The Secretariat of the International Court of Arbitration International Chamber of Commerce Headquarters 38, Cours Albert 1er 75008 Paris France [email protected] By courier and email Madrid, [*] Dear Sirs, Request for Arbitration [Claimant] v. [Respondant] I. Introduction 1. Pursuant to Article 4 of the International Court of Arbitration Rules of Arbitration 2012 (the “Rules”), this Request for Arbitration (“Request”) is submitted to the Secretariat of the International Court of Arbitration (“ICC”) on behalf of [Claimant] (“[Claimant]” or the “Claimant”), a company incorporated in Spain, with respect to a dispute with [Respondent] (“[Respondent]” or the “Respondent” and, collectively with [Claimant], the “Parties”, a company incorporated in [*]. 2. The Claimant submits the Request under Article 4 of the Rules without prejudice and reserving the right to edit, modify, amend, supplement and/or further develop its submissions and claims, including the relief sought, and to submit additional exhibits and evidence at the appropriate subsequent stage(s) of the proceeding. II. The Parties A. The Claimant 3. The Claimant in this dispute is: [Claimant] [address] www.[Claimant].com 1 2089600.2 4. [Claimant] is a Spanish company that forms part of [*]’s (“[*]”) Engineering and Industry Construction Group. See www.[*].es. [*] is also incorporated in Spain. [*]’s Engineering and Industry Construction Group is responsible for, among other things, the engineering and construction of large infrastructure projects including solar-thermal plants, solar-gas hybrid plants, conventional generation plants, water infrastructure, biofuel plants, critical control systems for infrastructure and electrical transmission lines. 5. [Claimant]’s primary business activity is the supply and maintenance of electronic, industrial and telecommunications equipment for domestic (Spanish) and international infrastructure projects. [Claimant] provides a supply and sales network for companies to market and sell their products to third parties. [Claimant]’s activities span the entire product supply process, from the initial sourcing and accreditation of materials, to the delivery of the materials to the end user. [Claimant] relies on its market reputation as a company with the ability to procure high quality materials and to supply these materials in a time efficient and cost effective manner. 6. The Claimant is represented by: Mr. [*] [Law Firm] [Address] Tel: [*] E-mail: [*] 7. A copy of the Power of Attorney granted by [Claimant] to the above-mentioned legal representatives and the law firm with which they are affiliated is annexed as Exhibit C-1. 8. All communications in connection with this arbitration shall be sent to the Claimant’s representatives with copies to Mr. [*], General Counsel of [Claimant], and to Mr. [*], Deputy General Counsel of [*]. Their contact information is the following: Mr. [*] General Counsel [Claimant] [Address] Tel: [*] Fax: [*] E-mail: [*]@[Claimant].com Mr. [*] 2 2089600.2 [Address] Tel: [*] Fax: [*] E-mail: [*]@[*].com B. The Respondent 9. The Respondent in this dispute is: [Respondent] [Address] www. [Respondent].com c/o Mr. [*] Tel: [*] Fax: [*] Email: [*]@[Respondent].com 10. According to its website, [Respondent] is an [*] company listed on the National Stock Exchange of [*], which operates in the power and telecommunications industries and, among other things, designs, manufactures and supplies power transmission products, including conductors and cables for power transmission lines. III. Nature and circumstances of the dispute which give rise to the claim A. Background to the Contract 11. On [*], [Claimant] and [Respondent] entered into a written contract for the manufacture, supply and delivery of 11,000 tons (7,498 kilometres) of All Aluminium Alloy Conductor AAAC 1055 MCM, a high voltage power cable, (the “Materials”) by [Respondent] to [Claimant] (the “Contract”). The Materials were to be delivered to [Claimant] in the Amazon region of Brazil. A copy of the Contract is annexed as Exhibit C-2. 12. [Respondent] served as a supplier for [Claimant], which had entered into a contract with [Final Customer] (“[Final Customer]” or the “Final Customer”) (Clause 2). [Final Customer] had been awarded by the State of Brazil an important public power transmission grid concession in the Amazon region of Brazil, and, under its contract with [Final Customer], [Claimant] agreed to supply [Final Customer] with the cable and conductor for installation in that overhead transmission line (the “Project”). 3 2089600.2 13. In order to comply with its obligations to [Final Customer], [Claimant], for its part, entered into the Contract with [Respondent]. The Materials were to be manufactured by [Respondent] in its factories in India and supplied to [Claimant] in Brazil. B. The Contract 14. Clause 1 provided for the design, manufacture and supply of 11,000 tonnes (or 7,498 kilometres) of the Materials by [Respondent] to [Claimant]. The technical specifications of the Materials were specified in Annex 1 of the Contract. Furthermore, numerous international and Brazilian technical standards apply to the Materials. The Parties further agreed that if the Contract was silent about any respect, reference would be drawn from the international standards of the International Electrotechnical Commission (the “IEC”) or, in the absence of such standards, best international practices (Clause 3.1). 15. Pursuant to the Contract, [Respondent] would deliver the Materials to [Claimant] in seven equal lots of 1,572 tonnes (hereinafter “Lot” or “Lots”). The Contract contained delivery deadlines for each of these Lots. Pursuant to the Contract, [Respondent] would deliver the Materials from India to specified sites in the Brazilian Amazon (the “Final Sites”) under DDU Incoterms (Clause 6.1). 16. Any delay occurring during the transport of the Materials was deemed to be the responsibility of [Respondent] (Clause 10.2). 17. [Respondent] was required to deliver the Materials to [Claimant] fully “terminated, tested and ready pursuant to the terms and conditions of this Contract and its Annexes” (Clause 3.3). 18. [Respondent] was required to pack the Material “in durable packing as per generally acceptable standards for overseas consignments by sea transportation and suitable for being stored after off loading and receipt at site” (Clause 3.8). 19. Clause 14 of the Contract outlined the warranty provided by [Respondent] for the Materials. Specifically, [Respondent] warranted that the warranty covered “the Materials as per the provisions stipulated in the Contract. In particular and without limitation, said warranty is extended to the quality of Materials”. 20. Clause 16 of the Contract makes clear that the “[t]he Materials become [Claimant]’s exclusive property upon the delivery in [sic] site by [Respondent].” 21. In the event that [Claimant] terminated the Contract for reasons attributable to [Respondent], the Contract permitted [Claimant] to hire third parties to perform 4 2089600.2 the Works (as that term is defined in the Contract) pending, in a competitive manner at market price and conditions (Clause 17.4). 22. [Respondent] was responsible for any damage caused during the transport and unloading of the Materials. [Respondent] was required to repair or replace the damaged Materials within 30 days plus transport from the date of notification by [Claimant] to [Respondent] of the damage (Clauses 10.2 and 6.1). [Respondent] was also responsible for dealing with the transporters, claims for losses or damages during the transport and the payment of freightage (Clause 10.1). 23. [Claimant] was entitled to carry out inspections of the Materials both prior to and post delivery by [Respondent]. In the event of any unsatisfactory inspections, the Contract provided for independent testing at a laboratory mutually agreeable to [Respondent] and [Claimant], as well as for independent testing to be carried out by [Claimant] alone. Such testing was deemed not to imply co-responsibility on the part of [Claimant] with respect to the quality of the Materials. The testing also did not exempt [Respondent] from its responsibilities and obligations under the Contract to repair or replace defective Materials (Clause 7.2) and to ensure that the Materials did not have latent defects (Clause 14.3). 24. The Contract required that [Respondent] provide [Claimant] with a bank guarantee to guarantee the “correct and proper performance of [Respondent] during the Guarantee period” (Clause 5.5(c)). [Claimant] was permitted to execute this guarantee in circumstances where [Claimant] had terminated the Contract for reasons attributable to [Respondent] (Clause 17.4). 25. The Contract approximated USD [*] (the “Price”). The Price included the execution of all the Works as established by the Contract (Clause 5.1). [Claimant] was required to pay [Respondent] pursuant to the terms and conditions of the Contract (Clause 4.1), in the form of progressive payments based on the deliveries made, and conditioned on the “effective delivery” of the Materials to the Final Sites. 26. The Contract also provided that payment of any invoices by [Claimant] did not absolve [Respondent] from its responsibilities under the Contract nor imply acceptance by [Claimant] of the Materials (Clause 5.3). C. Defects in the Materials and delivery delays 27. [Claimant] identified serious defects in the Materials in every Lot delivered by [Respondent]. The defects were present in both the drums used to package the Materials and facilitate the unwinding and stringing of the cable, as well as in the electrical cable itself. The defects in the drums included rotten wood, disintegration, fungal growth, insects, and other problems caused by the dampness 5 2089600.2 of the wood. Defects in the cable included oxidisation, corrosion, broken wires, twisted wires (both exterior and interior), poor quality welding, surface damage including scratches, scrapes and other marks, flaking wire and dents. 28. In sum, the Materials [Respondent] delivered to [Claimant] failed to meet the technical standards set forth in the Contract and the applicable international and Brazilian standards pertaining to the Materials. 29. [Claimant] attempted to assist [Respondent] in every way possible to remedy the defects in the Materials, but without result. [Claimant] also used all reasonable endeavours to utilise the Materials that had been delivered by [Respondent], which included attempts by [Claimant] to identify the non-defective Materials by un-winding the power cable on many of the drums, an activity which resulted in considerable expenses to [Claimant] (as [Claimant] was required to purchase additional material and hire additional employees to carry out this task) and caused further delays to the Project. 30. In addition to the delivery of defective Materials and its failure to adequately repair or substitute these Materials, [Respondent] also failed to adhere to the delivery deadlines stipulated in the Contract and/or as agreed by the Parties. These delivery delays generated massive delays in the implementation of the Project and produced significant additional costs for [Claimant] including for example, the costs of purchasing additional materials from third party suppliers in order to fulfil its obligations with [Final Customer]. 31. During the entire Contract period, [Claimant] feared that [Final Customer] would terminate its contract with [Claimant] due to the defective quality of the Materials supplied by [Respondent] and [Respondent]’s extensive delays in delivering the Materials. [Claimant] repeatedly alerted [Respondent] to the dissatisfaction of [Final Customer] and the risk that [Final Customer] would terminate its contract with [Claimant]. D. [Claimant]’s termination of the Contract 32. On [*], [Claimant] terminated the Contract with [Respondent] (the “Notice of Termination”). The Notice of Termination stated, among other things, that, since the Material it had received from [Respondent] could not be used for the Project, [Claimant] intended to sell the Material to third parties in order to mitigate its damages. A copy of the Notice of Termination is annexed as Exhibit C-3. 33. On [*], as indicated in the Notice of Termination, [Claimant] provided [Respondent] with an itemised breakdown of the payments made and damages suffered by [Claimant] as of that date as a result of [Respondent]’s breaches of the Contract. A copy of this letter is annexed as Exhibit C-4. 6 2089600.2 34. When [Claimant] terminated the Contract, it already had paid approximately USD [*] to [Respondent]. Futhermore, in order to fulfil its obligations with [Final Customer], [Claimant] was forced to enter into contracts with third parties to purchase substitute materials, under which [Claimant] has committed to pay approximately USD [*]. 35. On [*], [Respondent] responded to the Notice of Termination. A copy of [Respondent]’s response is annexed as Exhibit C-5. E. Events subsequent to [Claimant]’s termination of the Contract 36. Following [Claimant]’s termination of the Contract, the Parties engaged in various meetings to attempt to resolve the dispute amicably. While negotiations were ongoing, [Respondent] initiated ex parte interim injunctive actions against [Claimant] in India and England. 37. On [*], [Respondent] obtained an ex parte order from the High Court of Bombay, preventing [Claimant] from exercising a performance guarantee which was specifically agreed to be payable on demand and without regard to the underlying dispute (Clauses 5.5 and 17.4). 38. The next day, [Respondent] obtained ex parte relief from the English High Court preventing [Claimant] from selling the defective Materials that had been supplied to [Claimant] by [Respondent]. [Claimant] previously had advised [Respondent] that it intended to sell these Materials in order to (i) mitigate its damages, including to prevent the further deterioration and consequent devaluation of the Materials; (ii) avoid the unnecessary payment of storage and security costs for the warehousing of the Materials which were and continue to be stored at the Final Sites and (iii) avoid serious liquidity problems resulting from [Respondent]’s breaches of Contract. The English High Court issued an interim order (the “Interim Order”) temporarily restricting [Claimant] from selling the Materials, pending [Claimant]’s application to set aside the terms of the order and a hearing to be held on 30 March 2012. 39. On [*], after hearing argument on [*], the English High Court issued an order discharging the Interim Order. [Claimant] provided several undertakings to the Court, regarding [Respondent]’s ability to select and inspect some of the Materials. [Claimant] complied with those undertakings. [Respondent], for its part, provided an undertaking to discontinue its proceedings in the High Court of Bombay against [Claimant]. On [*], [Respondent] withdrew the proceedings in India. 7 2089600.2 40. Furthermore, the English High Court ruled that [Respondent] would be responsible for paying the costs of the ex parte application to [Claimant], essentially because it had abused the judicial system. 41. Thus, the ex parte interim injunctive actions initiated by [Respondent] in India and England have been concluded, and, to the best of the Claimant’s knowledge, [Respondent] has not sought additional interim relief from these or other tribunals. IV. Description of claims and nature of relief sought A. [Claimant]’s claims against [Respondent] 42. In summary, [Claimant] alleges that [Respondent] breached the Contract by: (i) failing to supply [Claimant] with Materials conforming to the applicable international and Brazilian standards for these types of Materials and the technical requirements and specifications set forth in the Contract; (ii) failing to adequately substitute the Materials in accordance with the Contract; (iii) failing to meet the delivery deadlines set forth in the Contract and/or as amended by the Parties; and (iv) exceeding the maximum penalty limit set forth in the Contract. B. Statement of relief sought and estimate of amount claimed 43. Pursuant to the conditions of the Contract and Clause 17.4 in particular, the Claimant requests the following relief: (i) A declaration that [Respondent] breached the Contract; (ii) A declaration that the Contract is terminated; (iii) That [Respondent] indemnify [Claimant] for the payments [Claimant] has made to [Respondent] and past and future damages suffered by [Claimant] as a result of [Respondent]’s breaches of the Contract; (iv) That [Claimant] be entitled to interest on the amounts due; and (v) That [Respondent] bear the costs of the arbitration proceeding, including administrative expenses, fees and the expenses of the arbitrators. 44. The estimated amount of damages approximates USD [*]. 45. As with the rest of the submissions in the Request, the above is without prejudice, and the Claimant reserves the right to edit, modify, increase, amend and/or supplement its claims, the relief it seeks and its estimate of the amount claimed. 8 2089600.2 V. The arbitration A. The arbitration clause 46. Clause 20.2 of the Contract provides in relevant part: “20.2 Arbitration Any dispute, controversy and/or claim which might arise between the Parties with respect to the interpretation, execution, scope, compliance, default, validity, termination and/or any effects of this Contract, must firstly be settled directly between the Parties within a period not exceeding two (2) months. At any time after those two (2) months, the Parties may resort to legal arbitration. In case the dispute cannot be solved through the Dispute resolution process abovementioned, the dispute shall be settled finally according to the Rules of Conciliation and Arbitration of the International Chamber of Commerce of Paris by one or more arbitrators appointed in accordance with said rules.” 47. The two month negotiation period between the Parties commenced on the date [Claimant] sent its Notice of Termination to [Respondent], that is, on [*]. Since the two month negotiation period has elapsed, the Parties consent to the jurisdiction of the ICC. B. Number of arbitrators 48. As noted above, Clause 20.2 of the Contract provides in part that “the dispute shall be settled finally according to the Rules of Conciliation and Arbitration of the International Chamber of Commerce of Paris by one or more arbitrators appointed in accordance with said rules”. 49. Pursuant to Article 12(2) of the Rules, the Claimant requests that the International Court of Arbitration (the “Court”) appoint three arbitrators to conduct this arbitration proceeding. The Claimant submits that a three-member arbitral tribunal is necessary for the effective resolution of the dispute for the following reasons: (i) The dispute, which is between a Spanish party and an Indian party regarding the supply of certain materials to Brazil, is highly international by its nature; (ii) The dispute involves significant issues of contract interpretation and a complex and highly-disputed course of conduct between the Parties; 9 2089600.2 50. (iii) The issues in the arbitration involve complex technical issues regarding the quality of high-voltage conductors and cable, which will require analysis and fact-finding by the Tribunal; (iv) The Parties likely will submit voluminous evidence in support of their contentions and claims, including technical expert evidence; (v) The amount in dispute between the Parties is high (at this stage, the Claimant alone is requesting damages and compensation approximating USD [*] million). Should the Court decide that the nature of the dispute is such as to warrant the appointment of three arbitrators, pursuant to Article 4(3)(g) of the Rules, the Claimant nominates as its arbitrator for confirmation by the Court: Mr. [*] [Address] Tel: [*] Fax: [*] Email: [*]@[*].com 51. Furthermore, pending the Respondent’s consent, the Claimant submits that the President of the Arbitral Tribunal be nominated by the two arbitrators appointed by the Parties. C. Applicable law 52. The parties choice of law is contained in Clause 20(1) of the Contract: “20.1 English Law [sic] This Contract in both its application and interpretation shall be ruled and governed by French legislation. Consequently its clauses shall be interpreted and complemented where appropriate by English legal precepts and principles of pertinent application to the case. Regarding everything agreed under this Contract, the Parties subject themselves to French legislation.” 53. Clause 20(4) of the Contract further states: “20.4 Clause headings 10 2089600.2 The headings or titles of the different clauses or sub-clauses of the contractual documents were chosen solely to serve as a guide when reading said documents. For contractual effects, these headings in no way alter the contents of the clauses or sub-clauses to which they correspond.” 54. The Claimant submits that, despite potential ambiguity in the clause, the governing law of the Contract is French law for the following reasons: (i) Clause 20(1) of the Contract makes explicit that French law is applicable. The first sentence of the clause indicates that “[t]his Contract in both its application and interpretation shall be ruled and governed by French legislation” (emphasis supplied). Furthermore, the last sentence of the clause, which provides that “[r]egarding everything agreed under this Contract, the Parties subject themselves to French legislation” (emphasis supplied), emphasises the parties’ clear intention that the governing law of the Contract be French law; (ii) Although the Contract suggests that the contractual clauses “[s]hall be interpreted where appropriate by English legal precepts and principles of pertinent application to the case” (emphasis supplied), the language underscores that the application of English law (if any) should be used with caution and only “where appropriate”, that is, only where English law may fill a gap in the French law that governs the Contract; and (iii) Finally, as Clause 20(4) of Contract makes clear, “[f]or contractual effects, these headings in no way alter the contents of the clauses or sub-clauses to which they correspond” (emphasis supplied). Thus, pursuant to the terms of the Contract, the heading titled “English Law” creates no contractual effect and in no way alters the contents of the clause. 55. Thus, despite the heading of the clause and a reference to English law in the clause itself, taken together, the contents of the clause in its entirety make clear that the Contract is subject to “French legislation”. 56. Therefore, and pending the Court’s decision regarding the appropriate number of arbitrators, the Claimant respectfully requests that the President of the Arbitral Tribunal should be an experienced arbitrator with a French law degree and a deep familiarity and understanding of French law. D. Place of arbitration 57. Clause 20(2) provides in relevant part that “The seat of the Arbitration shall be London unless the Parties mutually agree, within a reasonable period of time, an alternate location.” 11 2089600.2 58. At this point, the Parties have not agreed on an alternate location. E. Language of the arbitration 59. Clause 20(2) states that “The language of the Arbitration shall be English.” F. Copies of the request for arbitration 60. In accordance with Article 4(4) of the Rules, the Claimant has sent to the Secretariat by courier, five copies of the Request for Arbitration: (i) a copy for the Respondent; (ii) three copies for the arbitrators should the Court decide to appoint three arbitrators; and (iii) a copy for the Secretariat. The exhibits are also enclosed. G. Payment of the filing fee 61. In accordance with Article 4(4)(b) and Article 1 of Appendix III of the Rules, we annex to this Request as Exhibit C-6 a receipt confirming the wire transfer for an amount of USD 3,000 made as payment of the required filing fee. Yours faithfully, [*] On behalf of [Claimant] 12 2089600.2 APPENDIX CLAIMANT’S EXHIBITS C-1: Power of Attorney. C-2: Contract for the Supply of 11.000 tons (eleven thousand tons) conductor AAAC 1055 MCM between [Claimant] and [Respondent], dated [*]. C-3: Notice of Termination of the Contract by [Claimant], dated [*]. C-4: [Claimant]’s Estimated Costs and Damages to Date, dated 2 [*]. C-5: [Respondent]’s response to [Claimant]’s Notice of Termination, dated [*]. C-6: Receipt confirming the wire transfer of USD 3,000 to the International Chamber of Commerce as payment of the filing fee, dated [*]. 13 2089600.2
