1 ‘Procedural Order No. 4 ...

1. The Tribunal makes this Procedural Order No. 4 in response to the issues raised and set out in:

a. the Claimant’s Interim application ... (the "Interim Application");

b. the Claimant’s Note in Response to Procedural Order No 2 ... (the "Claimant’s Further Submissions");

c. the Respondent’s Submissions to Claimant’s Application for Bifurcation ... (the "Respondent’s Submissions");

d. the Claimant’s Reply to the Respondent’s Submissions on Bifurcation ... (the "Claimant’s Reply Submissions");

e. the Second Case Management Conference held by telephone conference ...

2. For convenience the Tribunal adopts common references from the pleadings to various terms and phrases.

3. The Claimant initially raised the issue of possible bifurcation in advance of Procedural Order No. 1. This current application was flagged at that stage, and the procedural timetable included a process for such an application.

4. The Claimant’s Interim Application is for the hearing listed on [a future date] with a time estimate of 10 days to be bifurcated. The Claimant submits that the hearing listed on [that date] should be reserved for the determination of the issues relating to the construction of the terms of ..., seen in their context, and whether the Respondent is in breach of those terms and that these should be treated as, essentially, the liability issues.

5. In its further submissions the Claimant has further identified the issues for preliminary determination as follows:

a. those in the Statement of Defence and Counterclaim between paragraphs 1 to 139 inclusive, except for paragraphs 79–84 inclusive;

b. those in the Statement of Case at paragraphs 78 (i) to (v) inclusive;

c. those forming part of paragraph 79 (i) of the Statement of Claim in so far as those relate to what are identified within the pleadings as ... transactions. The Claimant accepted that the precise wording of the decisions to be made on that paragraph would require further definition; and

d. those in Issues 1 to 13 inclusive of the agreed List of Issues ... including Issue 11 which relates to the Respondent’s case that the Claimant is estopped by acquiescence from asserting any rights it might have to participate in the acquisition of ... Leases.

6. The Claimant submitted that the bifurcation applied for would apply correctly the contractual scheme for service of notices agreed by the parties in Clause 4.4 of the ... Agreement. The Respondent denies that the contractual scheme applies either in the circumstances of the ... Leases, or otherwise whether due to the conduct of the Claimant or the passage of time.

7. The parties have made submissions on the approach to be taken by the Tribunal in deciding this application. The Tribunal has considered those submissions in detail and does not repeat them in this procedural order.

8. The Tribunal’s attention has been drawn to the authorities and writings set out in the Interim Application, the Respondent’s Submissions, and the Claimant’s Reply submissions. Those are helpful in identifying factors to take into account in reaching a decision.

9. The parties are agreed that the Tribunal and the parties are required to follow the ICC Rules, particularly Article 22 (1) which requires expeditious and cost-effective conduct of the arbitration.

10. The parties are agreed that ultimately the decision on whether to grant the Interim Application, as amended and refined in later submissions, is a matter of discretion for the Tribunal.

11. Having considered the various submissions and authorities in detail, the Tribunal has decided not to make an order for bifurcation of the issues either as set out in the Interim Application or at all.

12. The major factors taken into account in arriving at this exercise of the Tribunal’s discretion (without disregarding the other points included in the submissions of the parties, which have also been taken into account) are that:

a. there is insufficient certainty that bifurcation would save time, cost or cut complexity;

b. there is an existing timetable for the resolution of all disputes within the arbitration, and the Interim Application would extend that timetable for an indefinite period. The Claimant put forward (as Schedule 2 to the Claimant’s Further Submissions) a timetable to a further hearing ..., although accepted during the Second Case Management Conference that some further revision of that suggestion was needed. The Tribunal is aware of reservations expressed by the Claimant as to the current timetable, and these are addressed further below;

c. it is possible that the total costs of this arbitration may be increased by making the order sought by the Claimant for bifurcation. Although the Claimant has invited the Tribunal to make an order for bifurcation on the basis that the disputes may be resolved by agreement following a decision on the liability issues alone, following on from reduced costs involved in only one hearing, there is insufficient certainty that there would be such a settlement and consequent reduction in costs;

d. on the Claimant’s submissions it would still be necessary to deal with the evidence relevant to the Respondent’s claim relating to estoppel by acquiescence in any bifurcated hearing on liability, and that evidence is difficult to separate, at the moment anyway, from other issues that might be relevant to decisions on other relief;

e. that the witnesses, both of fact and of opinion, may be involved in two hearings with difficulties arising as to potential inconsistencies between evidence given at different times; and

f. the complexity of the issues is evident, but, even with bifurcation, this would remain a factor in resolution of the overall dispute in the absence of any settlement following a partial award on the bifurcated issues pursued by the Claimant.

13. The Claimant has suggested in its submissions that the 10-day hearing ... is insufficient for the issues to be decided. If the Claimant wishes to make any application to alter or amend the hearing dates already ordered it should do so as soon as possible and in any event on or before [date].

14. Costs of and occasioned by this Procedural Order No. 3 are to be the subject of costs submissions from each party, to be exchanged between the parties and served on the Tribunal at [time] on [date]. It is not currently envisaged that there will be reply submissions as discussed with the parties as the Second Case Management Conference.

15. The parties shall each have liberty to apply to the Tribunal for further and consequential directions.’