TERMS OF REFERENCE ARBITRATION ICC N° 20663/MHM

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1

TERMS OF REFERENCE

ARBITRATIO N ICC N ° 20663 / M H M

I n the m atter of a n a rbitration under the Rules of Arbitration of the

I nternational Cha m ber of Com m erce i n force as from 1 January 2 0 1 2

between

TMCO LTD. (Bu lgaria )

Cla imant

a nd

GREEN LIG HT E N E RGY SOLUTIONS CORP. ( U n ited States of America)

Respondent

1720/1-ICC No. 20663 1 20150321 TOR for signature .rtf

Case 4:17-cv-00997-KAW Document 1-4 Filed 02/27/17 Page 56 of 148

TABLE OF CONTENTS

1 . Table o f contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. Identification of the parties . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . • • . . . . . • . . . . 3

3. Identification of the Arbitrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

6 4. Identification of the ICC Management Team . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . •: . . . . . . . , . . , . , , , . . . . . . . . . . . . . . . . . . 3

7 s. Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

8 6. Documentary evidence produced by the parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

9 6.1 . Documentary evidence produced by TMCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

10 6.2. Documentary evidence produced by GLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1 1 6.3. Issues raised by the Arbitrator on the documentary evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

12 6.4. Rule on the languages of the documentary evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1 3 7 . Expert evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

14 7 .1 . GLES' submission on expert evidence and TMCo's position . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1 5 7.2. Rule on expert evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

16 8. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

17 8 . 1 . Procedure done . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

18 8.2. Procedure to do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

19 9. Dispute resolution : Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

20 10, Place and language of the Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2 1 1 1 . Legislation and rules o n the proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

22 1 1 . 1 . Legislation and rules on the proceedings Invoked by the parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

23 1 1 . 2 . Rules on the proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 24 12. Legislation and rules on the merits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

25 1 2 . 1 . Legislation and rules on the merits Invoked by TMCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

26 12.2. Legislation and rules on the merits Invoked by GLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

27 12 .3 . CISG, Vienna Sales Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

28 12.4. Amiable compositeur / decisions ex aequo et bona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 29 13. Facts as set forth by the parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

30 1 3 . 1 . Facts as set forth by TMCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3 1 13.2. Facts a s set forth b y GLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

3 2 14. Summary of the parties' cla!ms . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

3 3 14. 1 . TMCo's claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

34 14.2. GLES' claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

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15. Relief sought and amounts claimed by the parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . 17

15 .1 . Relief sought and amounts claimed by TMCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

15. 2. Relief sought and amounts claimed by G LES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

16. Costs of the arbitration, taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . , 19

17. Issues to be determlned , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

18. Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20



: :',IPENTIFICATION OF THE PARTIES

co Ltd., a company incorporated under Bulgarian Law, with registered office in BG-5030 �belets, P.O. Box 17, Bulgaria, Industrial Zone, registered with the Veliko Tarnovo Regional Court

,':\6lider the number 940/2007., hereinafter "TMCo".

Represented by Mr. Tom SCHOORS and Mr. Paul VANASSCHE, both lawyers at ALLEN & OVERY LLP, with office in B-2600 Antwerp, Belgium, Uitbreidlngstraat 72/3. ,.

Against:

9 Green Light Energy Solutions Corp., a company incorporated under Californian law under 10 company number C-3255171, with Its registered office in CA941 1 1 San Francisco, U.S.A., 220 1 1 Lombard street Ste 823, registered under the number C3255171 1 hereinafter "GLES"

12 Respondent

13 Represented by Mr. John D. NELSON, CA State Bar #72089, with office at CA94401 San Mateo, 14 U.S.A., Peninsula Avenue 444, suite 3.

15 3. IDENTIFICATION OF THE ARBITRATOR

16 The arbitrator appointed by the International Chamber of Commerce (hereinafter "ICC") 1 7 International Court o f Arbitration on 5 February 2015 i s Mr. Johan LAMBERS, sole arbitrator, with 18 office at IUSTICA.BE, B-1050 Brussels, Louizalaan 109, hereina�er "the Arbitrator". The file was 19 transmitted to the Arbitrator on 06 February 2015.

20 4. IDENTIFICATION OF THE ICC MANAGEMENT TEAM

2 1 ICC case management team I n charge of the case: 22 Ms Marla Hauser-Morel, Counsel . . . . . . . . . . . . . . . . . . . . . . . . (direct dial number: +33 1 49 53 30 90) 23 Ms Alina Leoveanu, Deputy Counsel . . . . . . . . . . . . . . . . • . . (direct dial number: +33 1 49 53 30 91) 24 Ms Darya Shirokova, Deputy Counsel . . . . . . . . . . . . . . . . . (direct dial number: +33 1 49 53 30 97) 25 Ms Daniela Kalinski Pillault, Assistant . . . . . . . . . . . . . . . . . . (direct dial number: +33 1 49 53 30 94) 26 Mr Mohammed Safyan, Assistant . . . . . . . . . • . . • . . . . . . . . . . (direct dial number: +33 1 49 53 30 93) 27 Mr Victor de Benito, Assistant . . . . . . . . . . . . . . . . . . . . . . . . . . . . (direct dial number : +33 1 49 53 28 80) 28 29 Fax number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . +33 1 49 53 57 99 30 Email address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [email protected] 3 1

3 2 5. COMMUNICATION

33 The Arbitrator will communicate with the parties and their representatives by e-mail. The followlng 34 e-mail addresses will be used :

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36 37 38

39 40 41 42

43 44 45

For the Arbitrator:

o [email protected]

For TMCo :

o [email protected] o [email protected]

For GLES:

o [email protected] o [email protected] o [email protected]

1720/!-ICC No. 20663 3 20150321 TOR for signature .rtf


For the ICC :

3 o [email protected]

4 If required, communication by (registered) mail to the Claimant or Respondent will be sent to the 5 addresses mentioned under section "Identification of the parties"); their representatives will 6 receive a scanned copy by e-mail.

7 For conference calls1 the Arbitrator and the parties shall use the program Skype. The parties' Skype 8 information is :

9 For the Arbitrator: lambersjo

10 For GLES: John.nelson.law

1 1 For TMCo: hraobelgium

1 2 6, DOCUMENTARY EVIDENCE PRODUCED BY THE PARTIES

13 6.1. Documentary evidence oroduced bv TMCo

14 28 November 2014 - Request for arbitration (p .11) :

15 ( 1 ) The Contract, including the "Special terms of Sale of Products N°1" and "Specification 16 N° 1" between TMCo and GLES dated 6 February 2012;

17 (2) Invoice for pipes produced for third set of Products dated 24 February and 4, 20 and 27 1 8 April 2012 with English translation;

1 9 (3) Notice of manufacturing completion dated 20 July 2012;

20 (4) Letter from TMCo to GLES dated 27 July 2012;

21 (5) Email from Alex Feerer (GLES) to TMCo dated 25 October 2012;

22 (6) Letter from GLES to TMCo dated 20 November 2012;

23 (7) Email from TMCo to GLES dated 22 November 2012;

24 (8) Amendment to the Contract between TMCo and GLES dated 22 November 2012;

25 (9) Email from Phillipe Rombaut (director of TMCo) to Alex Feerer (President of GLES) 26 dated 27 November 2012;

27 (10) Letter from TMCo to John D. Nelson, Esq. (attorney and director of G LES) dated 27 28

29 30

31

32

33

November 2012;

(lObls) Letter from TMCo to GLES dated 18 December 2012 (second notice of manufacturing completion);

( 1 1 ) Email from TMCo to Dennis Zagorsky (GLES) dated 30 January 2013;

(12) Letter from GLES to TMCo dated 30 January 2013;

(13) Email from TMCo to G LES dated 19 February 2013;

34 (14) Letter from GLES to TMCo dated 22 November 2013;



--------"'-----�-----------�---- ---·---

Letter from Tom Schoo rs and Paul Vanassche to GLES dated 22 January 2014;

Letter from GLES to TMCo dated 20 March 2014;

Pro forma invoice 393 for the first set of Products dated 24 Marcl1 2014;

Pro forma invoice 394 for the second set of Products dated 24 March 2014;

5 (19) Letter from Tom Schoors and Paul Vanassche to GLES dated �5 April 2014;

6 (20) Letter from Tom Schoors and Paul Vanassche to GLES dated 20 June 2014;

7 (21) Calculation of TMCo's profit margin per set of Products, not dated."

8 6.2. Documentary evidence produced by GLES

9 25 February 2015 - Respondent's Answer to Request for Arbitration (p. 6): Inventory of Exhibits

10 Group Exhibit A:

1 1 12

13 14

15 16 17 18

19 20

21

A- 1 .

A-2.

A-3.

A-4.

A-5.

13 April 2012 email from Dennis Zagrosky to Mr. Dlmov attaching the drawings for the Screw conveyors corrections (2 page email).

Second page of 13 April 2012 email from Dennis Zagrosky to Mr. Dimov (drawings for the Screw conveyors corrections).

20 March 2012 e1nail from Hr. Dimov, (TMCo Ltd .) to Dennis Zagrosky requesting the drawings with the changes In the screw conveyors and 21 February 2012 email from Dennis Zagrosky to Hr. Dimov (TMCo Ltd.) regarding the new version of the gas pipelines. (3 page email).

Continuation of the above communications and confirmation that the changes In the screw conveyors refers to the last blade of the last section of screw conveyors only.

Irrelevant except as to identification of some of the parties.

22 Group Exhibit B:

23 24

B-1. Through and Including B-6: Specifications and drawings regarding the changes to the right and left screw conveyor assemblies.

25 Group Exhibit C: Email communications from Phillippe Rombaut, owner of Claimant, In his 26 attempt to show tl1e work done to complete sets one and two as per his claims In the Request for 27 Abritration herein.

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29

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31

32 33

C-1. Photograph of screw conveyors.

C-2. Cover sheet.

C-3. Photograph of one main burner unit only.

C-4. Photograph showing what may or may not be two unloadlng unlts.

c-s. Photograph showing one loading unit and parts only of the second one - which appears to have no drive motor.



1 6.3. Issues raised by the Arbitrator on the documentary eyidence

2 TMCo's exhibit 1 - The Contract, including the "Special terms of Sale of Products N ° 1 " 3 and "Specification N° 1 " between TMCo and GLES dated 6 February 2012 : The Russian 4 version does not accurately correspond to the English version.

5 TMCo's exhibit 5 - Email from Alex Feerer (GLES) to TMCo dated 25 October 2012: The 6 Russian version does not accurately correspond to the English version.

7 TMCo's exhibit 7 - Email from TMCo to GLES dated 22 November 2012 : The Russian version 8 does not accurately correspond to the English version.

9 TMCo's exhibit 8 - Amendment to the Contract between TMCo and GLES dated 22 10 November 2012: The Russian version does not accurately correspond to the Engllsh version.

1 1 TMCo's exhibit 17 - Pro forma invoice 393 for the first set of Products dated 24 March 1 2 2014 : The exhibit i s i n Butgar!an and i n English. The Arbitrator has no adequate proficiency in 1 3 Bulgarian to verify whether the Bulgarian version accurately corresponds to the English version.

14 TMCO's exhibit 1 8 - Pro forma invoice 394 for the second set of Products dated 24 March 1 5 2014: The exhibit i s in Bulgarian and i n English. The Arbitrator has no adequate proficiency in 1 6 Bulgarian t o verify whether the Bulgarian version accurately corresponds to the Engllsh version.

17 GLES' exhibit 81 Through and including B-6 - Specifications and drawings regarding the 18 changes to the right and left screw conveyor assemblies: the document Is In Russian.

19 6.4. Rule on the languages of the documentary evidence

20 "Official" (certified) translations In English, the language of the Arbitration, are not required.

21 Parties will provide their own translation of their exhibits wlthout English version, in or with their 22 first submissions followlng the terms of reference in accordance with section 8.2 "Procedure to do" 23 and section 1 1 . 2 "Rules on the proceedings".

24 In the exhiblts with an original English version and an original version in another language (at this 25 point of time Russian and Bulgarlan), the English version will prevail .

26 7, EXPERT EVIDENCE

27 7.1. GLES' submjssion on expert evidence and TMCo's position

28 In his e-mail of 1 1 March 2015 to Mr. VANASSCHE, with CC to the Arbitrator, Mr. NELSON 29 proposed to Mr. VANASSCHE (emphasis added) "that a competent expert be retained to examine 30 the two completed sets of work at TMCo to see if they are compliant with the specifications, as 31 amended. This will go a long way toward resolution of this matter. 32 I would suggest that we get someone from SGS, who do inspections, certification and verification, 33 and are one of the oldest and most respected testing companies in the world. The.Ir headquarters 34 (as I am sure you know) are in Geneva and they have branches and representatives In virtually 35 every country in the world. My client will not consent to anyone from Bulgaria, but one of the 36 representatives from Germany or England would be perfectly acceptable. 37 Please discuss this with your client and get back to me at your conve'1ience. Their representative 38 can act as an independent expert, under appointment from Mr. Lambers, the sole 39 arbitrator, if we all agree to terms. It seems to me a good way to save time and money for aJJ 40 Involved. "

4 1 I n his e-mail of 1 3 March 2015 to the Arbitrator, Mr. VANASSCHE reacts t o GLES' a s follows: "This 42 email is only a response to the email below" (from the Arbitrator) "and not a response to Mr. 43 Nelson's email of 11 March 2015 which in our view is not part of the draft terms of reference. 11



1 In his e-mail of 15 March 2015 to the Arbitrator, Mr. NELSON elaborates "We will need limited 2 discovery to properly resolve this case. Since the equip1nent which is referenced in the Request for 3 Arbitration and Answer can hardly be brought to the place of the Hearing, I have requested a 4 jointly agreed expert be elected to answer the question - were the first two sets of product 5 completed and were they manufactured to specification? While Claimant's Counsel properly 6 excluded this matter in his Response to issues in the TOR, the issue of discovery is not part of the 7 TOR and, I respectfully submit, needs to be raised. "

8 In his e-mail of 20 March 2015 to the Arbitrator, Mr. VANASSCHE states that "parties do not jointly 9 agree to examine the two completed sets of work at TMCo. Claimant con�ders the appointment of

10 an expert to be an item to be discussed in the course of the proceedings, Hence, Claimant accepts 11 that parties will debate the issue of expert evidence in accordance with section 8.2 and section 12 11.2. " 13 In his email of 20 March 2015 to the Arbitrator, Mr. NELSON states that "As to his (Mr. 14 VANASSCHE) comments on Expert Evidence, it appears that he does not wish to st;pu/ate to a 15 jointly selected expert a t this time to determine whether the work claimed done by his client was 16 up to specification, and wants to argue about this later. You may include his comments in the 1 7 TOR. We are ready at this end, to sign it as amended by his comments.

18 However, should we not be able to agree on the appointment of an expert, that will mean both 19 sides will need to put on expert testimony, and as a practical matter that will mean tha t 20 Respondent will have to be given a limited discovery inspection right by Order of the Arbitrator or 21 the Court. Otl1erwise the arbitration will be pointless. Respondent therefore reserves the right to 22 have an expert examine the two sets of product before the hearing can be allowed to proceed. 23 Tile sooner the better, as without It, submissions will be only meaningless nonsense. As a practical 24 1natter, I would ask Mr. Vanassche whether or not he is wi/Jing to discuss this matter now, rather 25 than "debate" it later. I see nothing of merit to "debate".

26 7.2. Rule on expert evidence

27 The parties do not agree to jointly "examine the two completed sets of work at TMCo", so that they 28 will debate the issue of expert evidence In accordance with section 8.2 "Procedure to do" and 29 section 1 1 .2 "Rules on the proceedings".

30 In case the parties should in the course of the arbitration proceedfngs agree to jointly "examine the 3 1 two completed sets of work at TMCo ", but do not come to a n agreement on retaining a competent 32 expert, the ICC Court and/or the Arbitrator are available for the appointment of such expert.

33 8. PROCEDURE

34 8.1. Procedure done

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28 November 2014 - Request for Arbitration, filed for TMCo by Ms Denka Toncheva, Mr. SCHOORS and Mr. VANASSCHE; 21 January 2015 - Request from Mr. NELSON to extend GLES' time limit to submit its Answer; 27 January 2015 - Second request from Mr. NELSON to extend GLES' time limit to submit its Answer; 27 January 2015 - E-mail from Mr. SCHOORS and Mr. VANASSCHE, with agreement on behalf of TMCo to extend GLES' time llmlt to submit its Answer until 27 February 2015;

06 February 2015 - Transmission of the file to Mr. Johan LAM BERS, appointed as sole arbitrator; 20 February 2015 - Draft of Terms Of Reference;

· 25 February 2015 - GLES' Answer to Request for Arbitration; 09 March 2015 -Draft of Terms Of Reference; 1 1 March 2015 - E-mail from Mr. NELSON to Mr. VANASSCHE; 13 March 2015 - E-mail from Mr. VANASSCHE to the Arbitrator; 15 March 201S - E-mail from Mr. NELSON to the Arbitrator; 19 March 2015 - Draft of Terms of Reference; 20 March 2015 - e-mail from Mr. VANASSCHE; 20 March 2015 - e-mail from Mr. NELSON.

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1 8.2. Procedure to do

2 06 Aprll 2015 - Deadline for signing the terms of reference 3 20 May 2015 - First submissions for TMCo 4 06 July 2015 - First submissions for GLES 5 27 July 2015 - Second and all-Inclusive submissions for TMCo 6 17 August 2015 - Second and all-inclusive submissions for GLES 7 31 August 2015 - Fina I and all-Inclusive submissions for TMCo 8 14 Septen1ber 2015 - Final and all-inclusive submissions for GLES 9 28 September 2015 - Hearing '

10 5 October 2015 - Submissions for both parties regarding their claims and relief sought with 1 1 respect to the costs of arbitration 12 26 October 2015 - Award

13 9. DISPUTE RESOLUTION : ARBITRATION

14 According to the Request for Arbitration (p. 10) and the Respondent's Answer to the Request for 1 5 Arbitration (p.3), the competence of the Arbitrator i s based o n a contract named "Contract n°9", 16 entered into on 6 February 2012 In Moscow between TMCo and GLES (herelnafter

'"the Contract").

17 The Contract contains an arbitration clause (art. 14), stating:

18 "14.2. If mutual agreement was not attained, disputes shall refer for handling and final approval 19 to Arbitration.

20 14.3. Parties agree to the process of handling and approval of disputes under the legislation of 21 the European Union In effect at the time of arbitration.

22 14.4. In the event of dispute, arbitration shall be final and obligatory for both parties; The place 23 of arbitration is the British Chamber of Commerce, London, Great Britain. Arbitration language 24 is English.

25 14.5. The material law subject to the Contract is the legislation of Belgium. "

26 10. PLACE AND LANGUAGE OF THE ARBITRATION

27 According to the Request for Arbitration (p. 10) and the Respondent's Answer to Request for 28 Arbitration (p.3), the place of the Arbitration is based on a contract named "Contract n°9", entered 29 Into on 6 February 2012 In Moscow between TMCo and GLES (hereinafter "the Contract"). The 30 Contract contains an arbitration clause (art. 14), stating :

31 "14.4. In the event of dispute, arbitration shall be final and obligatory for both parties; The 32 place of arbitration is the British Chamber of Commerce, London, Great Britain. Arbitration 33 language Is Engffsh."

34 Article 18.2 of the ICC Rules of Arbitration states:

35 "The arbitral tribunal may, after consultation with the parties, conduct hearings and meetings at 36 any location It considers appropriate, unless otherwise agreed by the parties. "

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Accordingly, the place of arbitration Is London (England, United Kingdom). Meetings and/or hearings may be conducted In Brussels (Belgium). The language of arbitration is English.

39 11. LEGISLATION ANP RULES ON THE PROCEEDINGS

40 11.1. Legislation and rules on the oroceedinqs jnvoked by the parties

41 No legislation nor rules on the proceedings are specifically invoked by the parties.

42 11.2. Rules on the proceedings

43 The ICC Rules of Arbitration of arbitration are applicable to proceedings.



, }

1 Article 19 of the ICC Rules of Arbitration :

2 "The proceedings before the arbitral tribunal shaJI be governed by the Rules and, where the 3 Rules are silent, by any rules which the parties or, failing them, the arbitral tribunal may 4 settle on, whether or not reference is thereby made to the rules of procedure of a national 5 law to be applied to the arbitration".

6 Neither article 14 of the Contract signed by the parties, nor TMCo's Request for Arbitration, nor 7 GLES' Answer to Request for Arbitration, indicate which rules, other than the ICC Rules of 8 Arbitration, should apply to these proceedings.

c 9 In the spirit of article 23.4 ICC Rules of Arbitration, the parties have submitted or completed their

10 relief sought, In first or principal order, as well as in second or subordinate order and possible 1 1 further orders, In these terms o f reference and their subsequent submissions will b e limited to 1 2 claims supporting their respective relief sought.

13 The parties will submit their evidence, not yet presented in the terms of reference, at the latest, 14 with their first submissions following the terms of reference. Evidence submitted with second or 15 final submissions will be limited to evidence provided in response to the other parties' claims.

16 The parties will present their claims and relief sought with respect to the costs of arbitration in 17 written submissions at the latest on 5 October 2015.

18 12. LEGISLATION AND RULES ON THE MERITS

19 12.1. Legislation and rules on the merits invoked by TMCo

20 According to the request for arbitration (p. 10) the application of material law is subject to: Article 2 1 14.5 o f the Contract : "The material Jaw subject to the Contract is the legislation o f Belgium . "

2 2 In the request o f arbitration, articles 1184, 1149 and 1151 o f the Belgian Civil Code are specifically 23 invoked.

24 12.2. Legislation and rules on the merits invoked by GLES

25 According to the Respondent's Answer to Request for Arbitration (p.3), GLES agrees with the 26 arbitration agreement and with the Request : "to wit - Belgian law [civil code] to be the law 2 7 applied ( . . .) "

28 12.3. CISG. Vienna Sales Convention

29 Parties have not expressly excluded the United Nations Convention on Contracts for the 30 International Sale of Goods (CISG, Vienna Sales Convention, www.uncitral.org) approved by the 31 Belgian Law of 4 September 1996, but submit that the CISG may not cover their contractual 32 relationship.

33 As the case may be, parties will further debate the issue In their submissions.

34 12.4. Amiable compositeur I decisions ex aeguo et bono

35 Parties do not agree to confer upon the Arbitrator the power to act as amiable compositeur and/or 36 to decide ex aequo et bona in application of article 23.1 g) of the ICC Rules of Arbitration.

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13. FACTS AS SET FORTH BY THE PARTIES

13.1. Facts as set forth by TMCo

39 28 November 2014 - Request for arbitration (pp. 2-5) :

40 ''(a) The Parties and the contractual framework

41 TMCo Is a Bulgarian company specialising in heavy machine-building.

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GLES is a US company specialis!ng in "turn-key" waste processing facilities.

( i) The original Contract

After several meetings In Debelets and Moscow, the Parties signed a contract on 6 February 2012 (the Contract) under which TMCo was to produce and GLES was to purchase from TMCo equipment parts (the Products), specifically designed as part of a system for a waste conversion pyrolysis machine (exhibit 1) .

On the same date (6 February 2012), the Parties also signed a document entitled "Special terms of Sale of Products N° 1" (Special Terms N° 1) and a document entitled "Specification N° 1" (Specification N° 1; exhibit 1), forming part of the Contract (unless otherwise specified, a reference in this Request for Arbitration to the 'Contract' Includes the Special Terms N° 1 and Specification N° 1 ) .

The Products were to be produced and delivered in 1 4 identical sets (batches). Each set of Products could be used in an individual waste converslon pyrolysis machine:

The price per set of Products was set at EUR 346,123.75, amounting to a total contract price For the 14 sets of EUR 4,845,732.50 (Article 3.1 of the Contract and article 1 of Specification N° 1) . These prices were excluslve of any shipment costs (Article 2.4 of the Contract).

The Products were to be del lvered as follows:

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the first set of Products was to be delivered by 30 April 2012;

the second set of Products was to be delivered by 31 May 2012; and

the remaining sets of Products were to be delivered between June 2012 and December 2013 (article 2 of Specification N° 1).

The Products were to be delivered and purchased in accordance with Jncoterms (2010)

EXW Bulgaria Debelets.

Upon completion of a set of Products, TMCo was to produce a 1wrltten notice of manufacturing completion' (Article 4.3 of the Contract). Wlthln 10 calendar days from receipt of TMCo's written notice of manufacturing completion, GLES was required to send a 'written notice of acceptance of Products' specifying the date of arrival for the loading of the Products (Article 4.4 of the Contract). This date of arrival for the loading of the Products had to be within 15 calendar days from receipt of TMCo's 1written notice of manufacturing completion' (Article 5.3 of the Contract). GLES was to accept the Products at TMCo's factory (Article 5.2 of the Contract) in line with the agreed Incoterms (2010) EXW Bulgaria Debelets.

For each set of Products, GLES was required to pay an advance of 25°/o prior to TMCo initiating the manufacturing process; the balance (75°/o) was payable within five days of receiving a •written notice of manufacturing completion', as provided In artlcle 3 of Specification N° 1 :

"3.1 Advance (25%) and balance payment (75°/o) have to be made In accordance

with the production schedule.

3.2 The balance payment of each set of goods, Buyer shall pay to Seller within five

days of receiving the written notice of set of goods manufacturing completion. "



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Article 3.2 of the Contract specifically provides:

"If Buyer refuses the manufactured load of proper quality Products, due any

reason, Buyer Is not relieved of the obligation to pay for the produced sets. 11

Moreover, Article 12.2 of the Contract provides that liquidated damages are payable by GLES In the event of late payment:

"Buyer pays Seller a fine of 0. 1 % of the deferred pqyment for every day of

expiration for violation of timeframe for payment under the terms of this Contract. "

(i i) Performance of (part of) the original Contract

Under the Contract, GLES paid the advance payment of EUR 86,530.94 for the first set of Products on 7 February 2012. Upon GLES' payment of the advance, TMCo started producing the first two sets of Products. Production of the second set was started before an advance was paid for efficiency reasons. During this initial production phase, GLES requested some modifications to the design of the Products, which led to a delay in the manufacturing process for the first two sets of Products.

In July 2012, TMCo successfully completed manufacturing the first two sets of Products. On 20 July 2012, TMCo sent a 'written notice of manufacturing completion' in accordance with Article 4.3 of the Contract, inviting GLES to send its instructions for acceptance and transport of these two sets of Products (exhibit 3).

In this context, TMCo purchased and paid Its subcontractor "Centromet" EUR 103,400.401 for materials (pipes) to be used for the first three sets of Products (exhibit 2, see also the reference to pipes purchased at suppl!ers for the third set of products in exhibit 7). This amount corresponds to EUR 34,466.80 per set.

In accordance with article 3.2 of Specification N° 1 , GLES was requi red to pay the balance for these first two sets of Products within five days of receipt of the 'written notice of manufacturing completion', ie by 25 July 2012.

However, GLES failed to comply with Its payment obligations and did not send a 'written notice of acceptance of Products' to TMCo.

As GLES had failed to comply with its contractual obligations, TMCo sent a written notice on 27 July 2012 urging GLES to fulfil its obligations under the Contract ( exhibit 4).

In its letter dated 20 November 2012, GLES stated that it did not decline responsibility for its obligations under the Contract, but requested an additional reasonable term to fulfil Its obligations (exhibit 6).

At that point, still believing GLES' good faith Intention to properly perform the Contract, TMCo decided to grant GLES an additional reasonable term to fulfil Its obligations for the remaining sets of Products.

1 Exhibit 2 contains:

(Ill) The amendment to the Contract

(i) an Invoice dated 27.04.2012 for an amount of 55,891.80 Bulgarlan Lev, {JI) an !nvofce dated 20.04.2012 for an amount of 48,307.50 Bulgarian Lev, (HJ) an Invoice dated 04.04.2012 for an amount of 47,475.90 Bulgarian Lev, and (Iv) an Invoice dated 24.02.2012 for an amount of 50,558.40 Bulgarian Lev. These Invoices amount to a total of 202,233.60 Bulgartan Lev or approxlmately EUR 103,400.40 (at an exchange rate of 1.95583 LEV/EUR).

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As GLES wished to add some addltional parts to each set of Products, TMCo wished to adapt the prices because of a rise in electricity prices in Bulgaria, and GLES was clearly unable to meet its payment deadlines, the Parties agreed on 22 November 2012 to an amendment to the Contract (the Amendment) (exhibit 8) which also allowed GLES an additional payment term for the remaining sets of Products. The delivery schedule set out in Specification N° 1 was adjusted as follows:

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the first set of Products was to be delivered by 31 March 2013;

the second set of Products was to be delivered by 30 April 2013; and

the remaining sets of Products were to be detrvered at a rate of two sets every month as of May 2013 (article 2 of Specification N° 1 ) .

Moreover, prices were adjusted to reflect ( I ) the price of the additional parts added to each set of Products ( l isted as parts 8 to 17 In the updated Specification N° 1) and (ii) the increase in electricity prices.

The price for the first set of Products (parts 1 to 7 as listed In the Specification N° 1) remained unchanged at EUR 346,123. 75. However, the price for the additional parts (parts 8-17 as listed in the updated Specification N° 1) of EUR 15,297.43 must be added to this amount. As a result, the total price for the first set of Products amounts to EUR

361,421.18.

The price for each of the remaining 13 sets was adjusted upwards to EUR 371,804.89. Hence, the total contract price for the 14 sets of Products was EUR 5,194,884.75 (le EUR 371,804.89 x 13 + EUR 361,421 . 18).

TMCo's profit margin amounts to EUR 72,041.98 for each set of Products (exhibit 21).

All other obllgations under the Contract remained unchanged.

on 18 December 2012, TMCo sent a new 'written notice of manufacturing completlon' for the first two sets of Products (exhibit 10bis).

(iv) Non-payment by GLES and its consequences

Despite numerous reminders and notices (exhibits 3, 4, 7, 9, 10, lObis, 11, 13, 15 and

19), TMCo has not received any further payment since the Initial advance of EUR 86,530.94 on 7 February 2012 for the first set of Products. This In spite of the fact that GLES has confirmed several times since then that It would continue to perform the Contract and pay any amounts due (exhibits 6, 12 and 16).

As a result of GLES' breach, TMCo suspended the production of the remaining 12 sets of Products.

GLES's refusal to fulfil its payment obligations is a material breach of Its contractual obligations. Moreover, in its letter dated 22 November 2013 (exhibit 14), GLES acted In a manner that could only be interpreted as indicating that It would no longer voluntarily perform Its obligations under the Contract. Although GLES has expressed the contrary In its communications of 25 October 2012, 30 January 2013 and 20 March 2014 (exhibits 6,

12 and 16), it has not acted accordingly.



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GLES refuses to perform the Contract, including taking delivery of, and paying for, the first two sets of Products that have already been manufactured.

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Hence, TMca··s suspension of its performance under the Contract, which it is entitled to do under Belgian law, has now become permanent and irreversible. This leaves TMCo with no other option but to resort to arbitration."

6 13.2. Facts as set forth by GLES

7 25 February 2015 - Respondent's answer to Request for Arbitration (p.2):

8 "Comments as to the nature and circumstances of the dispute and basis of claim

9 2. Claimant and Respondent entered into the Agreement, as described in the Request. The 10 relevant terms of the Agreement are set out in the Request. [See Ex. No. 1, Claimant.]

1 1 Respondent i s not obliged to make payn1ent for the Products proffered, a s Claimant has 12 failed to manufacture Products which conformed to the specification requirements set out 13 per Special Terms of Sale of Products No. 1, Specification No.1 to the Agreement, and the 14 correction drawings for the last blade of the screw conveyors. Accordingly no payment 15 obligation of Respondent ever arose.

16 For further facts supporting this defense, please see Affirmative Defense 6(a) below."

17 14. SUMMARY OF THE PARTIES' CLAIMS

18 14.1. TMCo's claims


20 "(a) Specific performance of one part and rescission of the other part of the 2 1 Contract

2 2 GLES' breach o f the Contract, in particular Its persistent failure to take def/very and pay for 23 the Products, goes to the heart of the Contract and amounts to a breach that is serious 24 enough to justify Its rescission (ontblnding/dissolution) under Belgian law (article 1 184 of 25 the Belgian Civil Code).

26 However, given that (/) the first two sets of Products have already been produced by TMCo 27 (and only one set has been partly paid for by GLES) and (ii) each set of Products can be 28 used for an individual waste conversion pyrolysis machine, TMCo requests that (i) this part 29 of the Contract (le the Parties' contractual obligations In relation to the first two sets of 30 Products) remains unaffected, {Ii) GLES Is ordered to perform its contractual obligations in 31 relation to the first two sets of Products, and (ill) the Contract Is rescinded as regards the 32 remaining 12 sets of Products.

33 On this basis, TMCo requests that GLES be ordered to pay the remaining sums due for the 34 first two sets of Products, being EUR 646,695.13 (EUR 361,421.18 (the full contractual 35 price for the first set of Products) minus EUR 86,530.94 (the advance payment for the first 36 set of Products) plus EUR 371,804.89 (the full contractual price for the second set of 37 Products)), as well as the liquidated damages for deferred payment under Article 12 .2 of 38 the Contract.

39 For the remaining 12 sets of Products, TMCo requests that the Arbitra/ Tribunal orders the 40 Contract rescinded wlth damages.



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A party claiming the resc1ss1on of its contract may, i n accordance with paragraph 2 of article 1184 of the Belgian Civil Code, also clalm additional compensatory damages. In the absence of any contractual provisions on compensatory damages In the agreement, the damages must be calculated in accordance with the civll law rules on contractual liabillty, as set out under articles 1149 to 1151 of the Belgian Civil Code,

By virtue of article 1149 of the Belgian Civil Code, a party who Js In breach of contract Is liable for any damage suffered by the other party, including expenses made (damnum

emergens) and loss of profits (lucrum cessans).

To determine the amount of damages, one must compare the patrimonial situation of the party suffering the damage with the patrimonial situation it would have been in had the damage not occurred, ie one must compare TMCo's current patrimonial situation with the patrlmonial situation it would have been in had the Contract been duly performed.

Compensation of damnum emergens includes compensation "for all costs incurred at the time of termination for the performance of the works, and for the works pefformed".2

Under Belglan law, TMCo is indeed entitled to compensation for all fixed and variable costs that it incurred In the actual performance of the contract, Including costs that It could not reasonably avoid.

In addition, TMCo Is entitled to compensation for lucrum cessans:

"In addition, the contractor is entitled to the profit it would have realized by performing the work (lucrum cessans). "3

On the basis of these principles, TMCo requests that GLES be ordered to perform Its contractual obligations in relation to the first two sets of Products.

In particular TMCo requests that the Arbitral Tribunal :

(I)

(i i)

(I i i)

orders GLES to take del ivery of the first two sets of Products in accordance with Article 5.2 of the Contract within 15 days after payment of the price and compensation as provided under (Iii), (iv), and (v) below;

If GLES falls to pay and to take delivery of these first two sets of Products In accordance with ( I) above within 30 days after the date of the Arbltral Award, allows TMCo to dispose of these first two sets of Products at its convenience and without any posslble claim or recourse by GLES;

orders GLES to pay EUR 646,695.13 to TMCo which is the agreed price for the first two sets of Products, (EUR 361,421.18 (the full contractual price for the first set) minus EUR 86,530.94 (advance payment for the first set) plus EUR 371,804.89 (the full contractual price for the second set));

(Iv) orders GLES to pay compensation to TMCo for late payment in accordance with Article 12.2 of the Contract, being 0.1% for every day of delay which Is EUR 646.70 (0.1% of the outstanding contract price of EUR 646,695.13) per day of delay until

? Free translation of the original Dutch 1cxt: "l'ooralle op he/ oge11hlik 1'011 de heiii11digillg 1•mirde uitroeri11g 1•r111 het \\'{!l'k gemaakre kos1e11, in't'11als 1·<mr lief gepre.sleerde wer/.:" (Van l loutte - Van Poppel V., Artikcl 1 794 B.\V., in X, Bijzmuh>re m•erec11ko111.�te11. Co111me11taar met <wcr;ic/11 \'(II/ recl1tspraok c11 recl1t.\·/eer, 60.) 3 free translation of the origin�! Dul ch tekst: "Daarcnbovcn lic�ft de ammeml!I' red1f op de winsf tlie hij dtmr de ui11·nl!ri11g w.111 lief werk hod k111111e11 111ake11 (lm:111111 cesstms) H (Van Houltc - Van Poppel V., At1ikcl 1 794 D.\V., in X, Bij:ondere 01•crec11/.:0111s1e11. Ca111me111uor met 01•er:::ic/J1 1•cm rechtspraak e11 rcd1tslcer, 60.)

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(v)

the date of full payment; provisionally calculated from 23 December 2012 (five

days after the second 'written notice of manufacturing completion') until 28 November 2014 (the date of this Request for Arbitration), at an amount of EUR

455,923.50; and

orders GLES to pay compensation to TMCo for the conservation costs that TMCo has

incurred, and continues to incur, in relation to the first two sets of Products,

provisionally estimated at EUR 250 per day; provisionally calculated from 23

December 2012 (five days after the second 'written ,notice of manufacturing

completion') until 28 November 2014 (the date of this Request for Arbitration), at

an amount of EUR 176,250.00.

In addition, TMCo requests the rescission of the Contract for the remaining 12 sets of

Products, and that GLES be ordered to pay to TMCo:

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its loss of profits whicl1 amounts to EUR 72,041.98 per set (exhibit 21) for these

12 sets of Products, or EUR 864,503. 76 in total, plus interest at the legal rate of

2. 75% per annum4 as from 18 December 2012, the date of TM Co's first formal notice after the Amendment (exhibit 10bis), until the date of full and entire

payment; and

compensation for the cost of materials which TMCo ordered in the context of

performance of the Contract and which can no longer be used, being EUR

34,466.80 plus interest at the legal rate of 2.75% per annum as from 18 December

2012, the date of TMCo's first formal notice after the Amendment (exhibit 10bis),

until the date of full and entire payment; this amount of EUR 34,466.80 represents

the cost of pipes that were purchased to manufacture the screw conveyors listed in

article 1 of Specification N°1 (exhibit 2).

(b) Alternatively (in subordinate order): rescission of the entire Contract

Should the Arbitral Tribunal hold that the performance of the Contract forms an indivisible

whole, making it impossible to conserve just a part of it, TMCo requests that the entire

Contract be rescinded on an ex tune basis as of the date of entering-Into of the Contract on

6 February 201 2 . Furthermore, TMCo requests that GLES be ordered to pay to TMCo, on

the basis of the legal principles Indicated above:

(i)

(II)

the agreed price for the first two sets of Products of EUR 646,695.13 (EUR

361,42 1.18 (the full contractual price for the first set) minus EUR 86,530.94 (the

advance payment for the first set) plus EUR 371,804.89 (the full contractual price for the second set)), plus interest at the legal rate of 2.75% per annum as from 23

December 2012 (five days after the second 'written notice of manufacturing

completion') until the date of full and entire payment;

its loss of profits, which amounts to EUR 72,041.98 per set (exhibit 21) for these

12 sets of Products, or EUR 864,503. 76 In total, plus interest at the legal rate of

2. 75% per annum as from 18 December 2012, the date o f TMCo's first formal notice after the Amendment (exhibit 10bls), until the date of full and entire

payment; and

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compensation for the cost of materials which TMCo ordered in the context of perforn1ance of the Contract and which can no longer be used, being EUR 34,466.80 plus interest at the legal rate of 2. 75°/o per annum as from 18 December 2012, the date of TMCo's first formal notice after the Amendment (exhibit lObis),

until the date of full and entire payment; this amount of EUR 34,466.80 represents the cost of pipes that were purchased to manufacture the screw conveyors listed in article 1 of Specification N°1 (exhibit 2);

compensation for the conservation costs that TMCo has inCurred, and continues to incur, in relation to the first two sets of Products, provisionally estimated at EUR 250 per day; provisionally calculated from 23 December 2012 (five days after the second 'written notice of manufacturing completion') until 28 November 2014 (the date of this Request for Arbitration), at an amount of EUR 176,250.00.

In addition, TMCo requests that it be allowed to dispose of the first two sets of Products at its convenience and without any possible claim or recourse by GLES."

GLES' claims

16 25 February 2015 - Respondent's answer to Request for Arbitration (pp. 3-4):

17 1'Affirmative defenses

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Specific Performance Does not Lie. This dispute concerns performance of Contract No. 9, as amended, between the parties hereto. Clalmant asks for specific performance [payment] for the first two complete sets of product that it claims to have properly manufactured. As noted in its Request for Arbitration, Claimant avers that it sent "written notice of manufacturing completion'' on 20 July 2012 [Claimant's Exhibit 3], and again on 18 December 2012 (Claimant's Exhibit 10 bis]. However, merely sending a notice of completion does not automat!cally entitle it to an acceptance of the product, sight unseen.

Respondent repeatedly demanded proof of completion Jn accordance with specifications before It would proceed. Respondent wanted to send an engineer over to inspect the product at the factory after receiving commercjally reasonable assurances of technically compliant manufacture - as required by the Special Terms of Sale of Products No. 1 and Specification No. 1 to the Agreement - which were never forthcoming.

Certain changes to the last blade of the left and right screw conveyer systems were confirmed by communications between the parties on April 13, 2012. See Respondent's group Exhibit "A" consisting of 5 pages. For the drawings, with specifications pertaining to the agreed changes, see group Exhibit B hereto, consisting of 6 pages.

In lieu of commercially reasonable assurances (as mentioned above), Phllippe, Rombaut, TMCo's owner, sent photographs on January 23, 2014 showing a portion of the work claimed to be completed. To the extent that It shows the two sets of product to be completed, It is woefully inadequate. If that was all they had, It shows that the product was not compliant roughly a year and nine months after the bald representations that it was.

See Respondent's group Exhibit C [5 pages] affixed hereto and incorporated herein by reference:

1. On Ex. C, page 1 we see two each of the left and right screw conveyors. The last blades of each were to be modified per Exhibits A and B, and this had not been done [15 months after the modification agreement]. This could not have taken more than a week to complete, as you are talking about four [4] blades only.

2. Page 3 shows one burner unit only [not two]. 3 . Page 4 shows what appears to b e two unloading units. 4. Page 5 shows one loading unit and parts only of the second one, which lacks the driver

motor.


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I · 1 · i : 1 1 ' I I , I , 1 I ' , 1 1 ' I I i !, I ' 1' ', !' I ' ' I ;


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5. No pictures were furnished showing the two Coke Screws (Item 6 of Specification No. 1], nor the Gas Pipelines sets [Item of Specification No. 1]. How hard would that have been. Easy peasy, as they say ...... if they had existed and the work had been done.

4 *******************

5 No SP Lies. It is axiomatic that If, as here, the seller cannot or does not manufacture the 6 product according to specification, It cannot force the buyer to accept a defective product. 7 Furthermore, to be able to rescind the contract as to the other 12 sets of product and sue 8 for Jost profits, it should be required to show that it could actuaJly complete the product 9 properly as to the portion of the contract it Is seeking SP for - which it has not.

10 What is boils down to is that, as of now, Claimant is in breach of contract and is seel<lng 1 1 unjust enrichment.

1 2 6(b) . Savings Clause. Respondent hereby reserves the right to present a t the hearing of 13 this matter any other defenses which may later be discovered."

14 15. RELIEF SOUGHT AND AMOUNTS CLAIMED BY THE PARTIES

15 15.1. Relief sought and amounts claimed bv TMCo


17 "As a consequence of the above, the Clalmant seeks a decision In which it Is confirmed that 18 GLES has perpetrated a serious breach of the Contract justifying the rescission of the 19 Contract under article 1184 of the Belgian Civil Code.

20 On that basis, TMCo requests that GLES be ordered to perform Its contractual obligations i n 21 relation to the first two sets of Products.

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In partrcular TMCo requests that the Arbitral Tribunal:

(i) orders GLES to take delivery of these two sets of Products In accordance with Article 5.2 of the Contract within 15 days after payment of the price and compensation as provided under (iii), (Iv), and (v) below;

(ii) if GLES fails to pay and to take delivery of these first two sets of Products In

accordance with (i) above within 30 days after the date of the Arbitral Award, allows TMCo to dispose of these first two sets of Products at Its convenience and without any possible claim or recourse by GLES;

(Iii) orders GLES to pay EUR 646,695.13to TMCo, which Is the agreed price for the first two sets of Products (EUR 361,421.18 (the full contractual price for the first set) minus EUR 86,530.94 (the advance payment for the first set) plus EUR 371,804.89 (the full contractual price for the second set)) ;

(iv) orders GLES to pay compensation to TMCo for late payment in accordance with Article 12.2 of the Contract, being 0.1% for every day of delay which is EUR 646.70 (0.1% of the outstanding contract price of EUR 646,695.13) per day of delay until the date of full and entire payment; provlslonally calculated from 23 December 2012 (five days after the second 'written notice of manufacturing completion') until 28 November 2014 (the date of this Request for Arbitration), at an amount of EUR 455,923.50; and

(v) orders GLES to pay compensation to TMCo for the conservation costs t.hat TMCo has incurred and continues to incur, in relation to the first two sets of products, provisionally estimated at EUR 250 per day; provisionally calculated from 23

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December 2012 (five days alter the second 'written notice of manufacturing completion') until 28 November 2014 (the date of this Request for Arbitration), at a n amount of EUR 176,250.00.

In addition, TMCo requests the rescission of the Contract for the remaining 12 sets of Products, and that GLES be ordered to pay compensation to TMCo:

(vi)

(Vii)

for its loss of profits, which amounts to EUR 72,041.98 P,er set (exhibit 21) for these 1 2 sets of Products, or EUR 864,503. 76 in total, plus interest at the legal rate of 2.75°/o per annum5 as from 18 December 2012, the date of TMCo's first formal notice after the Amendment (exhibit 10bis), until the date of full and entire payment; and

compensation for the cost of materials which TMCo ordered in the context of performance of the Contract and which can no longer be used, being EUR 34,466.80 plus interest at the legal rate of 2. 75°/o per annum as from 18 December 2012, the date of TMCo's first formal notice after the Amendment (exhibit 10bis),

untll the date of full and entire payment.

Finally, TMCo requests that the Arbitral Tribunal orders GLES to compensate TMCo for the legal costs and expenses (including arbitration fees and costs) which it has Incurred and continues to fncur in these arbitration proceedings, provislonally estimated at EUR 1.00,

TMCo reserving the right to further quantify these costs and expenses In the course of the proceedings.

Alternatively (in subordinate rank), TMCo requests that the Arbltral Tribunal rescind the entire Contract on an ex tune basis as of the date of entering-into of the Contract on 6

February 2012. Furthermore, TMCo requests that GLES be ordered to pay TMCo:

( i)

(ii)

(Ill)

(iv)

the agreed price of EUR 646,695.13 for the first two sets of Products (EUR 361,421 .18 (the full contractual price for the first set) minus EUR 86,530.94 (the advance payment for the first set) plus EUR 371,804.89 (the full contractual price for the second set)), plus interest at the legal rate of 2.75°/o per annum as from 23

December 2012 (five days after the second 'written notice of manufacturi ng completion') until the date of full and entire payment;

TMCo's loss of profits wl1ich amounts to EUR 72,041.98 per set (exhibit 21) for these 12 sets of Products, or EUR 864,503.76 In total, plus interest at the legal rate of 2.75°/o per annum as from 18 December 2012, the date of TMCo's first formal notice after the Amendment (exhibit lObis), until the date of full and entire payment;

compensation for the cost of materials which TMCo ordered In the context of performance of the Contract and which can no longer be used, being EUR

34,466.80 plus interest at the legal rate of 2.75°/o per annum as from 18 December 2012, the date of TMCo's first formal notice after the Amendment (exhibit 10bis),

until the date of full and entire payment; and

compensation for the conservation costs that TMCo has Incurred, and continues to incur, In relation to the first two sets of Products, provisionally estimated at EUR 250 per day; provisionally calculated from 23 December 2012 (five days after the

5 A"- published in the oflicial Belgian Gnzcltc on 20 Januacy 2014, 4208.

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11 15.2.

second 'written notice of manufacturing completion') until 28 November 2014 (the date of this Request for Arbitration), at an amount of EUR 176,250.00

In addition, TMCo requests that the Arbltral Tribunal orders that TMCo be allowed to dispose of the first two sets of Products at its convenience and without any possible claim or recourse by GLES.

Finally, TMCo requests that the Arbitral Tribunal orders GLES to <!ompensate TMCo for the legal costs and expenses (including arbitration fees and costs) which it has incurred and continues to Incur in these arbitration proceedings, provlsionally estimated at EUR 1.00, TMCo reserving the right to further quantify these costs and expenses in the course of the proceedings."

Relief sought and amounts claimed by GLES

12 25 February 2015 - Respondent's answer to Request for Arbitration (pp.2-3):

13 " Response to the relief sought

14 3. Respondent denies that Claimant Is entitled to payment under the claims described in 15 the Request or at al l . The sums claimed did not fall due under the Agreement due to the 16 defense(s] set forth below.

17 Respondent seeks its costs of the arbitration."

18 25 February 2015 - Respondent's answer to Request for Arbitration (pp.4-5):

19 "Relief Sough

20 21 22 23

7. Relief sought. By reason of the above premises, Respondent therefore seeks a declaratlon from the Arbltral Tribunal that Claimant be denied any relief in this matter and, in consequence, ls Hable to Respondent for its attorney's fees and costs attendant on and pertaining to this matter.

24 25 26

To the best of Respondent's knowledge and belief said fees and costs will be In excess of $75,000 (US$] by the conclusion of this matter, plus travel costs - as may be revised at the hearing of this matter."

27 16. COSTS OE THE ARBITRATION, TAXES

28 It is referred to the financial table of 06 February 2015 in which the amount of the dispute has 29 been fixed at 3 .076.480 US$ or 2.463.114 €, the provisional advance paid by TMCo at 40.000 € 30 and the range of the arbitrator's fees at between a minimum of 25.554 US$ and an maximum of 31 115. 144 US$.

32 Written submissions on the parties' clalms and relief sought with respect to the costs of arbitration 33 will be submitted at the latest on 5 October 2015; the Arbitrator will subsequently declare the 34 proceedings closed according to article 27 of the ICC Rules of Arbitratio11.

35 In case the costs of arbitration, including the arbitrator's fees and costs of defense of the parties, 36 are subject to taxes such as VAT, parties undertake to settle these taxes upon the receipt of a 37 corresponding statement showing the amount due by them.

38 17. ISSUES TO BE DETERMINED

39 According to Art. 23 of the ICC Rules of Arbitration, the terms of reference should include "unless 40 the arbitral tn'bunal considers it inappropriate, a list of Issues to be determinedu (d).


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1 The parties having clearly set out the issues to be determlned1 the Arbitrator considers it 2 inappropriate to summarise and/or rephrase them.

3 18. SIGNATURES

4 Executed In 4 originals by each of the signers in their place of residence1 whereof each party and 5 the arbitrator confirm having received an original, the 4th original ta be submitted by the Arbitrator 6 to the ICC.

For TMCo:

(name, function, information)

'rtiwl �YlLJ,L Date:l!A/G�2015

Place of signature:

For GLES:

contact (name, function, inforn1ation)

j{l ,;J Date: --/--/2015

Place of signature:

ARBITRATOR:

contact Johan LAMBERS

Sole arbitrator

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20150321 TOR for signature .rtf


Documents

TERMS OF REFERENCE ARBITRATION ICC N° 20663/MHM