4.3 Measuring Program Use
4.3.2 Rate of Loss Mitigation Use
internacional susceptible de generar responsabilidad internacional del Estado, no
aportando una suficiente explicación del derecho aplicable a la controversia. La
comisión rechazó este argumento apelando nuevamente tanto al poder de discreción que
goza el órgano arbitral, como al carácter estricto con el que debe interpretarse esta
causa:
“311. The Committee would also like to recall that annulment for manifest excess of powers is only warranted when a tribunal has failed to apply the applicable law or when, while purporting to apply it, it committed an error so egregious that its interpretation can be deemed as untenable. Article 52(1)(b) of the ICSID Convention does not allow the annulment of awards for failing to examine the applicable law in the level of detail desired by a party. As long as a tribunal correctly identified the applicable law and endeavored to apply it to the facts of the case, annulment is not warranted.
312. The Committee considers that a tribunal must be allowed a degree of discretion with regard to the level of detail of its analysis under the applicable law. An award cannot be annulled because a tribunal, despite correctly identifying the applicable law and its contents, did not examine in detail all the authorities or all the arguments made by the parties. The Enron v. Argentina annulment committee made a very useful observation in this respect, albeit in the context of Article 52(1)(e).
313. In the case before the Committee, the Tribunal correctly identified the applicable law. Moreover, within its analysis, the Tribunal referred to the text of the Treaty, to the Parties’ submissions, to five arbitral awards and to at least five doctrinal commentaries. The two awards with which the Tribunal agreed with had been invoked by both Parties. Referring to these sources, the Tribunal found that “the minimum standard of FET under Article 10.5 of CAFTA-DR is infringed by conduct attributed to the State and harmful to the investor if the conduct is arbitrary, grossly unfair or idiosyncratic, is discriminatory or involves a lack of due process leading to an outcome which offends judicial propriety”.
(…)
316. The fact that the Tribunal did not extensively examine the over 400 pages of pleadings and 150 legal authorities is irrelevant for purposes of a discussion under
Article 52(1)(b) of the ICSID Convention. The Committee considers it sufficient for purposes of this discussion that the Tribunal did correctly identify the applicable law and set out its content.
317. In addition, as the Committee will explain in greater detail below, the Tribunal endeavored to apply that law to the facts of the case. In this respect, the Committee cannot agree with Guatemala’s second criticism, namely that the Tribunal failed to explain how Guatemala’s breach of the regulatory framework resulted in a breach of international law and thus conflated the two concepts. 318. The Committee first observes that the Tribunal did in fact apply domestic law to the issues in dispute that were properly submitted to it. The Committee has concluded at Section VI.1.7 above that that the Tribunal did not manifestly exceed its powers by proceeding in this manner. Indeed, the Tribunal examined the Guatemalan regulatory framework in light of the Constitutional Court decisions and concluded that it rested upon two fundamental principles: (i) that, save in the limited exceptions provided by the LGE and the RLGE, the tariff would be based on a VAD calculation made by a prequalified consultant appointed by the distributor; and (ii) that, in case of disagreement between the regulator and the distributor, the disagreement would be resolved having regard to the conclusions of the Expert Commission. On the basis of the regulator’s failure to pay any regard to the conclusions of the Expert Commission and to give reasons for this, the Tribunal concluded that Resolution 144-2008 was inconsistent with the regulatory framework.
319. The Committee finds that, in spite of referring to and applying domestic law in the instances above, the Tribunal ultimately found liability under international law on the basis of an international law analysis. The Committee considers that, contrary to Guatemala’s contentions, the Tribunal did not equate domestic law with international law, but carefully distinguished between the two.
320. As mentioned above, the Tribunal established the content of the international mínimum standard of treatment in the specific context of administrative proceedings by holding that “a lack of due process in the context of administrative proceedings such as the tariff review process constitutes a breach of the minimum standard”, and that “a willful disregard of the fundamental principles upon which the regulatory framework is based, a complete lack of candor or good faith on the part of the regulator in its dealings with the investor, as well as a total lack of reasoning, would constitute a breach of the minimum standard.”
321. The Tribunal then applied international law to the facts of the case before it. In this respect, the Tribunal held that “both the regulatory framework and the minimum standard of treatment in international law obliged the CNEE to act in a manner that was consistent with the fundamental principles on the tariff review process in Guatemalan law”. However, in the case before it, the Tribunal found that the regulator had disregarded the fundamental principles underpinning the regulatory framework, as evidenced by Resolution 144-2008. The Tribunal further held that, by accepting to receive the Expert Commission’s report in the week of July 24, 2008, and to then disregard it along with the Bates White study on the basis this did not leave it with enough time to publish the tariff by August 1, 2008,
the CNEE acted in breach of the fundamental principles of due process as well as in a contradictory and aberrant manner. The Tribunal explained that “both under the regulatory framework and under the minimum standard of treatment, the CNEE could and should have taken the time, after careful review of the Expert Commission’s report, to implement its conclusions in the Bates White study” and that “[t]he Arbitral Tribunal can find no justification, other than its desire to reject the Bates White study in favor of the more favorable Sigla’s study, for such a behavior”. The Tribunal further found that the “arbitrariness of the regulator’s behavior [was] evidenced by the result of the ‘preliminary review’ that it conducted over the weekend of 26-27 July of the Expert Commission’s report and of its likely consequences on the May 5, 2008 version of the Bates White study”. The Tribunal interpreted these findings in light of its earlier conclusions at paragraphs 457 and 458 of the Award and found that the “repudiation of the two fundamental regulatory principles applying to the tariff review process [was] arbitrary and breach[ed] elementary standards of due process in administrative matters”. It was on this basis that the Tribunal concluded that the obligation to accord fair and equitable treatment under Article 10.5 of the CAFTA-DR had been breached.
322. The Committee has no difficulty determining that the Tribunal’s analysis and decision on liability were based on the CAFTA-DR and customary international law, as applied to the facts of the case”.