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- Headnote
- Decision [eng]
- List of Abbreviations and Defined Terms
- I Introduction and Parties
- II Procedural History
- III Factual Background
- IV Summary of the Parties’ Claims and Requests for Relief
- 161
- A The Claimant’s Position
- (1) Jurisdiction
- a The Supreme Court Judgment does not Deprive the Tribunal of Jurisdiction
- b Karkey Made its Investment in Conformity with Pakistani Law
- 167
- 168
- 169
- 170
- 171
- (b.1) Karkey did not Secure Its Investment through Misrepresentation and Fraud
- (b.2) Karkey did not breach Pakistan’s procurement laws or international procurement norms
- (b.3) Karkey did not secure its investment through corruption
- (b.4) Pakistan’s disregard of its obligations under the Contract and Sovereign Guarantee constitute breaches of the BIT
- (2) Attribution
- (3) Merits
- a The Supreme Court Judgment Does Not Insulate Pakistan from Liability for Breaches of the BIT
- b Pakistan’s has breached its BIT obligations, including those incorporated through the MFN clause
- c Pakistan’s Failure to Perform its Contractual Obligations Violated the BIT (Umbrella Clause)
- d The Supreme Court Judgment Violated Pakistan’s BIT Obligations
- e Pakistan’s Actions in Alleged Implementation of the Judgment Also Breached Pakistan’s BIT Obligations
- f Pakistan’s Obstruction of the Tribunal’s Provisional Measures Order Violated Pakistan’s Obligations under the BIT
- (4) Damages
- 220
- a Key Legal Issues and Standards
- b Karkey’s Heads of Loss, and Key Factual and Quantum Issues
- 234
- 235
- (b.1) Unpaid Invoices and Termination Charges
- (b.2) Transport and Mobilization Costs under Clause 4.6(b) of the Contract
- (b.3) The Appropriate WACC
- (b.4) The Kaya Bey and Alican Bey Losses
- (b.5) Cash Flow Impairment and Financial Constraint
- (b.6) The Delayed Construction and Rehabilitation of Karkey’s Powerships
- (b.7) The Delay to the Geothermal Project
- (b.8) Cost Increases
- (b.9) Kaya Bey Repair Costs
- (b.10) Wasted Costs
- (b.11) Interest
- (5) Counterclaim
- (6) The Claimant’s Request for Relief
- (1) Jurisdiction
- B The Respondent’s Position
- (1) Jurisdiction
- a Issue 1: Was Karkey’s investment established in accordance with Pakistani law, as required by Article I(2) of the Treaty?
- (a.1) Issue 1.1: What is the correct legal standard for determining the Tribunal’s jurisdiction pursuant to Article I(2) of the Treaty?
- (a.2) Issue 1.2: In determining jurisdiction under Article 41(1) of the ICSID Convention, what role does Pakistani law play?
- (a.3) Issue 1.3: Was Karkey’s investment established in breach of Pakistani procurement laws in breach of Article I(2) of the Treaty?
- (a.4.(1)) Issue 1.4(1): Was Karkey’s investment established by way of fraud in breach of Article I(2) of the Treaty?
- (a.4.(2)) Issue 1.4(2): Was Karkey’s investment established by way of corruption in breach of Article I(2) of the Treaty?
- (a.5) Issue 1.5: Is Pakistan estopped from raising its jurisdictional objections?
- b Issue 2: Does Karkey’s alleged investment meet the requirements of Article 25(1) of the ICSID Convention and Article I of the Treaty?
- a Issue 1: Was Karkey’s investment established in accordance with Pakistani law, as required by Article I(2) of the Treaty?
- (2) Attribution
- (3) Merits of Karkey’s Claims under the Express Terms of the Treaty
- (4) Merits of Karkey’s Additional Claims Brought under the MFN Clause
- a Issue 7: Does the Tribunal have substantive jurisdiction over Karkey’s Additional Claims?
- b Issue 8: Has Pakistan failed to accord Karkey fair and equitable treatment?
- c Issue 9: Has Pakistan acted in an arbitrary and unreasonable manner?
- d Issue 10: Has Pakistan breached its obligations under the “umbrella” clause of the Lebanon-Pakistan BIT?
- e Issue 11: Has Pakistan failed to accord Karkey full protection and security?
- (5) Damages
- 409
- 410
- a Issue 12: Applicable legal standards to Karkey’s claim for damages
- b Issue 13: Key differences between Mr. Haberman and Mr. Kaczmarek’s DCF models
- c Issue 14: Losses claimed in respect of the Alican Bey
- d Issue 15: Losses claimed in respect to the Kaya Bey
- e Issue 16: Consequential losses
- f Issue 17: Claim for Post-Termination Contract Rights
- (6) Pakistan’s Counterclaims
- a Issue 18: Does the Tribunal have jurisdiction to hear the counterclaim?
- b Issue 19: If the Tribunal has jurisdiction over Karkey’s claims, does Karkey owe money to Pakistan as a result of its conduct in the procurement of its alleged investment?
- c Issue 20: If the Tribunal has jurisdiction over Karkey’s Contract Claims, and if the relevant actions of Lakhra are attributable to Pakistan, does Karkey owe money to Pakistan as a result of Karkey’s misrepresentations and breaches of the 2009 RSC?
- (7) The Respondent’s Request for Relief
- (1) Jurisdiction
- V The Tribunal’s Decision
- 489
- A Is Karkey’s “Investment” Tainted by Corruption?
- B The Effect of the Supreme Court’s Judgment
- C Attribution
- D Jurisdiction
- 598
- 599
- 600
- 601
- (1) Was Karkey’s Alleged Investment Established By Way of Fraud or Misrepresentation in Breach of Article I(2) of the Treaty?
- (2) Was Karkey’s Alleged Investment Established By Way of Misprocurement in Breach of Article I(2) of the Treaty?
- (3) Does Karkey’s Alleged Investment Meet the Jurisdictional Requirements of Article 25(1) of the ICSID Convention and Article I of the BIT?
- E Did Pakistan Expropriate Karkey’s Investment in Breach of Article III of the Treaty?
- F Did Pakistan Breach Article IV of the Treaty (Free Transfer)?
- G The Claimant’s Additional Claims
- H Damages
- (1) Legal Standard
- (2) Karkey’s Request for Post-Termination Contractual Rights: (a) Termination Charges; (b) Unpaid invoices; and (c) Mobilization and Transport Charges
- 676
- 677
- 678
- 679
- a Termination Charges
- b Unpaid Invoices
- 705
- (b.1) Outstanding Monthly Rental Services Fees
- 706
- 707
- 708
- 709
- (1.1) Is Karkey entitled to seek recovery for the sums invoiced by Karpak?
- (1.2) Was Lakhra entitled to liquidated damages, thus reducing the amount owed?
- (1.3) Was Lakhra entitled to reduce the rental term of the 2009 RSC, thus reducing the amount owed?
- (1.4) Was Karkey entitled to recover amounts even when it was not generating at full capacity?
- (b.2) Outstanding Fuel Payment Invoices
- (b.3) The Tribunal’s conclusion
- c Mobilization and transport charges
- (3) Damages related to the Kaya Bey
- 764
- a Is Karkey entitled to Cost Repairs of the Kaya Bey?
- b Is Karkey entitled to loss of profits related to the Kaya Bey?
- c Calculation of the lost profits related to the Kaya Bey
- 793
- 794
- 795
- 796
- 797
- (c.1) The Discount Rate: WACC
- (c.2) The But For Scenario
- 817
- 818
- 819
- (2.1) Contracts Assumed Under the Hypothetical or But for Scenario
- (2.2) Time between Contracts
- (2.3) Unit Price
- (2.4) Site installation costs
- (2.5) Corporate Tax Rate — Tax Optimization
- (2.6) Retrofitting of turbochargers
- (2.7) Lost profits shall be calculated until June 2015 or December 2015?
- (2.8) Tribunal’s conclusion on the But For Scenario
- (c.3) The Actual Scenario
- (c.4) The Tribunal’s Conclusion
- (4) Damages related to the Alican Bey
- (5) Other Detained Vessels: Enis Bey and the Iraq
- (6) Delay Damages
- 897
- a The Construction Program
- (a.1) Has Pakistan’s breach to the BIT caused delays to the Claimant’s Projects due to financial constraints?
- (a.2) Damages calculation
- b The Rehabilitation Program
- c The Geothermal Project in Turkey
- (7) Costs increases
- (8) Wasted Costs
- (9) Interest Rate
- (10) Summary of the Amounts due to Karkey and Application of Interest
- I Pakistan’s Counterclaims: Does the Tribunal have Jurisdiction to hear the Counterclaims?
- VI Costs
- A Summary of the Parties’ Positions
- B The Tribunal’s Decision on Costs
- VII Award
- Decision PDF [eng]
- [35.175.107.142]
- 35.175.107.142
