 20(1) serve as the “required point of departure whenever decisions need to be taken with respect to matters of arbitral procedure that are not the subject of express provisions of the Rules”).

2
Fouchard, Gaillard, Goldman on International Commercial Arbitration 742 (Emmanuel Gaillard & John Savage eds., 1999); see also Jean-François Poudret & Sébastien Besson, Comparative Law of International Arbitration 632 (2nd ed. Sweet & Maxwell 2007).

3
Fouchard et al., supra note [2], at 744.

4
Cf.Partial Award of March 17, 1983 No. 4402in… Yearbook on Commercial Arbitration, Volume IX 1984 at 139 (Peter Sanders ed. 1984) (setting out some of the factors to consider when rendering a partial award).

5
See Alan Redfern and Martin Hunter et al., Law & Practice of International Commercial Arbitration 373 (4th ed. 2004) (stating that this is particularly true where only one party requests a preliminary award).

6
See id. at 284 (suggesting that an opportune time to consider bifurcation is after written proceedings have been concluded); cf. Albert Jan van den Berg, “Organizing an lnternational Arbitration: Practice Pointers”, in The Leading Arbitrators’ Guide to International Arbitration (Lawrence W. Newman & Richard D. Hill, eds., 2004) (explaining that in the event an arbitrator decides to bifurcate proceedings, he or she should be generous with respect to the evidence allowed in the first phase of the bifurcated proceedings since often times evidence will surface in the second phase that could have impacted the first phase).

7
See Derains & Schwartz, supra note [1], at 230 (noting that Article 15(2) gives an arbitrator the discretion to assess when he or she has been sufficiently briefed, and whether it would be “unreasonable to permit the continued exchange of either memorials or evidence that may no longer be of any use to the arbitrators”).