ICC ARBITRATION No. 2139/RD

Hidroelectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) eta/. ICC ARBITRATION No. 21398/RD

ICC ARBITRATION No. 2139/RD

I. ANSWER TO REQUEST FOR ARBITRATION FILED BY HIDROELECTRICA SANTA RITA, S.A

A. ANSWER TO THE REQUEST I COUNTERCLAIMS

1

1. Hidroelectrica Santa Rita, Sociedad An6nima (hereinafter referred indistinctively as "HSR"), initiated an Arbitration Request1 against Corporaci6n AIC, Sociedad An6nima (hereinafter referred indistinctively as "A/GSA").

2. This arbitration arises from the construction of a hydroelectric power plant in Coban, Department of Alta Verapaz, (hereinafter referred indistinctively as the "Project") under the Engineering, Procurement and Construction Agreement (hereinafter referred indistinctively as the "EPC Agreement", "EPC Contract" or simply as "EPC')2

.

3. NOVACOM, Sociedad An6nima (hereinafter referred indistinctive/y as "NOVACOM') was mentioned by HSR in its arbitration request, and therefore was joined by AICSA to participate in the arbitration process, as Co-Respondent in consideration that any award in this arbitration process could affect NOVACOM"s rights.

4. Pursuant to Article 5 of the Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules"), NOVACOM hereby submits its Answer and Counter-Claim to the Request for Arbitration filed on October 9, 2015 by HSR with the International Chamber of Commerce (hereinafter referred indistinctively as the "ICC").

5. Article 5 of the "ICC Rules" provides that the "Answer" to the Request must be submitted within 30 days from the receipt of the Request from the Secretariat. Secretariat of ICC granted NOVACOM an extension of time to file the Answer through February 08, 2016.

B. CLAIMS BETWEEN MULTIPLE PARTIES

6. Pursuant to Article 8, paragraphs 1, 2 and 3 of the "ICC Rules", NOVACOM hereby submits arbitration claim against HSR.

7. NOVACOM hereby presents direct claim against HSR without prejudice to the status of "subcontractor" that was attributed by HSR under the ENGINEERING, PROCUREMENT, CONSTRUCTION, COMMISIONING AND START-UP AGREEMENT OF THE WATER TO WIRE SYSTEMS (hereinafter referred indistinctively as the "WWS Agreement" "WWS Contract" or simply as "WWS" or "W2W'J that was signed between NOVA COM and AICSA.

8. This claim is presented directly against HSR as permitted under Guatemalan law 3, since

(a) HSR was the legal entity that controlled and decided over the effects and consequences

1 ICC Arbitration 2139/RD.

2 Claimant (HSR) is the Owner of the Project and Respondent (AICSA) is the Contractor under an Engineering, Procurement and Construction Agreement dated March 8, 2012, as amended and restated on February 20, 2013 (the "EPC Agreement").

3 As will be explained in this Answer, according to Article 1284 of the Guatemalan Civil Code, there is "simulation of contract" when the legal nature of the agreement it's disguised, giving the appearance of another agreement of a different nature.

Case 1:19-cv-20294-RNS Document 30-9 Entered on FLSD Docket 04/26/2019 Page 2 of 38

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Hidroelectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) eta/. 2 ICC ARBITRATION No. 21398/RD

of the WWS Contract (b) HSR failed to comply with its fundamental obligations under the "EPC Agreement" and consequently affected directly the "WWS Agreement"; (c) HSR acted in notorious bad faith and (d) HSR abused of its legal and contractual rights under the "EPC Agreement" affecting directly the "WWS Agreement" and NOVACOM's rights under the WWS as will be explained subsequently in this Answer.

9. NOVACOM also presents direct claim against HSR, since, as explained below, NOVACOM was selected by HSR to provide the Water to Wire Systems (WWS) for the construction of the Project.

10. Also, HSR was who initiated the Request for Tender (RFT) for the WWS4 and, it was HSR who directly received NOVACOM's offer for WWS contract award.

11. Furthermore, it was HSR who approved and awarded the WWS Contract to NOVACOM, and, moreover, it was HSR who indicated the terms and conditions for the bid, and expressly indicated in section 1.2.1 0 of the RFT that " ... HSR would act as the WWS contract

,s manager ... .

12. Therefore, as provided under Guatemalan law, since HSR selected and approved NOVACOM to provide the Water to Wire Systems (WWS) and it was HSR who had control over the WWS Agreement, even if formally two contracts were signed, that is, the "EPC" (signed between HSR and AICSA) and the "WWS" (signed between AICSA and NOVACOM) it was HSR who actually controlled the effective implementation of both Agreements and also who finally determined the default of the EPC and WWS Agreements, in such a way that HSR is to be deemed the only responsible towards NOVACOM and AICSA for the damages caused, especially those who were caused to NOVACOM, as it will be indicated in this answer.

C. PROCEDURAL MATTERS.

13. The WWS Agreement (in the same way than the EPC Agreement) contains the following provisions that stipulate as follows:

a) Arbitration disputes pursuant to the Rules of the International Chamber of Commerce (ICC Rules)

b) Arbitration proceedings to be held in Miami, Florida, United States of America; c) English language to be used in the arbitration; d) The laws that govern the dispute and the applicable laws to the substance of the

contract are the laws of the Republic of Guatemala; e) An arbitration panel shall be composed of three independent arbitrators.

14. NOVACOM, by this act, accepts the terms specified above and that shall apply to this arbitration.

4 See EXHIBIT CR-1: which contains (a) Invitation for a private tender process for the electrical equipment for the Water to Wire duly presented by HSR and signed by its General Manager, dated on July 17th 2009. (b) Document containing the General Conditions and Scope of Works, dated July 20th 2009, issued by HSR.

5 As stated in Section 1.2.10 of the Document the General Conditions and Scope of Works emitted in Spanish by HSR on July 20th 2009. (See Document the General Conditions and Scope of Works, attached hereto as Exhibit CR-1)


Hidroelectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) et al. 3 ICC ARBITRATION No. 21398/RD

15. NOVACOM participates in this arbitration, as claimant against HSR, under the provisions of paragraph a) of section 32.46 of both the EPC and the WVVS Contracts.

16. Regarding the place of the arbitration, NOVACOM agrees that this arbitration should be conducted in the city of Miami, Florida, United States of America.

17. Regarding the language of the arbitration, NOVACOM agrees that this arbitration should be conducted in English; however, if any testimony or documentary evidence necessary is presented in a language other than English, notwithstanding its translation into English, NOVACOM requires that such evidence is received also in the appropriate language, including, but not limited, to the Spanish language.

18. Regarding the Governing Law of the arbitration, NOVACOM requests to this Arbitral Tribunal, in accordance with section 32.3 (g) of the EPC and WVVS Agreements, to apply in their substantive decisions, the laws of the Republic of Guatemala.

19. Regarding the constitution of the Arbitral Tribunal, in accordance with section 32.3 (a) of the EPC and WVVS Agreements, NOVACOM consents that the number of arbitrators to form the arbitration panel shall be three. NOVACOM has also consented and agreed to jointly nominate arbitrator previously proposed by AICSA, Mr. Adolfo Jimenez.

II. THE PARTIES.

A. CLAIMANT.

20. Claimant HSR is a company organized and existing under the laws of the Republic of Guatemala, with its current address at:

Hidroelectrica Santa Rita, S.A. 1 ra. Calle 14-92 zona 8 de Mixco Pinares de San Cristobal, Guatemala Attention: Mr. Stephen Pearlman.

21. Claimant HSR is represented in this arbitration by the following law firms and individual lawyers:

Rafael E. Llano Oddone Sean Goldstein Lauran San Roman Guijarro White & Case S.C. Torre del Bosque- PH Blvd. Manuel Avila Camacho #24 Col. Lomas de Chapultapec 11000 Mexico, D.F. Tel: +52-55-5540-9600 Fax: +52-55-5540-9699 rllano@wh itecase. com [email protected] lg uijarro@wh itecase. com

Jorge Rolando Barrios Edgar Renato Cheng Tabarini Lorena Barrios Pinzon Jaime Rolando Velasquez Velasquez Bonilla, Montano, Toriello & Barrios Avenida de Ia Reforma 15-24, Zona 9 Edificio Reforma Obelisco, 3er Nivel Cuidad de Guatemala, Guatemala 01009 Tel: (502) 2496-4646 [email protected] [email protected] [email protected] [email protected]

6 Pursuant to Section 32.4(a) of both the "EPC Agreement" and the "WWS Agreement", a Third Party may be joined in the arbitration if the dispute involves or relates to the "Third Party" and such dispute is connected, raises issues or facts that involves the work of Subcontractor.


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B. RESPONDENT.

22. Respondent AICSA is a company organized and existing under the laws of the Republic of Guatemala, with its principal place of Business at:

Corporaci6n AIC,S.A. ga Calle 18-18, Zona 14 Guatemala City, Guatemala 01014 Attention: Mr. Ernesto Ruiz.

23. Respondent AICSA is represented in this arbitration by the following law firms and individual lawyers:

Fowler Rodriguez LLP Santiago J. Padilla, Esq. William Miliken, Esq.

Aguilar & Aguilar

and

355 Alhambra Circle, Suite 801 Coral Gables, Florida 33134 United States of America Tel: (786) 364-8400 Fax: (786) 364-8401 [email protected] [email protected]

George J. Fowler, Ill, Esq. 400 Poydras Street, 30th Floor New Orleas, Louisiana 70130 United States of America Tel: (504) 595-5123 Fax: (504) 523-2705 [email protected]

C. CO- RESPONDENT.

Juan Luis Aguilar Marla Renee Aguilar Alejandra Quevedo 38 avenida 13-78 zona 1 0 Torre Citibank, Nivel 17 Penthouse Sur, Guatemala C.A. Tel: (502) 2339-8000 Fax: (502) 5515-5404 [email protected] [email protected] [email protected]

24. Co-Respondent NOVACOM is a company organized and existing under the laws of the Republic of Guatemala, with its principal place of Business at:

Novacom, S.A. sa calle 3-14 Zona 10 Guatemala City, Guatemala 01010 Atten: Mr. Manuel Fas Puertas Tel: (502) 2334-6148

25. Co-Respondent NOVACOM is represented in this arbitration by the following law firm and individual lawyers:

Consultorlas Trlpode S.A. Jacqueline Hazbun Arias 8 ave 3-90 zona 14 Edificio La Rambla Torre II Oficina 3-1 Tel: (502) 23864010 Guatemala City, Guatemala 01014 [email protected]


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Ill. INTRODUCTION

26. The present claim, which NOVACOM initiates against HSR, relates to all electrical works that had been required to NOVACOM under the "WWS Agreement" signed with AICSA.7

27. The WWS includes the electromechanical components for generating electric power in the "Project", property of HSR. The electrical works were part of the construction of the "Project" that AICSA was required to build at Goban, Department of Alta Verapaz, Guatemala. AICSA would be responsible for the construction of all civil works of the hydroelectric power generation plant (under the EPC) while, NOVACOM was selected by HSR to do all electromechanical work (WWS). 8

28. NOVACOM denunciates categorically that HSR is liable and responsible towards NOVACOM for the damages that HRS caused by:

{a) Failing or defaulting to pay: The amount of EUR € 736,856.82 Euros and the amount of US$ 332,651.74 Dollars of the United States of America, that HSR was obligated to pay to AICSA (under the EPC contract) the Payment Applications number 3 and number 4 9

, no later than September 28th and 29th 2013, payments that were due, and that NOVACOM was entitled to in order to comply with its payment obligations towards Litostroj and Hyundai Ideal (the turbine and generator system suppliers); obligations that were undertaken under the WWS Agreement.

{b) Maintaining itself in a situation of non compliance during the validity of the Agreements: HSR in addition to the non compliance with the payments indicated in the above paragraph, established itself in complete default of its obligations under the EPC, regarding the aspects that affected the compliance of the WWS Agreement, since October 15

\ 2013 until March 16th 201510 when it decided to terminate the EPC Agreement, and consequently the WWS Agreement. 11

{c) Acting in Bad Faith, suspending the EPC contract:

(i) While HSR was already in default of its obligations 12; and furthermore, instead of

complying with its payment obligations, HSR suspended the EPC Agreement on October 15

\ 201313, affecting directly the WWS Agreement.

7 AICSA entered into an Agreement with NOVACOM for the Engineering, Procurement, Construction Commissioning and Start-Up of the Water-to-Wire Systems of the Project ("WWS Agreement"), which was amended on February 18,2013 (the "Water-to-Wire Contract")

8 The Water-to-Wire Systems involve the electromechanical components for generating electric power in the hydroelectric plant, including, among some others, the construction of the turbine and generator system.

9 This Payment Application was sent to HSR by AICSA as Payment Application Number 4.

10 See EXHIBIT CR- 2: HSR's termination letter to AICSA.

11 See EXHIBIT CR- 3: AICSA's consequent termination letter to NOVACOM.

12 HSR was already in default of its obligations by failing to pay the sums of EUR€ 736,856.82 Euros and US$ 332,651.74 Dollars of the United States of America. Instead of making the payments required under Payment Application No.4, On October 1'' 2013, HSR declared that it was suspending the Works due to an non existing Force Majeure event

13 See EXHIBIT CR- 4: which contains both, the letter of suspension sent to AICSA by HSR declaring the "Suspension of the Works due to a Force Majeure Event", as well as the consequential letter sent to NOVACOM by AICSA notifying that the Contractor (HSR) is suspending the works.



(ii) Declaring HSR the "suspension of the contract because of Force Majeure" instructing AICSA to immediately suspend all Works including (though not limited to) the construction of the WWS equipment, this was not only a suspension based on a non-existent cause invoked at HSR"s sole convenience, but most importantly, the alleged cause of "force majeure" did not affect the compliance or ability of HSR to fulfill its obligations under the EPC contract, specifically, in the part that affects NOVACOM, that is, HSR"s obligation to pay the sums of money it had to pay on September 28th and 29th 2013, as indicated above.

(iii) Affecting HSR the ability of NOVACOM's fulfillment of its obligations under the WWS Agreement, by instructing the suspension of the WWS works under an alleged cause of "force majeure" that did not affect the construction of the WWS equipment, since it was being build or performed abroad, that is, in a different area to the project site where the alleged facts constituting the force majeure occurred (neither NOVACOM nor its suppliers were affected by the alleged Force Majeure).

(d) Deceiving the parties of both the EPC and WWS Agreements (AICSA and NOVACOM): During the suspension of both contracts, making them believe that the EPC and WWS contracts will continue to be enforced and would be reinstituted in 2016; and at same time, HSR requested a consolidation of the Advance Payment Bonds that were given to HSR by AICSA and NOVACOM under the EPC and WWS Agreements under a single bond14

.

(e) Pressuring AICSA and NOVACOM to return sums of money: During the suspension of both contracts, HSR also requested the reimbursement of a part of the amount of money it gave to AICSA and NOVACOM under the EPC and WWS Agreements, without recognizing the rights that AICSA and NOVACOM were entitled to under the EPC and WWS Agreements and without being legally entitled to do so since there was no provision of clause in the Agreements that allowed for the reimbursement of such payments.

(f) Acting in bad faith, by requesting to the bonding companies Seguros Privanza (formerly known as Afianzadora General) and Afianzadora G& T to pay to HSR the 100% value of the Advance Payment Bonds: Initiating a collection process with the bonding companies, seeking to unlawfully obtain the 100% of the money amount that HSR gave to AICSA and NOVACOM under the EPC and WWS Agreements, through the reimbursement of the Advanced Payments bond issued by AICSA. This action implied that AICSA had to, in return, collect the bond it had towards NOVACOM. HSR did this, 15 without regard of the rights that AICSA and NOVACOM were entitled to (under the EPC and WWS Agreements and the Advance Payment Bonds) and refusing to recognize all the works legitimately executed and performed by NOVACOM and, furthermore, without any consideration that part of these sums had already been engaged by AICSA and NOVACOM under the EPC and WWS Agreements, as the

14 The Advance Payment Bonds were, originally, taken out by both NOVACOM and AICSA. Although the EPC and VWVS Agreements were suspended by HSR, HSR deceived NOVACOM and AICSA, making them believe that the EPC and WNS contracts with continue to be enforced and would be reinstituted in 2016, and proceeded to request that the referred bonds to be taken out solely under AICSA's responsibility. Once the Advance Payment Bonds were consolidated, HSR started a malicious collection process, requesting the 100% of the value of the bonds, seeking the reimbursement of all of the Advanced Payments bonds without recognizing a single penny for the works executed by AICSA or NOVACOM during the execution of EPC and VWVS agreements.

15 See EXHIBIT CR- 5: which (a) HSR's attempt to execute AICSA"s bonds from "Seguros Privanza" (formerly known as Afianzadora General) and "Afianzadora G&T" and (b) AICSA's indication to "Afianzadora G&T"that it finds itself obligated to execute NOVACOM's bond (due to HSR attempts to execute AICSA's bond.)



advance payments were being applied to the Project and HSR knew that the referred EPC and WWS contracts were still being performed.

{g) Maliciously abusing of its rights that under the EPC Agreement and WWS Agreement and laws of the Republic of Guatemala were granted to HSR.

(h) Exercising, in an abusive manner its right to terminate the EPC contract, which directly affected the WWS contract: When the obligations acquired of NOVACOM towards Litostroj and Hyundai Ideal were still in force, as a result of issuing the purchase orders for the entities in charge of the construction turbine and generator system.

(i} Refusing to comply with its payment obligations: In accordance with the established consequences and/or effects for the termination of both contracts (the EPC and WWS) and in accordance with the rights under the laws of the Republic of Guatemala that entitle NOVACOM to be paid and receive the "value of the work, the payment of costs and/or materials, and compensation".

29. As a result of the default and contractual breaches of HSR, malicious acts and abuse its rights, NOVACOM hereby presents direct claim against HSR, and based on the aforementioned in this answer, respectfully request that the statements and convictions listed in this claim be recognized by the Arbitral Tribunal.

IV. THE NATURE AND CIRCUNSTANCES OF THE DISPUTE

30. NOVACOM categorically rejects HSR's position regarding that the present arbitration is limited to a simple "settlement of accounts" (simple liquidation of sums of money of the parties upon the termination of the EPC and WWS contracts) and/or "devolution of undisputable sums of money' as alleged by HSR in its request for arbitration, given that the differences between the parties arise from violations of HSR to the EPC contract, affecting in the WWS Agreement, including, the malicious exercise of rights, deceit and abuse of rights by HSR, that caused the damage to AICSA and NOVACOM.

31. NOVACOM rejects all allegations contained in HSR's Request for Arbitration, under which HSR seeks to justify its failures and defaults under the EPC Agreement, affecting directly the WWS Agreement, and deliberately disregards the rights that under such contracts AICSA and NOVACOM are entitled to.

32. NOVACOM states that HSR is the only responsible for the fact that both, the EPC and the WWS Agreements, could not be implemented and concluded and, therefore, HSR must be ordered to pay the amounts due under both contracts and in accordance with Guatemalan laws, amounts that are due as a result of the termination of the contract, as well as the amounts related to compensatory damages due to NOVACOM as a consequence of HSR's breach of the EPC and WWS contracts.



V. NOVACOM's CLAIMS

33. The present claim, that NOVACOM formulates against HSR, aims to obtain the declaration and recognition by the arbitral tribunal that:

(a) HSR breached its fundamental payment obligations under the EPC contract, affecting directly the WWS contract. Also, that HSR acted in bad faith and abused its rights during the suspension and termination of the EPC contract, affecting directly the WWS contract.

(b) NOVACOM fulfilled and met the contractual provisions that were entrusted to it under the WWS Agreement, including, but not limited to issuing the purchase orders to Litostroj and Hyundai Ideal for the services of design and construction of the turbine and generator system respectively, and NOVACOM'S assumption of personal responsibility to these suppliers.

(c) NOVACOM is entitled to collect the payment (from HSR) of the value of the work executed, as well as the value of the costs incurred and the value of the compensation for loss business value (lost profits damages) ("ganancias licitas'? that NOVACOM is entitled to, under the WWS Agreement and Guatemalan Law, as a result of HSR's unilateral decision to terminate the "EPC Agreement" forcing AICSA to terminate the "WWS Agreement".

(d) NOVACOM is entitled to collect the payment (from HSR) of the value of the compensatory for damages ("dafios y perjuicios'} caused to NOVACOM by HSR, by the abusive exercise of its rights "under the EPC agreement" and laws of the Republic of Guatemala. Abusive exercise that directly affected NOVACOM's rights under the WWS contract.

(e) NOVACOM is entitled to collect the payment (from HSR) of the value of costs and expenses of legal fees and associated costs,

(f) NOVACOM is entitled to collect the payment (from HSR) of the value of all the legal interest applicable to all the sums of money owed to NOVACOM, to be calculated taking into account the "value" throughout time of the money until the date of effective payment.

(g) Judgment for all other reliefs to which this Arbitral Tribunal finds that NOVACOM is entitled to.

VI. NOVACOM's RIGHT TO EXCERCISE RETENTION

34. In accordance of Article 682 of the Code of Commerce of Guatemala (applicable law in the present case), NOVACOM, hereby, by this act, exercises its right of retaining the amount of money of the Advance Payments HSR gave to NOVACOM (through AICSA) for the compliance of the WWS Agreement. 16

16 Article 682 of the Code of Commerce of Guatemala provides that the person whose credit is due, may retain the property of the debtor that may be in their possession to secure the payment of a debt or performance of some other obligations by the debtor. Article 682 provides



35. Although NOVACOM lawfully by this act gives notice of this retention, NOVACOM also makes the disclaimer, that the total amount of the retention is still insufficient to cover HSR's payment obligations, that according to the present claim, HSR should pay to NOVACOM, therefore, NOVACOM also request that the Arbitral Tribunal authorizes the guarantee measures that it deems appropriate in order to ensure the outcome of this dispute.

36. NOVACOM is not obligated to reimburse any of the sums set forth by HSR (directly or through AICSA) because the true nature of the sums of money given to NOVACOM was the nature of a down payment, aspect that is clear as NOVACOM had assumed 100% of its obligations towards all of the suppliers related to the completion of the water to wire system including turbines, generators, substations, power transmission lines and related equipment, as will be indicated in this answer.

VII. RELATIONS BETWEEN HSR AND NOVACOM

37. HSR decided to build a Hydroelectric Power Plant ("Central Generadora Hidroelectrica" in Spanish) on the borders of the "Rfo lcbolay" located in Caban, Department of Alta Verapaz, Guatemala, with estimated capacity of approximately 23.2 megawatts.

38. HSR sent out a letter of invitation for a private tender process, on one side, for the services related to the performance of the Civil Works (EPC}, and on the other hand, HSR also sent out a letter of invitation for a private tender process for the electrical equipment for the Water to Wire Systems (WWS) needed for the operation of the power plant project.

39. Clause 1.2.1 0 of the terms for the tender stated that the W2W contract was going to be administered by HSR.

40. Among various offers received by HSR to the Request for Tender (RFT) for the Water to Wire Agreement Systems (WWS), HSR selected NOVACOM's offer dated October 7th 2009,17

which was later formalized in the EPC Contract.

41. The price, costs, details, conditions and terms of the WWS equipment was approved directly by HSR, as well as the value of services that NOVACOM would provide to HSR for the WWS was approved directly by HSR in the amount of18 US$ 8,712,647.29 Dollars of the United States of America and EUR€ 5,692,290.00 Euros 19

42. The description, value and other characteristics of the equipment approved by HSR, are contained in the terms of reference issued by HSR dated July 20, 2009, as well as in the tender offer referenced above.

as follows: "Articulo 682. Derecho de Retenci6n. El acreedor cuyo credito sea exigible, podrtl retener los bienes muebles o inmuebles de su deudor que se hallaren en su poder, o de los que tuvieren Ia disposici6n por medio de tftulos de credito representatives."

17 See EXHIBIT CR- 6: which contains NOVACOM's offer dated October 7th 2009 received by HSR (Request for Tender (RFT) for the Water to Wire Agreement Systems,WWS)

18 The Price offered on October 7th 2009 was later revised and modified on February 21, 2011.

19 The price, in accordance with Section 6.1, (a) of the WWS Agreement was agreed as "fixed price" therefore, the parties could not modify it.



43. Both, the terms and offer for the WWS, and its acceptance were directly negotiated between HSR and NOVAGOM, therefore the original and contractual relationship for the provision of services Water to Wire (WWS) was solely between HSR and NOVAGOM.

44. In a parallel tender, HSR approved and assigned to AI GSA the performance of the civil works under an EPG Agreement.

45. As it will be explained later on, the terms and conditions of the WWS offer approved by HSR were formalized through a signed sub-contract between AIGSA and NOVAGOM, in which the real negotiations that took place between HSR and NOVAGOM were concealed.

VIII. STATE AUTHORIZATION (GUATEMALA)

46. HSR, requested the legal authorization from the Guatemalan Government, specifically from the Ministry of Energy and Mines of Guatemala ("Ministerio de Energia y Minas" in Spanish) for the use of public domain property destined for Hydroelectric Power Plant, specifically for the use or right to utilize water resources of the river flow from "Rio lcbolay", a river that runs, among other areas, the area of Goban, Alta Verapaz Department.

47. This authorization was formalized between HSR and the Ministry of Energy and Mines on August 13th 201020

. The authorization included the right to utilize as water resources the river flow from Rio lcbolay located in Goban, Department of Alta Verapaz, Guatemala.

48. The authorization granted by the Ministry of Energy and Mines imposed HSR the obligation of presenting ". .. to the MINISTRY a program of communication and record of its implementation in the communities where the project will have impact lor influence" This obligation of HSR, included the obligation to develop and implement a Community Relations Plan to ensure a relationship of harmony and coexistence between HSR and the local communities where the project would have impact, in a way that, on one side, the construction and use of resources would not affect the communities and, on the other hand, corporate social responsibility of HSR would be fulfilled, throughout the expected life of the project.

IX. THE EPC and WWS AGREMEENTS

49. Following the authorization that was granted to HSR by the Ministry of Energy and Mines, and following the approval by HSR offers that respectively were submitted to it (a) for civil construction work (by AICSA) and (b) for the electromechanical part of the project (by NOVAGOM); HSR should have signed a EPG contract (between HSR, as project owner and AIGSA as manager of the civil works) and a WWS contract (between HSR, as project owner and NOVAGOM as manager of water to wire works).

50. Although HSR was directly responsible towards AIGSA and NOVAGOM, HSR required, as stated above, the signature of two contracts: The "EPG Agreement" among HSR and AGISA and the "WWS Agreement" between AIGSA and NOVAGOM.

20 See EXHIBIT CR- 7: Which contains the "Autorizacion Definitiva de Uso de Bienes de Dominio Publico" granted by the Ministry of Energy and Mines of Guatemala. The contract approval for the use of public property is contained in public deed number 29, dated 13 August 2010, formalized before the notary public Laura Patricia Vargas Florido.



51. Indeed, despite the fact that the WWS contractual relationship was initiated and agreed between HSR and NOVACOM and, furthermore, the terms for the WWS tender indicated that the relationship would be between the referred parties (that is HSR and NOVACOM) HSR required and decided that the services that NOVACOM was hired to provide to HSR, would be regulated under a "subcontract" (the WWS Agreement) subscribed between NOVACOM and AICSA; meanwhile, HSR subscribed an "EPC Agreement" with AICSA for the construction and performance of civil works, in which the WWS terms, conditions and other stipulations should be defined as one of the EPC components. 21

52. HSR's interest and purpose was to create a "formal but non-substantive separation" of its contractual relations with NOVACOM by creating a contractual relationship between HSR and AICSA under the "EPC agreement" and another feigned or simulated contractual relation between AICSA and NOVACOM under "WWS agreement". Under that concept HSR concealed the real and substantive contractual relationship between HSR and NOVACOM; however, it was in fact, HSR who had control and decision on the effective implementation and effects of both contracts (EPC and WWS). This factual reality links HSR towards NOVACOM as a matter of Guatemalan law.

53. HSR had control of the EPC and WWS contracts since "the payment of sums of money" that both contracts required for their implementation depended solely and exclusively of HSR and, hence the control and dominance that HSR had on AICSA and NOVACOM for the implementation of both contracts. 22

X. THE APPLICABLE LAW TO THE EPC AND WWS AGREEMENTS

54. The WWS Agreement was signed between NOVACOM and AICSA on March 7th 2012, amended and ratified by the parties on February 18th 2013.

55. The WWS Agreement was signed under the same format, conditions and stipulations of the EPC Agreement, under the instructions of HSR (except for the changes that should be incorporated by differences in the scope of services).

56. Both, the EPC and WWS Agreements include, in a replicated manner the provision related to the contract's "APPLICABLE LAW". Both contracts (EPC and WWS) include, in section "1.8", the following provision: "Applicable Law. The Documents of the Agreement, and the Rights and obligations of the Parties under or pursuant to the Documents of the Agreement, shall be interpreted, construed and performed according to the substantive laws of the Republic of Guatemala. Parties expressly and irrevocably agree that the Vienna Convention on International Sale of Goods (Vienna Convention) is not applicable to the Agreement."

57. Therefore, as indicated in section 1.8 of both the EPC and the WWS Agreements, Guatemalan law is the law that governs the contractual provisions and substance of both agreements, and as such this is the applicable law for the interpretation of their contents and effects.

21 The terms that were previously determined and agreed with NOVACOM are stated in EXHIBIT B-1 of the "EPC Agreement".

22 Naturally, the EPC Agreement should include the Works related to the WWS, as they constitute complementary elements of the same power generation unit. Therefore, HSR had a direct relationship with the nominated subcontractor (that is NOVACOM), and as such control over the WVVS Agreement, including the obligations arising from the WVVS.



XI. SIMULATION OF CONTRACT UNDER THE LAWS OF GUATEMALA (THAT LLEGALLY BINDS HSR TOWARDS NOVACOM)

58. Guatemalan law (the law governing the contracts) provides in section 1 of Article 1284 of the Civil Code of Guatemala, there is "simulation of contract" when the legal nature of the agreement is disguised, giving the appearance of another agreement of a different nature.23

59. The WWS subcontract between NOVACOM and AICSA, g1v1ng the appearance of a "nonexistent contractual relationship" between NOVACOM and HSR was simulated, because the true nature and character of the relationship was in reality, solely between HSR and NOVACOM.

60. As a matter of fact, the simulation is evident during the duration of the pre-contractual and contractual stages of the WWS Agreement, since:

(a) NOVACOM continually had a direct relationship with HRS. (b) Both Contracts (EPC and WWS) were approved by HSR through their Guatemalan and

foreign lawyers. As such, both contracts are (except for minimal changes and adaptations necessary related to the scope of work) an exact replica of contractual terms.

(c) HSR had already specified and approved the terms, conditions, and specifications and even approved NOVACOM as a subcontractor for the WWS of the EPC contract signed with AICSA.

(d) Originally, the bonds ("fianza de anticipo" in Spanish) were granted, per the request of HRS, directly between HSR and NOVACOM, stating that HSR would be the sole beneficiary.

(e) Payments were directly made by HSR to NOVACOM.

61.1n addition to the above mentioned, it is important to emphasize that NOVACOM never negotiated the terms of the WWS tender process with AICSA, nor HSR presented an offer for the WWS works to AICSA. Also, NOVACOM's offer was never approved by AICSA, and as stated before, both, the invitation for tender process (offer for the part of the WWS) and its approval were directly done by HSR.

62. In accordance with the provisions of Article 1285 of the Civil Code of Guatemala, the simulation is relative, when a leva/ transaction is concealed, given a false appearance that hides its true character ... "2

. In this case the "false contractual appearance" was the creation of an apparent formal separation of the real contractual relations, simulating that the WWS contractual relationship for the proposed power generation was solely between AICSA and NOVACOM, which, as stated before, that was not the real nature of the real transaction, since the offer, conditions and other terms of the WWS Agreement were established between HSR and NOVACOM.

23 Article 1284 (1) of the Civil Code of Guatemala states as follow "hay simulaci6n cuando ( .. .) se encubre el caracter jurfdico que se declara, dandose Ia apariencia de otro de distinta naturaleza."

24 Article 1285 of Guatemalan Civil Code states as follows "Ia simulaci6n es relativa, cuando ( .. .)a un negociojurfdico se /e da una fa/sa apariencia que oculta su verdadero caracter ... "



63. Article 1286 of the Civil Code provides that the relative contract simulation, once proven, will produce the effects of concealed legal transaction 25

•

64. NOVACOM will prove that the contractual link of the WWS system was established directly between NOVACOM and HSR, consequently HSR is obligated towards NOVACOM and liable for the legal and economic consequences that are demanded.

XII. NOVACOM's RIGHTS UNDER THE CONTRACT AND THE LAW

65. In accordance to the agreements and the Applicable Law, NOVACOM is entitled (as a consequence of HSR's unilateral decision of terminating the "EPC Agreement" affecting directly the "WWS Agreement") to be paid by HSR, through AICSA, and/or under this tribunal's final conviction for:

(a) The value of the works executed by NOVACOM, (b) The value of materials and costs in which NOVACOM has incurred during the

execution of the contract and (c) The value of the damages that the arbitral tribunal must determine.

66. The above stated is in accordance to the provisions of article 2011 of the Guatemalan Civil Code which states that the owner (HSR) may separate itself from the contract (EPG and WWS Agreements) by paying the contractor (A/GSA and A/GSA to NOVAGOM) the value of the executed works, the materials employed and a compensation set by the judge 26

.

67. The above mentioned, means that, as previously stated, this dispute is not a simple settlement of accounts as claimed by HSR, on the contrary, this dispute it is about HSR honoring and fulfilling with its obligations assumed under the EPC Agreement, and consequently the WWS Agreement, as stipulated in such agreements and the applicable law.

XIII. WWS SCOPE AND AGREEMENT IMPLEMENTATION

68. The WWS Agreement Scope, as determined by the tendering process and subsequent referred to all the aspects of the design, building, commissioning and startup of the water to wire system.

69. The pricing of the WWS Agreement was as follows: The balance of plant (including commissioning and start up) was defined as U$0 1,062,086.00, The complete substations including minor civil works commissioning and start up was defined at U$0 2,376,513.39, The high voltage transmission line (69,000 volts) including concrete supports was defined at U$0 1 ,320, 206.25 and the Optical fiber between the power plant and the interconnection substation was defined at U$0 90,000.00. The turbines (including commissioning and start up) was defined by the sum of EURO 5,692,290.00, and the generators (including commissioning and start up) was defined by the sum of U$0 4, 113,840.13. All of the mentioned values as per Exhibit M-1 27 (amended and restated on February 20, 2013) and

25 Article 1286 of Guatemalan Civil Code states as follows " ... La simu/aci6n relativa, una vez demostrada, producira los efectos del negocio juridico encubierto ... "

26 Article 2011 of the Guatemalan Civil Code states as follows: "EI dueno puede separarse del contrato pagando a/ contratista el trabajo realizado, los materiales empleados y Ia indemnizaci6n que fije e/ juez"

27 See EXHIBIT CR· 20: A true and correct copy of the Exhibit M-1 of the "W#S Agreement" is attached hereto as Exhibit CR-20.



resulted in a total contract value of US$ 8,712,647.29 Dollars of the United States of America and EUR€ 5,692,290.00.

70. All of the elements of the Water to Wire System, as well as the scope of the WWS Agreement, including the price for the generator and turbine system, complete substations, power transformers and power lines were of prior knowledge and acceptance of HSR.

71. NOVACOM, in good faith and on the basis that HSR had been awarded the tender for WWS work began to implement the contract before the EPC and WWS agreements were formalized.

72. In fact, once NOVACOM was awarded the tender by HSR, NOVACOM began to perform basic engineering work (work that was performed under the knowledge of HSR). The basic engineering work performed by NOVACOM began since October 2009.

73. The WWS contract started its implementation as follows:

A. LIMITED NOTICE TO PROCEED (LNTP)

74. AICSA (under the EPC contract) issued, on February 22th 201328, a Limited Notice to

Proceed (LNTP) by the amount of USD$ 250,000.00. The referred payment was covered by AICSA by paying that amount to NOVACOM on February 22th 2013. 29

75. According to the "WWS Agreement", the FIRST MILESTONE (contained on Exhibit M-1 of the WWS Agreement), executable under the LNTP, was item G1.2; which specified that US$ 250,000.00 Dollars had to be applied to the turbine design and preengineering.

76. These specific funds were immediately transferred to Litostroj in the amount of EURO 200,000.00 Euro.30

77. The funds assigned to NOVACOM as part of this Limited Notice to Proceed (LNTP), are considered as "indisputable" and not subject of reimbursement, in accordance with clause number four (4) of the Limited Notice to Proceed, that provided as follows "the Contractor, may, at any time and at its sole discretion, terminate this limited notice to proceed, upon written notice to the Subcontractor (something considered occurred upon the notice of termination of the Agreement, rendered by the Contractor on march 16, 2015). Subcontractor shall be entitled to keep the payments for all direct and indirect cost transferred to the Contractor in the execution of the works to the effective day of termination"

78. Once HSR decided unilaterally to terminate the EPC contract through written communication dated 16 March 2015; AICSA informed NOVACOM of the termination of the WWS contract through written communication on that same date. Nonetheless, as stated above, it must be noted that the funds assigned to the Subcontractor as part of the limited notice to proceed (US$ 250,000.00 Dollars) are considered as "indisputable" and not subject of reimbursement, to either the Contractor or the Owner.

28 See EXHIBIT CR-8: which contains the Limited Notice to Proceed (LNTP) issued on February 22th 2013.

29 See EXHIBIT CR- 9: which contains a copy of the wire transfer made from AICSA to NOVACOM, related to Limited Notice to Proceed (LNTP)

30 See EXHIBIT CR-10: which contains a copy of on the Bank Transfer made to Litostroj.



B. NOTICE TO PROCEED (NTP)

79. The owner (that is HSR) on July the 41h 2013 issued correspondence HSR-AIC-003-2013,

which contained the FORMAL NOTICE TO PROCEED (NTP) instructing AICSA to implement the execution of the work, related to the EPC, including the works related to the WWS (under the EPC contract). As a result, AICSA proceeded to issue NOTICE TO PROCEED to NOVACOM within correspondence AIC-NOV-003 dated July 51

h 2013, so that NOVACOM commenced with the execution of each and every one of its obligations under the "WWS agreement" previously agreed and approved by HSR, including but not limited to Basic and advanced design on turbines and penstock, basic and advanced design of generator systems and length of shafts and bearings, basic and advanced design of two power substations including power transformers (elevation and interconnection) and basic and advance design of power line (69,000 volts) including fiber optic OPGW system.

80. As a consequence of the above mentioned, from the issuance of the NTP, NOVACOM initiated with the execution of the WWS Agreement, whose works executed by NOVACOM are listed forward.

XIV. ISSUANCE OF PURCHASE ORDERS FOR CONSTRUCTION FOR THE TURBINE AND THE GENERATOR SYSTEM

81. Pursuant to the NTP, and in order to comply with the first milestones indicated in Exhibit M-1, NOVACOM proceeded to issue purchase orders to the following entities: (a) The entity Litostroj, for the construction of the turbines; and (b) the entity Hyundai Ideal, for the construction of the generators.31

82. The turbines would be built in Slovenia place where the entity Litostroj is headquartered, while the generators would be built in the United States of America, place where the entity Hyundai Ideal is headquartered.

83. The value of the turbine and generator system, as well as the entities in charge of the construction were defined in Annex B-1 of the EPC contract, so the price, features and the selected suppliers (Litostroj and Hyundai Ideal) as the price for all of the WWS Scope were of prior knowledge and acceptance of HSR.

84. In that order of ideas, the price agreed upon for the turbines (including commissioning and start up) was defined by the sum of EURO 5,692,290.00, while the price agreed upon for the construction of the generators (including commissioning and start up) was defined by the sum of U$D 4, 113,840.13.

85. It was NOVACOM who undertook all the commitments and payment obligations (and the liability exposure) towards all the suppliers of the water to wire equipment including, power transformers switchgears, circuit breakers, power lines, and evidently, the turbine and generator system indeed, with the mere act of issuing the purchase orders to the suppliers of the turbine and generator system (Litostroj and Hyundai Ideal) NOVACOM accepted full responsibility for the payment of the sums of money contracted.

31 A true and correct copy of the Exhibit M-1 of the "WWS Agreement" is attached hereto as Exhibit CR-20.



86. Given that HSR created a separate contractual structure, as previously explained, HSR did not acquire any direct commitment or liability, nor HSR signed any contract with the suppliers (Litostroj and Hyundai Ideal). The only one who assumed full responsibility towards the suppliers, as previously stated, was NOVACOM.

87. Consequently, HSR as the main party obligated, was required to ensure and guarantee NOVACOM that all payments due for the construction of the turbine and generator system should have been actually paid, which should have been done through an irrevocable letter of credit in favor of NOVACOM (as the main and only obligated party towards the suppliers).

88. Notwithstanding that an irrevocable letter of credit should have been provided in favor of NOVACOM, HSR requested that in lieu of the referred letter of credit a payment schedule with specific down payments be accepted. As such, NOVACOM would receive (through AICSA) on the dates set forth on the payment schedule, the amounts indicated, regardless of any reason that could affect HSR or AICSA, since, by issuing the purchase orders to the suppliers the obligation of payment assumed towards Litostroj and Hyundai Ideal was whole.

89. Nevertheless, instead of insisting on an irrevocable letter of credit, NOVACOM, confided in HSR, and in good faith agreed to the payment schedule, which would be made as follows:

(a) Construction of Turbines: a price of EURO 5,692,290.00 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

(b) Construction of Generators: a price of U$D 4,113,840.13 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

(c) Design, construction, commissioning and startup of a complete balance of plant system for the project a price of U$D 1,062,086.00 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

(d) Construction of two complete substations including power transformers and high voltage switchgear; a price of U$D 2,376,513.39 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

(e) Design and construction of a 15 kilometer 69,000 volts transmission power line a price of U$D 1,320, 206.25 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

(f) Design and commissioning and testing of 15 kilometers optic fiber connecting both project substations a price of U$D 90,000.00 was agreed with HSR. Also it was agreed that such price would be paid by HSR, under the EPC contract, against the completion of 5 milestones after notice to proceed was given, as indicated in Exhibit M-1.

90. The amounts and dates of payment for the construction of the turbine and generator system, should been made by HSR, under the following Payment Applications:

(a) A first payment under Limited Notice to Proceed was Given, for the amount of $USD 250,000.00 Dollars (which was paid on February 221

h, 2013); (b) Payment Application number two (2) when Notice to Proceed was issued (July 51

h) for the amount of USD$ 697,109.58 Dollars and EU€ 1,138,458.00 Euros; (Paid until July 1 ih), The Euros on this payment were made directly by HSR, again demonstrating that



the real substantive contractual relationship was between HSR and NOVACOM 32.

These specific funds were immediately transferred to the turbine and generator system manufacturers for the intended purposes as follows: a) To Litostroj: EURO 1 ,000,000.00, b) To Hyundai Ideal USD$297,840.00.33

(c) Payment Application number three (3) and number four (4) when purchase orders for the turbine and generator system were signed and issued, for the amount of USD $332,651.74 and EU€736,856.82 Euros. (This payment was defaulted by HSR)34

XV. THE PAYMENTS MADE BY HSR FOR THE WWS AGREEMENT CONSTITUTE PAYMENT APPLICATIONS {OR DOWNPAYMENTS)

91. For legal purposes, it is relevant to note the nature of the "payments on account" of its obligations that HSR made under the EPC Agreement in the aspects pertaining to the WWS and that were transferred to NOVACOM.

92. HSR on its request for arbitration refers to "Advanced Payments" and, under such concept, indicates that the claim refers solely to a "return of indisputable amounts" which were given in "Advance".

93. NOVACOM categorically denies that it has to return amounts of money that where received from AICSA under the WWS Contract and which AICSA received from HSR under the EPC contract, as those payments were made "on account of obligations assumed by NOVACOM towards its suppliers, among others, to those suppliers in charge of the construction of the turbine and generator systems."

94.1ndeed, when NOVACOM received the NOTICE TO PROCEED, NOVACOM, as part of the WWS contract implementation, issued the Purchase Orders for the turbine and generator systems and as such the acquired "obligation to construct and pay" for the construction of said equipment was absolute and consequently the payment obligation on behalf of HSR, as a final beneficiary, was also whole.

95. HSR requested a payment calendar to cover its obligations of payment for the amounts of money associated with the indicated milestones. As such, the payments made where in no way advanced payments but payment applications (or down payments) towards HSR's payment obligation.

96. The fact that the bonds and some exhibits refer to the payments as "advanced payments" does not imply that the true nature was that of a money advancement but, as indicated and as will be demonstrated throughout this arbitrage, the payments where actually payment applications or down payments which means that they are not reimbursable to HSR. It is also important to note that when relating payments along the Agreements, the term used is, in fact, Payment Application.

97. More so, the main reason these are actual payment applications (or down payments) and are not reimbursable, is that NOVACOM is the sole responsible party towards third party

32 See EXHIBIT CR-11: Which contains the wire transfer of Payment Application number two (2) for the amount of USD$ 697,109.58 Dollars and EU€ 1,138,458.00 Euros; (Paid until July 1 ?'h).

33 See EXHIBIT CR-12: Contains copy of the transfers orders made to Litostroj and Hyundai ideal 34 The remainders of the Payment Requirements were not issued as the contract was suspended and then terminated.



suppliers, and this exposure entails that the received payments are Payment Applications (or down payments) are destined to the fulfillment of the referred obligations.

XVI. PAYMENT APPLICATIONS NUMBER 3 AND NUMBER 4

98. Since NOVACOM acquired direct and personal commitments towards its suppliers (Litostroj and Hyundai Ideal), on August 28th35 and 29th36 2013, NOVACOM presented to AICSA, PAYMENT APPLICATIONS Number 3 and Number 4 respectively. These payment applications are related to MILESTONE P1.1 of Exhibit M-1 and MILESTONE P2.1 of M-137.

99. AICSA, meanwhile, requested HSR the payment of the amounts that NOVACOM required AICSA through written communication dated August 29th of 2013. Therefore, HSR, under the EPC contract, received from AICSA, on August 29th of 2013, the following payment requirements by NOVACOM as follows:

(a) Payment Application number 3 through AIC-NOV-008-2013 dated August 28th for the amount of EU€ 616,856.82 Euro, destined for the application towards the turbine system.

(b) Payment Application number 4 through communication AIC-NOV-011-2013 dated August 29th for the amount of USD$332,651.74 and EU€ 120,000 Euros, destined for the application towards the generators.

XVII. BAD FAITH AND BREACH OF PAYMENT OBLIGATIONS BY HSR

100. HSR was aware of its payment obligations under the Payment applications number 3 and number 4, which were transmitted to HSR by AICSA as AICSA Payment Application No. 4. HSR also knew that these payment obligations had to be complied with at the latest on the 28th and 29th of September of 2013 respectively. Nonetheless, HSR began (through AICSA) a process of requirements and questions that NOVACOM should answer.

101. Both of the above referred PAYMENT APPLICATIONS Number 3 and Number 4were presented as per required in the WWS Agreement ( item 6.6 (literal b), Item 25.2 (literals a, b, c and d); 25.3 (sub items i, ii, and iii.) and also, in accordance to item 25.4 "Term and Place of Payment" (literal a) of the WWS Agreement; that state that the Payment of amounts owed pursuant to properly submitted Payment Applications must be made by Contractor, without any further requirement the amount approved and contained in the pertinent Payment Application within the term no to exceed thirty (30) days from the date on which Contractor receives any of such request (the "Payment Term").

102. As there were no additional comment(s) neither by Contractor or the Owner, on the following days of the submittal of these Payment Applications (Number 3 and Number 4) and nearly reaching the time deadline of the 30 days from their rendering, the Subcontractor sent a reminder to the Contractor, on September 24th 2013, of the amounts due.

35 See EXHIBIT CR- 13: which contains Request for Payment Application number 3. 36 See EXHIBIT CR-14: which contains Request for Payment Application number 4. 37 As indicated before, these payments were conveyed to HSR by AICSA as Payment Application 4.



103. HSR intended to avoid its payment obligations and forwarded to (through the AICSA) a document (referenced HSR-AIC-007)38 disingenuously issued by the Owner (HSR), clearly with the purpose to delaying payment, requesting "last minute questions" or "comments" to the Purchase Orders to Litostroj and Hyundai Ideal Electric Co. enclosed on both of the Payment Applications (Number 3 and Number 4)

104. Notwithstanding that the Payment of amounts owed pursuant to properly submitted Payment Applications must be made, without any further requirement, HSR maliciously initiated a process of questions and requirements, seeking to overwhelm NOVACOM and with a clear intention to avoid its payment obligations. It is relevant to clarify that:

(a) The majority of the terms, conditions, designs and details of the turbine and generator system were set forth by the Owner itself (HSR) during the tender process that initiated its relationship with NOVACOM.

(b) Most of the information that the Owner (HSR) used to justified these raised questions or "comments" to the Payment Applications (Number 3 and Number 4), was either related to engineering data that had been previously discussed, upgraded and/or modified accordingly during the basic engineering advanced by our sub subcontractors, and furthermore, information that was already either enclosed as Exhibits on the WWS Agreement.

105. The above mentioned is clear evidence that that these questions were dilatory tactics from HSR in order to avoid fulfilling its payment obligations. Nevertheless NOVACOM made extensive efforts to provide answers to each and every question raised by HSR and submitted the required responses to all the questions set forth by HSR in correspondence NOV-AIC-013-201339 dated September 301

h 2013, thereby addressing all of the concerns raised. Regardless, neither the EPC Contract nor the W2W Contract allow for nonpayment of the Payment Application due to comments by the Owner.

106. It is important to note that HSR malicious attitude came to the point that many of the questions were formulated nearly hours before of the expiration of the date on which HSR should have made the payments required by AICSA and destined for NOVACOM.

107. HSR failed in its payment obligations, since it did not pay to AICSA any amount of money on the 28th and 29th September 2013 and consequently AICSA could not pay NOVACOM. Since, HSR failed to carry out its payment obligation, in accordance with the EPC Agreement, as well as in accordance with the laws of Guatemala, HSR defaulted on its obligations towards both AICSA and NOVACOM.

108. Conveniently for HSR, only two days later (on October the 01, 2013), HSR issued the declaration of the alleged Force Majeure and communicated its decision to suspend the Agreements and set its refusal of paying the Payment Applications (Number 3 and Number 4). HSR on written communication dated October 1, 2013, based on clause 18 of the EPC contract, communicated to AICSA its decision to suspend the EPC contract under "force majeure" instructing AICSA to "immediately" suspend all work under the EPC, including the construction of equipment under WWS contract (turbine and generator system).

38 See EXHIBIT CR-15: which contains questions raised by HSR to Payment Applications (Number 3 and Number 4).

39 See EXHIBIT CR-16: which contains NOVACOM's response to HSR's questions raised to Payment Applications (Number 3 and Number 4)


Hidroe/ectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) eta/. 20 ICC ARBITRATION No. 21398/RD

109. AICSA, through correspondence dated October 2, communicated to NOVACOM of HSR's decision to suspend the execution of the works, including the construction of the equipment under the WWS contract.

XVIII. BAD FAITH AND ABUSE OF RIGHTS BY HSR

110. As stated before, HSR acted in notorious bad faith by suspending the EPC contract, affecting directly the WWS contract, by issuing a declaration of "Force Majeure". The cause of "force majeure" invoked by HSR did not affect the compliance of its payment obligations. In the same way it did not affect NOVACOM's rights or obligations including the obligations NOVACOM had towards its suppliers. Also, HSR did not specify, in its communication, which was the "act" or "event" that constituted the alleged "Force Majeure".

111. HSR did not comply with the procedures provided in section 32.2 of the EPC contract that was mandatory for invoking the force majeure, and in order for AICSA and NOVACOM to object to the alleged "Force Majeure".

112. It is relevant to highlight that, when HSR exercised its right to suspend the EPC contract (affecting the WWS contract directly), HSR was already in payment default of sums it had to pay on the 28th and 29th of September 2013 of the PAYMENT APPLICATIONS Number 3 and Number 4 respectively.

113. HSR, without being party to the purchase orders placed for the construction of the turbine and generator system, in an abusive manner instructed AICSA to suspend the construction of the turbine and generator system, works that were directly hired by NOVACOM under WWS contract.

114. HSR, in an abusive manner exercised its right to suspend the EPC contract, affecting the WWS contract, exposing entirely and directly NOVACOM's responsibility towards the suppliers of the turbine and generator system.

115. HSR, in an abusive manner exercised the suspension of the contract and, once HSR declared the suspension, HSR failed to meet its payment obligations under the EPC contract, affecting the WWS contract.

116. HSR abused of its dominant position in the EPC contract, affecting the WWS contract, since neither AICSA nor NOVACOM had the funds to meet its contractual obligations, especially NOVACOM towards the suppliers of the turbine and generator system (payment obligations that HSR knew that had been previously assumed directly by NOVACOM).

117. HSR abused of its dominant position by ordering the suspension of the construction of the turbine and generator system under purchase orders to which HSR was not a party, therefore HSR could not be sued by the suppliers, nonetheless HSR knew that the suppliers can sue NOVACOM.



XIX. REGARDING THE LACK OF CAUSE OF "FORCE MAJEURE"

118. HSR did not follow contractual procedure: The event was not notified within the timeframe indicated by section 33.1 a) (ii) of the EPC Agreement, i.e. within five business days of occurrence, and "with the specific indication of the event and a description thereof'. Furthermore, it did not comply with section 33.2 "Obligation to Report" which indicates the party invoking Force Majeure must send to the other party a report describing with the greatest possible detail, the nature, causes and effects of the Force Majeure on the possibility of compliance, as well as the actions needed to overcome the effects. As stated before, HSR did not specify in its communication dated October 1st 2013, which was the act or event constituting force majeure; It was not until October 171

h 2013 40, and only as a result of the

enquiry made by NOVACOM on October 9,41 that HSR very vaguely indicated AICSA (and consequently to NOVACOM) which was "the event" of the force majeure that had forced HSR to suspend the contract by stating the following: " ... due to Riots and Social Disturbances of the public order, had led to acts of terrorism, and that due to Government Authorities incapacity to take actions there has been an adverse impact on the Works."

119. The alleged Force Majeure cause failed to have the main and most relevant characteristic of Force Majeure which is duly established in Section 33.1 a) of the EPC Agreement, that is, "that such a delay, impossibility or disability could not have been reasonably anticipated, foreseen or prevented by the adoption of reasonable measures by said Party": The area where the project was to be developed is notorious for having delicate community relations that must be handled with the utmost care. More so, HSR had such problems since the year 2009. Evidence of such problems and confrontations may be found in many publicly accessed websites.42

120. HSR did not comply with Section 33.1 a) (iv) "the Party affected by the Force Majeure employs all its reasonable efforts to remedy its inability to comply with the obligations entrusted to it": Even though HSR did go as far as to involve NOVACOM within the scope of the suspension, after doing so it never indicated which activities were being employed to remedy the supposed force majeure cause. After the vague note sent on October 17'h, that absolutely failed to comply with the requirements of a formal declaration of

40 See EXHIBIT CR-17: Which contains correspondence from AICSA to NOVACOM, which includes a copy of the letter from HSR addressed to AICSA regarding request from "Force Majeure" event explanation.

41 See EXHIBIT CR-18: which contains the related correspondence.

42 Evidence of such problems and confrontations may be found in many publicly accessed websites. See the following links: o "Hidroelectricas en Ia cuenca del rio lcbolay: entretelones de Ia hidroelectrica Santa Rita"

http://www. albed rio. org/htm/otrosdocs/comu nicados/Enfoq ueNo31 HidroelectricaSantaRitaDiciembre2013.pdf' o Denuncia Publica contra Hidro Santa Rita en Alta Verapaz" http:l/comunitariapress.blogspot.com/2013/02/denuncia-publica

contra-hidro-santa.html o "DENUNCIA PUBLICA"" https://es.scribd.com/doc/125841565/DENUNCIA-PUBLICA-CPT o "Autoridades q'eqchi'es de Tezulutlan presentan oposici6n a hidroeh~ctrica ante las Naciones Unidas"

https://cmiguate.org/autoridades-qeqchies-de-tezulutlan-presentan-oposicion-a-hidroelectrica-ante-las-naciones-unidas/ o "Santa Rita se hunde en las arenas del tiempo" https://www.plazapublica.com.gt/content/santa-rita-se-hunde-en-las-arenas-del

tiempo o "Los rostros de un conflicto mortal"

http:/lelpais.com/elpais/2015/04/07/album/1428361356 964802.html#1428361356 964802 1428366678 o "HIDROELECTRICA SANTA RITA, ENTRE LOS DERECHOS 0 LA INVERSION"

https://www.urgewald.org/sites/default/files/maximo ba tiul.pdf o "i.Vecinos de Hidro Santa Rita firman acuerdo con Ia Empresa y el Gobierno?" https://cmiquate.org/vecinos-de-hidro-santa

rita-firman-acuerdo-con-la-empresa-y-el-qobierno/ o Marcha indigena campesina y popular (Empleado de Hidroeh~ctrica Santa Rita dispara contra dos niiios de Ia comunidad

Monte Olivo, Alta Verapaz.) https://www.facebook.com/permalink.php?id=207724279334698&storv fbid=465683836872073



"Force Majeure" as per requested and detailed on the agreement, the only communication received regarding the alleged Force Majeure cause or its development,_was a letter dated January 6th 2015,43 where HSR is confirming that the project suspension "is expected to remain until early 2016", and that "in order to best manage the financing of the Santa Rita project under current conditions, HSR is requesting the collaboration of AICSA and NOVACOM to identify the level of work performed to date and the use of the funds advanced by HSR in accordance with the EPC. This information will allow us (HSR) to have a clearer view of how to move forward with respect to the EPC and W2W contracts, once such situation changes." As is evident, nothing in that letter gives any indication as to what actions are being taken, or how those actions affect HSR main responsibility towards NOVACOM, which is payment. Even more relevant, to this point NOVACOM had received no indication as to what the detailed cause of the Force Majeure was or how it affected performance of its responsibilities outside the project site and specifically, towards its pending payment obligations.

121. HSR did not comply with Section 33.1 a) (v) "When the Party affected by the Force Majeure is capable of reinitiating the fulfillment of its obligations under the Agreement, then such Party must notify the other Party promptly, but no later than five (5} Working Days following the extinction of the Force Majeure( ... )": Since the moment HSR notified the suspension of the contract, and until termination, it never indicated the ceasing of the Force Majeure cause, nevertheless it did inform Comercia/izadora Electrica De Guatemala, Sociedad An6nima -COMEGSA-, the entity with whom they had a Power Purchase Agreement, that the event that had caused the alleged "force majeure" was concluded on July 31 2014.

122. HSR did not comply with Section 33.1 a) (iii) "the suspension of the compliance obligations does not go beyond the scope and the term that is directly impacted by the respective Force Majeure": Even if the alleged case of force majeure had been valid, it only could have affected AICSA's obligations under the EPC contract (in all that was related to the construction of civil works in the site). Nevertheless, the construction equipment was not affected since Litostroj was doing the construction of the turbines in Slovenia and Hyundai Ideal was constructing the generators in the United States. (off-site manufacture of the turbine and generator system) Furthermore, the delivery of equipment on-site was not scheduled to happen for more than a year after the alleged cause was cited for suspension. The fact that HSR pretended to affect activities that were not in the scope of the Force Majeure, and were not going to be for a long time, evidences the fact that its malicious intent was always to terminate the agreements, but only until it could collect the money from the bonds first.

123. HSR did not comply with Section 33.1 a) as the "Delay, partial or total impossibility or disability to comply with those obligations that have a material adverse impact on performance under the Agreement and that insofar as that delay did not affect its due obligations." In the case that the aforementioned alleged cause of force majeure had been valid, HSR's ability to comply with its payment obligations, that is, its main obligation due towards NOVACOM, was in the least affected by the alleged cause, since HSR does not have, nor has had its headquarters on the location of the site, (this is Coban, Department of Alta Verapaz); nor the alleged acts under which force majeure is invoked affected the source of income or wealth that HSR had to have to fulfill its obligations as id did not affect local or international sources of income in no way whatsoever.

43 See EXHIBIT CR-19 which contains letter dated January 6th 2015, from HSR addressed to both AICSA and NOVACOM, stating that the project suspension "is expected to remain until early 2016".



124. Hence, HSR maliciously and in an abusive way, invoked the suspension of the EPC contract, affecting the WWS contract, since the alleged acts constituting force majeure did not affect the construction of the turbine and generator system or HSR payment capacity (as the principal party obligated to comply with the payment for the construction of such equipment.)

XX. HSR IS THE ONLY PARTY THAT IS RESPONSIBLE FOR THE SITE INVASIONS and DISCONTENT OF THE COMMUNITIES

125. In addition to the fact that the cause of "force majeure" invoked by HSR was not a force majeure event that affected the ability for fulfillment of the obligations of HSR and/or the construction of the turbine and generator system; is important to note that the only responsible for the invasions occurred and destruction on the site was exclusively HSR.

126. HSR did not comply with Section 33.1 a) (iv) which indicates that in order for an exemption of obligation to apply "the Force Majeure has not been caused (whether as a result of negligence, gross negligence or willful misconduct) by the Party that seeks to be excused from the fulfillment of the obligations entrusted to it, nor because of the lack of compliance with any law (including the Laws) by said Party, in each case by its employees or agents or its Subcontractors or by default by that Party with regard to the Agreement": Indeed, as will be demonstrated in the course of this arbitration process, HSR failed to comply with the COMMUNITY RELATIONS PLAN that it was required to implement, as stated in Exhibit C-3 of the "EPC agreement' (The Community Relations Plan), elaborated by the entity "CEDER".

127. From the beginning it was clear to NOVACOM that managing the relations with the local community was directly responsibility of HSR, as the same "Community Relation Plan" is included as Exhibit C-3 of the "WWS Agreement" with the indication that it was prepared by the Owner. 44

128. HSR, in its Request for Arbitration, maliciously distorts the facts to make believe that community relations were not its obligation, which is not true, because as authorized by the State of Guatemala, that obligation was imposed directly upon HSR. HSR as the owner of the project has the "corporate social responsibility" to create conditions of coexistence, harmony and development in the local community because of the impact HSR has on the use of water resources of lcbolay River. Furthermore, Exhibit C-3 of the Agreement specifically refers to the entity CEDER that is a direct contractor to HSR, and the obligations towards the Contractor and Subcontractor are clearly set forth as passive obligations, i.e. a simple obligation not to intervene or disrupt.

129. Several act of non-compliance of HSR towards the local communities can be found online at sites indicated in section 109 of this document.

130. Evidence that the HSR was responsible for the non-compliance of HSR towards the local communities are revealed when other entities that engaged in similar projects in the same area of Rio lcbolay in Goban, Alta Verapaz, properly managed their community relations, as in the case of the following Projects:

44 A true and correct copy of the Exhibit C-3 of the "WWS Agreement" is attached hereto as Exhibit CR-21.



(a) Proyecto Central Rocja Pontila which is currently executing construction activities and (b) Hidroelectrica Raaxha which is currently initiating proceedings to connect to the

Guatemalan main electric grid.

XXI. WWS CONTRACT EXECUTION

131. As will be demonstrated in the course of this arbitration, NOVACOM fulfilled its obligations under the WWS contract when it issued purchase orders to Litostroj and Hyundai Ideal tor the construction of the turbine and generator system, and therefore complied with the corresponding milestones:

(a) P1.1 Purchase Order Awarded and Issued to supplier Litostroj and (b) P1.2 Purchase Order Awarded and Issued to supplier Hyundai Ideal.

132. The fulfillment of those milestones implied that NOVACOM was one hundred percent (100%) responsible towards the suppliers; in other words, its obligation and responsibility towards the suppliers was not assumed partially or by stages, on the contrary, it was completely assumed from the moment the purchase orders were placed, as whole.

133. The compliance of the milestones related to hiring the entities in charge of the construction of the turbine and generator system, is evident, since HSR knew perfectly that neither AICSA or NOVACOM constructed the equipment, but the equipment would be built by Litostroj and Hyundai Ideal, as defined in Annex B-1 and as defined in the offer (within the tender process) submitted by NOVACOM in October 2009.

134. The fact that NOVACOM had contracted the construction of the turbine and generator system, exposed NOVACOM to the fulfillment of one hundred percent (100%) of its assumed obligations towards the suppliers.

135. There is a materialization of HSR's bad faith and abuse of rights when HSR, under its dominant position in the contract, leaves NOVACOM exposed to being held personally responsible towards the suppliers by HSR failing to pay the amounts owed for the construction of the equipment and furthermore, by refusing to fulfill its payment obligations by citing a nonexistent Force Majeure, which did not affect the construction of said equipment.

136. The defaults as well as the malicious and abusive exercise of rights by HSR under its position of dominance, grant NOVACOM rights to demand payment of damages, including the payment for punitive damages in favor of NOVACOM, in addition to other rights that were granted to NOVACOM under the WWS contract and the laws of Guatemala, as stated in this reply.

XXII. COMPLIANCE OF NOVACOM UNDER WWS CONTRACT

137. As stated, NOVACOM, under WWS contract, met the following milestones: (a) P1.1. Purchase Order Awarded and Issued to supplier Litostroj y (b) P1.2 Purchase Order Awarded and Issued to supplier Hyundai Ideal.

138. Compliance of the milestones mentioned in this section was duly fulfilled by NOVACOM when it sent a Signed Copy of the Purchase Orders duly issued to Litostroj and Hyundai Ideal in complete accordance with the payment criteria.


Hidroelectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) et at. 25 ICC ARBITRATION No. 21398/RD

139. In addition, NOVACOM complied with every obligation set forth on the WWS Contract and never defaulted or was indicated as in default of its obligations for each and every aspect of the water to wire systems.

140. NOVACOM, due to the malicious and abusive acts exercised by HSR when suspending the compliance of both, the EPC and WWS agreements, ceased to complete the payments for the construction of the turbine and generator system.

141. Nevertheless, NOVACOM bears no responsibility for the lack of termination for the construction of the turbine and generator system, since, as stated before, it was HSR who maliciously and abusively ordered the suspension of EPC and WWS contracts. Therefore, NOVACOM was at no point, in default of its obligations.

XXIII. MALICIOUS MAINTENANCE SUSPENSION OF WWS CONTRACT

142. HSR purposely and with ill intent, maintained the suspension of the execution of the Works, from October 15

T 2013 to March 16 2015. That is, the suspension remained in effect for almost two years.

143. As indicated, HSR never rehabilitated the EPC and WWS contracts, however, in hidden way informed Comercializadora Electrica De Guatemala, Sociedad An6nima -COMEGSA- that the event that had caused the alleged "force majeure" was concluded on July 31 2014.

XXIV. HSR MALICIOUS INTENT TO CLAIM THE RETURN OF ADVANCED PAYMENTS

144. HSR pretended at several meetings it had with AICSA, that both, NOVACOM and AICSA, returned the sums of money related to the advanced payments under the EPC and WWS Agreements.

145. HSR pretended to obtain the devolution of the advance payments under the WWS contract, disregarding the fact that NOVACOM was committed, one hundred percent (100%) to the fulfillment of the equipment construction contracts it had signed with the suppliers of the turbine and generator system and as such, had already advanced the monies required to that effect.

146. HSR pretended the reimbursement of sums of money during the term of the EPC and WWS contracts. However, there is not one single contractual provision that entitled HSR to request from AICSA or NOVACOM reimbursement of such sums of money during the suspension of the contract (and hence no contractual obligation on their behalf to do so).

147. HSR pretended to obtain the devolution of the advance payments during the term of the EPC and WWS contracts, without recognizing the rights of NOVACOM for the work performed and its costs incurred.


Hidroe/ectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) eta/. 26 ICC ARBITRATION No. 21398/RD

XXV. NOVACOM IS NOT OBLIGATED OR REQUIRED TO INFORM HSR ABOUT THE STATE AND EXECUTION OF THE PURCHASE ORDERS.

148. HSR in its request for arbitration indicated in sections B) and D) that, when HSR requested AICSA to provide an accounting of its actual costs incurred in the Project NOVACOM alleged further contractual costs that where never supported.

149. HSR, during the process of seeking the reimbursement of the sums of money of the advanced payment from NOVACOM and AICSA, HSR also requested, among other things, that NOVACOM disclosed and provided information relating certain requirements for the construction of the turbine and generator system accounts.

150. In accordance to the offer presented by NOVACOM to HSR and in accordance with the terms of the EPC (Annex 8-1), HSR agreed to a price of EURO 5,692,290.00, while the price agreed upon for the construction of the generators (including commissioning and start up) was defined by the sum of U$D 4, 113,840.13. The balance of plant (including commissioning and start up) was defined as U$0 1 ,062,086.00, The complete substations including minor civil works commissioning and start up was defined at U$D 2,376,513.39, The high voltage transmission line (69,000 volts) including concrete supports was defined at U$0 1 ,320, 206.25 and the Optical fiber between the power plant and the interconnection substation was defined at U$D 90,000.00. All of the mentioned values as per exhibit M1 of the WWS Agreement.

151. Additionally, in accordance to the offer presented by NOVACOM to HSR and in accordance with the terms of the EPC (provisions of Annex B-1), HSR accepted the time table required for development of the water to wire activities as well as approving the entities who would be assigned as responsible for the construction of the generator and turbine system, who would then be hired directly by NOVACOM.

152. The type of relationship under which NOVACOM assumes responsibility of the obligations towards the suppliers of the turbine and generator system is of an independent nature and only applicable to the parties; that is, NOVACOM is responsible towards AICSA and HSR for the compliance of its obligations under the WWS contract but this relationship does not entitle either entity to apply control over the execution of the relationships between NOVACOM and its suppliers.

153. The lawful earning of NOVACOM was already calculated by NOVACOM in its offer and was included in the price accepted by HSR and defined in the EPC and WWS contracts.

154. As such, other than the validation of milestones reached, neither HSR nor AICSA can, while a contract is still in execution, require the review and audit of NOVACOMs signed contracts with the suppliers of the turbine and generator system, as HSR was not a party of such contracts. Nevertheless, and considering the contract was still in force, NOVACOM made its best efforts to reply to HSR's numerous requests for information.

155. Also, HSR could not influence or make any determination of suspension of construction of the equipment, because HSR was not party of the contracts for the construction thereof; consequently, the decision to suspend and not pay can only be deemed as illegal, since HSR failed to pay the sums of money that it was required to pay under the EPC and WWS contracts for the construction of the referred equipment.



156. The only obligations and the only rights that HSR could be entitled to, are those that were granted to it under the EPC contract, in no way, during the execution of a contract, HSR's rights can be extended to other contracts to which HSR is not a party, including (but not limited to) contracts signed by NOVACOM for construction of equipment.

XXVI. HSR ACTED IN BAD FAITH BY ATTEMPTING TO COLLECT 100% OF THE VALUE OF THE BONDS

157. Maliciously, HSR had requested AICSA to consolidate the bonds of the advance payments. These bonds had previously been issued separately by both, AICSA and NOVACOM, in favor of HSR.

158. HSR, while the contract was still in force, initiated a process of collecting of the bonds, and requested from the bonding company (SEGUROS PRIVANZA) 100% of the value of the bonds (that were previously consolidated in AICSA) seeking to obtain the 1 00% of the amounts of the advanced payments without recognizing, under the EPC and WWS contracts, the value of the work executed by NOVACOM and the responsibilities assumed by it towards the suppliers of the turbine and generator system. Consequently, AICSA proceeded to execute the bond NOVACOM had placed towards AICSA.

159. HSR failed in its attempt to obtain from the bonding companies, 100% of the amount of money given as advance payments under the EPC and WWS contracts.

XXVII. TERMINATION OF THE EPC AND WWS AGREEMENTS

160. According to section 30.1 of both EPC agreement, and replicated on the WWS Agreement, HSR has the right to terminate the EPC contract under two situations: (i) At its sole discretion that is, when convenient, as indicated in section 30.1 a) of the "EPC Agreement" and; (ii) As a result of material breach from Contractor as indicated in literal b) of the cited section. 30.1 of the "EPC Agreement"

161. HSR by means of a communication dated march 16th 2015 exercised its right under clause 30.1 to terminate the EPC contract, however in its communication addressed to AICSA it did not indicate which event was provoking the termination, that is, if it were to be as a result of its sole discretion under literal a) or as a result of literal b) of section 30.1, i.e. "non compliance" on behalf of Contractor. The referred communication was forwarded by AICSA to NOVACOM.

162. Even though HSR didn't quote any of the indicated literals -a) or b)- of section 30.1, it did hold AICSA accountable for the contract termination when it indicates that AICSA has failed to provide the documentation regarding costs incurred during the project. It is clear then, that HSR considered that its decision to terminate the contract was AICSA's responsibility and therefore HSR should have quoted literal b) of section 30.1 of the EP'C Contract.

163. HSR indicated on its claim on paragraph 51 that: "the HSR elected to terminate the Contract for convenience, pursuant to Section 30.1 (a) of the Contract." Even more deceptively, it states, in paragraph 76 that: "Section 33.3(c) of the Contract provides: Should



the Force Majeure affect the fulfillment of the obligations entrusted to one of the Parties in accordance with the Agreement and this cannot be remedied or that situation is not corrected within a term of three hundred sixty five (365) days after it occurs, then either Party may request the termination of the Agreement. It will be sufficient for such termination to be effective as a matter of law, that such other Party delivers a notice in such respect to the Party affected by the Force Majeure. Should the termination of the Agreement take place in that case, no Party shall demand the payment of any indemnification for Damages, unless the other Party was in Default." And furthermore on paragraph 78: "Thus, because the Contract was terminated after the 1 year mark following a Force Majeure event, AICSA is not entitled to claim for termination costs, and is not entitled to withhold the corresponding Advance Payments on this count."

164. As this Arbitral tribunal may appreciate, HSR has exercised the right to terminate the contract in a malicious manner, as the cause inferred in the March 16th communication and the two different causes stated in the claim are not consistent.

165. AICSA communicated to NOVACOM HSR's decision to terminate the EPC Agreement on the same day as it was informed; as it knew such termination had direct effects on the WWS Agreement.

166. HSR's termination of the Agreement was maliciously executed due to the following reasons:

(a) It was made only when and after HSR failed to collect the total amount value of the advanced payment bonds received from AICSA and NOVACOM and that were later consolidated in AICSA at HSRs request;

(b) It was made claiming AICSAs responsibility for the termination of contract without defining the event as per Section 30.1 of the EPC Contract;

(c) It was supported on arguments that are not consistent with those cited on its arbitration claim;

(d) It was made while HSR was still in default of its payment obligations;

(e) It was made in full knowledge that doing so placed NOVACOM in a situation of contractual liability towards Listrostrol and Hyundai Ideal.

XXVIII. EXERSICE OF BAD FAITH AND ABUSE OF RIGHTS, BY HSR, UPON TERMINATION OF THE AGREEMENTS

167. As stated above, NOVACOM assumed contractual obligations towards the builders of the turbine and generator system.

168. NOVACOM obligations towards its suppliers are not extinguished by the suspension of the EPC and WWS contracts.

169. HSR maliciously and abusively exercised its right to terminate the EPC contract, affecting the WWS contract WWS, since HSR did not care about AICSA's existing commitments towards NOVACOM, or NOVACOM's existing commitments towards entities Litostroj and Hyundai Ideal for the construction of the turbine and generator system.


Hidroe/ectrica Santa Rita S.A. v. Corporaci6n AIC, S.A. Novacom, S.A. (Co-Respondent) et al. 29 ICC ARBITRATION No. 21398/RD

170. HSR acted in bad faith when it decided to terminate the EPC contract, affecting the WWS contract, since it knew it did not assume any of the responsibilities acquired by NOVACOM towards the suppliers of the turbine and generator system, had paid the sums owed by NOVACOM to the equipment suppliers, or freed NOVACOM of its respective responsibilities.

171. HSR acting irresponsibly and without releasing NOVACOM of its responsibilities towards the suppliers of the WWS equipment, required the reimbursement of the sums of money given as advance payments without recognizing any of the works so far performed under the WWS contract by NOVACOM.

XXIX. HSRs NEW EXPECTATION TO COLLECT PAYMENT APPLICATIONS

172. Once HSR deemed the EPC (and consequently the WWS) contract as terminated, they initiated a new process for the reimbursement of monies delivered to AICSA and NOVACOM. While it did agree that the money given under the LNTP was indisputable, HSR refused to pay for the value of the executed Works, the costs incurred by NOVACOM, and the damages and losses to which NOVACOM is entitled as a result of the abuse on behalf of HSR.

173. HSR doesn't recognize the responsibilities that NOVACOM assumed towards the suppliers as a result of the placement of Purchase Orders for the construction of the system and generator expecting simply to collect as much money as possible without any fulfillment of its contractual obligations as per the EPC and consequently the WWS contract.

174. NOVACOM does not recognize the existence of the alleged indisputable amounts that are to be reimbursed according to HSR. On the contrary NOVACOM demands from HSR payment of the amounts duly owed in accordance to EPC and as a result WWS contract as in correspondence to applicable Guatemalan law.

XXX. INTERPRETATION OF THE EFFECTS OF TERMINATION OF EPC AND WWS

175. As indicated in section 1.8 of both the EPC and the WWS Agreements, Guatemalan law is applicable to the substance of the agreements, and as such this is the applicable law for the interpretation of their contents and effects.

176. In accordance to Article 1593 of the Guatemalan Civil Code:45 "When the terms or concepts of a contract are clear and do not leave doubt regarding the intent of the parties, the literal sense of the clauses must be applied. If the words where different or contrary to the evident intent of the parties, the intent will prevail over the wording." Also, in accordance with Article 1597: "When two or more clauses contradict each other, in such a way that their coexistence is impossible, the clause or clauses that are in conformance with the nature of the contract and the intent of the parties shall prevail. "46

45 Article 1593 of the Guatemalan Civil Code, provides as follows: "Cuando los terminos o conceptos del contrato son claros y no dejan Iugar a duda sabre Ia intenci6n de los contratantes, se estara a/ sentido literal de sus c/ausu/as. Si las palabras fueren diferentes o contraries ala intenci6n evidente de los contratantes, prevalecera esta sobre aquellas."

46 Article 1597 of the Guatemalan Civil Code, provides as follows: "Cuando dos o mas clasu/as se contradigan entre si, de tal manera que sea imposible su coexistencia, prevalecera Ia clausula o las c/ausu/as que sean mas conformes con Ia natura/eza del contrato y con Ia intenci6n de las partes."



177. In regards to the parties' rightful claims as a consequence of the alleged termination of both the EPC and VVWS Agreements, there is an apparent contradiction on section 30.3 (of both the EPC and VVWS Agreements) when termination is given by sole discretion of Owner in comparison to the rightful claims that the contractor has when termination is a result of his default.

178. The apparent inconsistency is originated because the rights that arise by termination, under the sole discretion of the owner, appear to be lower in comparison to the rights that are assigned to the subcontractor when the Agreement ends because of its own default, an aspect that is both incongruent and illogical.

179. Indeed, in accordance with paragraph a) of Section 30.3 of the WWS (provision that is also replicated in the EPC) when the contract ends "for convenience or default of owner" the owner shall pay the contractor: " ... An amount, which will cover contractor's costs he may reasonably incur as a consequence of the termination of Agreement, including cancellation expenses paid to third parties in accordance with the terms of any contract executed by Subcontractor or any court order obtained in connection with the termination of any Sub-Subcontractor (the "Termination Amount') ... "

180. However, when the owner decides to terminate the agreement under "an event of liability attributable to the contractor or subcontractor," depending on whether it is related to the EPC or VVWS, in accordance with paragraph c) of Section 30.3 of the EPC and VVWS contract, the owner or the contractor shall pay: " ... Works performed by contractor (or subcontractor under VVWS) until the date of the corresponding notice of termination based on the value of such works in accordance with the Lump Sum Price and Contractor shall be entitled to offset against such amount due to Subcontractor, including Damages which Contractor may sustain as a result of such termination .... "

181. As a result it appears to be "not consistent with logic" that the EPC contract and the VVWS contract provide for the owner to only pay the "costs" incurred by the contractor as a result of the termination of the contract, when the owner decided the termination for Convenience or Owner Default, on the one hand, and when the contractor is at fault, the contractor is entitled to be paid "the value of the work performed."

182. This "apparent contradiction" is solved under the Guatemalan law, in accordance to the General Rules of Contract Interpretation and integration of the law to the agreements, which in this case are applicable law to the EPC and WWS Agreements.

183. As for the "rights that the contractor is entitled to" when the owner decides to terminate the contract at its sole discretion or when it ends in because of the failure or non compliance of the owner, as provided in Section 30.3 a) of the VVWS Agreement (provision that is also identically replicated in the EPC Agreement) the interpretation of the "cost" must be construed in the sense of the costs to which the contractor would have incurred into " ... as a result of the termination of the contract. ... "; that is, the reference to the costs that are directly related to the lawful termination of the contract; however, this contract clause or provision does not exclude any other rights or compensations provided by the applicable law that the contractor is entitled to as a consequences of the termination of the contract determined by the owner, who, in accordance with the applicable law, specifically, Article 2,011 of the Civil Code of Guatemala that provides that owner can be separated of the contract by paying to the contractor as follows: (a) The value of the work performed or done



by the contractor to the date of termination; (b) The materials used; and (c)Compensation due to him and set by the judge. Indeed, Article 2011 of the Guatemalan Civil Code reads as follows: "Article 2011. The Owner can be separated from the contract by paying to the contractor the work performed, the materials used and the compensation set by the judge."47

The provisions of Article 2011 of the Guatemalan Civil Code are consistent with those established in Section 30.3 c) of the WWS Agreement, (provision that is also identically replicated in the EPC contract) that states that if subcontractor "breaches" its obligations he is entitled to the payment of the value of the work performed.

184. In order of ideas, and as expressly stated in this document, NOVACOM seeks payment of the value of the work performed, the value of costs incurred and compensation to be fixed by the arbitral tribunal, pursuant Article 2,011 of the Civil Code.

185. NOVACOM also seeks payment of damages caused by HSR, including, but not limited, to pay punitive damages to which HSR should be penalized for its malicious and abusive acts in the execution of EPC and WWS contracts.

186. In any case, it is of special relevance to stress that NOVACOM was never at fault in its contractual obligations.

XXXI. REGARDING THE DAMAGES (DANOS v PERJUIC/OS)

A. FOR THE DEFAULT IN PAYMENT:

187. In accordance with the provisions of article 1423 of the Civil Code of Guatemala 48(applicable law to WWS Agreement) the breach of the obligation by the debtor is presumed to be its fault until the debtor proves otherwise. Article 1426 of the Civil Code of Guatemala indicates that: "The debtor is not responsible for the lack of compliance as a result of force majeure unless at the moment of the occurrence of the cause, the debtor was in default". 49

Indeed, the general rule that indicates that the debtor "is not responsible" for the compliance (or lack there of) of its obligations as a result of force majeure is not applicable when the debtor was already in breach of its obligations. 5° Also, article 1428 of the Civil Code provides that the debtor is consider to be in arrears when required payment from the creditor51

; Article 1431 of the Civil Code provides that the payment requirement will not be necessary for the debtor in default, when the law declares it expressly. According to Article 677 of the Guatemalan Commerce Code (C6digo de Comercio de Guatemala), during the execution of a commercial obligation or contract, a party is considered to be in arrears without need of requirement from the affected party, a party is considered to be in arrears the "next day" to

47 Article 2011 of the Guatemalan Civil Code, provides as follows: "EI dueflo puede separarse del contrato pagando a/ contratista e/ trabajo realizado, los materiales empleados y Ia indemnizaci6n que fije el juez."

48 Article 1423 of the Guatemalan Civil Code, provides as follows: "EI incumplimiento de Ia obligaci6n pore/ deudor se presume por culpa suya mientras no pruebe to contrario."

49 Article 1426 of the Guatemalan Civil Code provides as follows: "EI deudor noes responsab/e de Ia falta de cump/imiento de Ia obligaci6n por caso fortuito o fuerza mayor, a no ser que en el momento en que ocurriere, hubiere estado en mora"

50 HSR was already in default for the payment of the sums of moneys indicated in milestones P .1.1 and P .1.2 required by both AICSA and NOVACOM since September 28th and therefore, when the suspension of the contract as a result of force majeure was invoked, i.e. October 1 sr, HSR had already defaulted in the fulfillment of its obligations and thus was not liberated from the responsibilities that resulted from its contractual obligations, particularly the responsibilities related to lack of payment as was previously indicated.

51 Article 1428 of the Guatemalan Civil Code. "EI deudor de una obligaci6n exigible se constituye en mora porIa interpelaci6n del acreedor"



the date when its obligations are due. 52 Article 1433 of the Civil Code provides that once an arrears situation has been legally established, the debtor is obliged to pay the creditor for damages resulting from the delay and debtor is also responsible all risks. 53

188. Article 1434 of the Civil Code of Guatemala54 indicates that damages ("dafios" in Spanish) are those "losses suffered by the creditor in its assets" (equity losses of a party), while the losses ("perjuicios" in Spanish) are the loss of the "lawful income" the creditor forgone (licit profits that a party would have received, which were a direct and immediate consequence of the breach). Both, the direct damages ("dafios" in Spanish) and the equity losses ("perjuicios" in Spanish) must be immediate and direct consequence of the violation, whether they have been already caused or they are going to be necessarily caused.

189. As stated above, HSR had to pay on the 28th and 29th of September 2013 the sums of money required by NOVACOM (and AICSA) related to PAYMENT APPLICATIONS Number 3 and Number 4 respectively, Nevertheless, HRS defaulted in its payment obligations. Therefore, in accordance with applicable law to the contractual relationship between the parties, HSR is therefore considered to be in arrears from the "next day" that its obligations were due, that is, September 29th and September the 30th.

190. An arrears situation, in accordance to Article 1433 of the Guatemalan Civil Code, (applicable law of both contracts) makes the debtor (in this case HRS) responsible for all the damages and losses that its default caused.

191. NOVACOM hereby, claims HSR's responsibility for the payment of damages caused as a result of its failure or default of payment obligations under the EPC contract, for the amount of payment that corresponded to NOVACOM under the WWS contract.

B. FOR THE ACTS COMMITTED IN "BAD FAITH"

192. In accordance with the provisions of article 669 of the Commercial Code, 55 obligations and commercial contracts are interpreted, implemented and enforced in accordance with the principles related to the nature of the business between the parties and the "known truth" ("verdad sabida" in Spanish) and in "good faith" ("buena fe guardada" in Spanish) in order to preserve and protect the righteous and honorable intentions of the contracting parties and without arbitrary interpretations that would limit the natural effects of obligations and commercial contracts.

193. As indicated previously in this document, HSR acted in bad faith and has failed to act according to the principles related to the nature of the business or/and the truth known by the parties ("verdad sabida" in Spanish) when it failed its payment obligations under the EPC

52 Article 677 of the Guatemalan Commercial Code, provides as follows: "En las obligaciones y contratos mercantiles se incuffe en mora, sin necesidad de requerimiento, desde el dfa siguiente a aquel en que venzan o sean exigibles. Se exceptuan de to dispuesto en este articulo los tftulos de credito y las ob/igaciones y contratos en que expresamente se haya pactado to contrario."

53 Article 1433 of the Guatemalan Civil Code, provides as follows "Establecida /ega/mente Ia situaci6n de mora, el deudor esta obligado a pagar a/ acreedor los daflos y perjuicios resu/tantes del retardo, y corren a su cargo todos los riesgos de Ia cosa."

54 Article 1434 of the Guatemalan Civil Code, provides as follows: "Los daflos que consisten en las perdidas que el acreedor sufre en su patrimonio, y los perjuicios, que son las ganancias lfcitas que deja de percibir, deben ser consecuencia inmediata y directa de Ia contravenci6n, ya sea que se hayan causado o que necesariamente deban causarse."

55 Article 669 of the Guatemalan Commercial Code, provides as follows: "Articulo 669.- Las obligaciones y contratos mercantiles se interpretaran, ejecutaran y cumpliran de conformidad con los principios de verdad sabida y buena fe guardada, a manera de conserver y proteger las rectas y honorables intenciones y deseos de los contratantes, sin limiter con interpretaci6n arbitraria sus efectos naturales."



contract; and when maliciously invoked a cause of force majeure that was attributable solely to HSR and did not affect the fulfillment of its obligations and/or the construction of the turbine and generator system.

194. Moreover, HSR acted in bad faith when it did not restore the EPC and WWS contracts while fully knowing that the alleged cause of force majeure invoked no longer existed; additionally, by demanding the return of money from AICSA and NOVACOM while the EPC and WWS contracts remained in force without considering the existence of payment obligations that were assumed by both NOVACOM AICSA for the construction of the WWS equipment.

195. Furthermore, HSR acted in notorious bad faith when it tried to obtain the reimbursement of 100% of the value of the bonds (advanced payments) without paying or giving a penny to AICSA and NOVACOM for works performed, and likewise, HSR acted in bad faith when it exercised its right to terminate the contracts and did not assumed the obligations taken by NOVACOM and AICSA under the WWS contract and, in general, HSR acted in bad faith and has failed to act according to the principles related to the nature of the business or/and the truth known by the parties ("verdad sabida" in Spanish) for other malicious acts cited in this answer.

C. FOR THE ABUSIVE EXERCISE OF ITS RIGHTS:

196. According to article 1653 of the Guatemalan Civil Code, "the excess and bath faith during the exercise of a right, or the abstention from it, that causes damages and losses to people or property, forces the owner of said right to redeem the affected party."

197. Consequently, NOVACOM claims relief and its right to be compensated by HSR for the damages and losses that it caused as a result of the "abusive" use of its rights conferred to HSR under the EPC and WWS contract, in the terms detailed in this document.

XXXII. REPUTATIONAL HARM DAMAGE BY HSR

198. HSR must be ordered to pay the reputational damage that it has caused to NOVACOM, since NOVACOM is a company that develops business on the electrical sector (both, in Guatemala and abroad) and the mere fact of finding itself currently involved in this litigation, without justification, and without being responsible for the origin of this dispute and as a consequence of the direct breaches of HSR, NOVACOM is affected in its reputation with other clients and suppliers or entities involved in the electrical sector.

199. In regard to the determination of the extent and effects of reputational damage that would be caused to NOVACOM, NOVACOM respectfully request that this Arbitral Tribunal determines them relying and taking into consideration the opinion of experts who can advise on how the calculation and determination of economic value that HSR must be condemned to pay should be assessed.



XXXIII. OPPORTUNITY COST

200. As will be shown, NOVACOM is a commercial company that invests its time to the privileged attention of a customer.

201. NOVACOM has invested and dedicated its time to the development and implementation of the WWS contract since the year 2009 to March 2015: and although the contract was suspended from 1 October 2013 to March 16, 2016, the rights and obligations of NOVACOM were focused exclusively in the WWS agreement.

202. NOVACOM in good faith kept all their intellectual and material efforts available to the fulfillment of the WWS contract in the belief that it would be reinstated by HSR in the year 2016, as HSR maliciously led NOVACOM to believe.

203. Also, since HSR in a deceiving manner offered the reinstatement of the Agreements, NOVACOM did not get involved in any other contract; therefore, HSR should be ordered to pay damages for cost opportunity caused to NOVACOM.

204. NOVACOM respectfully request that this Arbitral Tribunal determines the amount of the

XXXIV.

"opportunity cost damage" that HSR must pay relying and taking into consideration the opinion of experts who can advise on how the calculation and determination of economic value for this concept must be assessed.

PUNITIVE DAMAGES

205. Article 1645 of the Civil Code, indicates that he who causes harm or damage to another, either intentionally or by neglect or negligence, is obliged to repair it. 56 Also, Article 1534 of the Guatemalan Civil Code provides that those who execute a Contract are obligated to conclude it and compensate the damages ("danos" in Spanish) and losses ("perjuicios" in Spanish) resulting from either lack of fulfillment or contract breach whether caused by gross negligence or willful misconduct. 57

206. In that order of ideas, NOVACOM also has the right to claim relief and seek payment related to punitive damages from HSR, since HSR intentionality caused damages under the EPC and WWS contracts to AICSA and NOVACOM.

207. Punitive damages constitute an "exemplary punishment" that HSR should be condemned to pay in favor of NOVACOM taking into consideration HSR's repeated malicious and abusive attitude during the term that both Agreements (EPC and WWS) were in force, as well as the term of the suspension and termination of both contracts.

57 Article 1534 of the Guatemalan Civil Code provides as follows: "Los que celebren un contrato, estan obligados a concluirlo y a resarcir los daf!os y perjuicios resultantes de Ia inejecuci6n o contravenci6n por culpa o dolo."



XXXV. STATEMENT OF RELIEF SOUGHT.

208. Based on the facts, presented documents and evidence that remains to be presented during the arbitration process, NOVACOM, hereby, respectfully requests the court the following statements and convictions:

(a) REGARDING THE PASSIVE VINCULATION OF HSR: That it declares and acknowledge that HSR is the main obligated party, towards NOVACOM for the payment of sums of money and other responsibilities that are demanded, since the contract WWS signed between AICSA and NOVACOM was a mere formality imposed by HSR, a formality that does not passively exempt it from its obligations, as such separation was the result of a strategy imposed by HSR, which constituted the original entity with whom the WWS was originated and which consequently controlled and decided that payments for contract implementation WWS. Such aspects, under the applicable Guatemalan law, constitute "a relative simulated contract" which hides the true nature of the relationship, which was established between HSR, as the owner and beneficiary of the WWS and NOVACOM, service provider.

(b) REGARDING NOVACOM'S COMPLIANCE UNDER WWS AGREEMENT: That this Tribunal declare and acknowledge that NOVACOM met each and every one of the obligations set forth under the WWS Agreement until the suspension of the contract required by HSR to AICSA and consequently to NOVACOM by AICSA which extended to all the works under the WWS Agreement including, but not limited to, the construction of the turbine and generator system.

(c) REGARDING NOVACOM'S RIGHT TO RETAIN SUMS OF MONEY: That this Tribunal declare and acknowledge that NOVACOM does not have to reimburse the sums of money given by HSR and AICSA as a result of the Payment Applications (down payments).

(d) REGARDING THE BREACH OF THE WWS AGREEMENT: That this Tribunal declare and acknowledge that HSR defaulted on the payments required by AICSA under the EPC contract in the part corresponding to the WWS and due on 28 and 29 September 2,013 so that NOVACOM could continue to meet its obligations under the contract WWS, therefore establishing itself in arrears, (since September 29th and 30th 2,013)) according to the laws of Guatemala, which are applicable to the contract, and as such must be held accountable for the compensation resulting from said breach.

(e) REGARDING THE INCURRENCE OF BAD FAITH BY HSR: That this Tribunal declare and acknowledge that HSR acted in bad faith during the implementation of the EPC and WWS Agreements, by maliciously invoking, on October 1, 2,013, the Force Majeure in which it based the suspension of the EPC and WWS Agreements, even when said Force Majeure did not affect HSR capacity to fulfill its obligations regarding the WWS Works as contained in both Agreements; furthermore, that it be declared and acknowledged that HSR is responsible for each and every one of the malicious acts attributed to it in the present response, as performed against AICSA and directly affecting NOVACOM under the WWS Agreement. The recognition of the commission of malicious acts implies sentencing HSR to the payment of damages ("danos" in Spanish) and losses ("perjuicios" in Spanish) towards NOVACOM.



{f) REGARDING THE ABUSIVE EXERCISE OF RIGHTS: That this Arbitral Tribunal declares and acknowledges that HSR exercised, in an abusive manner, the rights granted to it under the EPC and WWS Agreements, including those recognized by the laws of the Republic of Guatemala, including but not limited to, abusive exercise of its dominant position under which it controlled economically the execution of EPC and WWS Agreements. That HSR be sentenced, under the laws of the Republic of Guatemala, to pay compensation for the damages it caused to NOVACOM.

{g) REGARDING THE DECLARATIONS AS A RESULT OF THE TERMINATION OF THE EPC AND WWS AGREEMENTS: Based on the law applicable to the contract, that is, the Guatemalan as regulated in Article 2,011 of the Civil Code, the rights that correspond to NOVACOM following the termination of the WWS Agreement and in connection with what was set forth within the WWS Agreement, it is recognized that NOVACOM has the right to be paid: (1) the value of the works performed; (2) The value of the materials and I or costs incurred under the contract; and (3) a compensation to be set by the arbitral tribunal.

(h) REGARDING THE SENTENCING FOR PAYMENT OF PUNITIVE DAMAGES: That this Tribunal orders for "punitive damages" to be paid by HSR for the intent of carrying out malicious and abusive acts as executed during the validity of the EPC and WWS Agreements, including those posterior to its termination. Such exemplary and punitive sentence shall not be less than the amount of financial compensations that correspond to NOVACOM.

(i) REGARDING THE SPECIFIC VALUES THAT MUST BE REQUIRED FROM HSR: HSR must directly pay NOVACOM, through AICSA or through whom this Tribunal deems adequate, the following monies:

(i.1) The sum of USD$ 1,325,646.74 and Euro 853,843.50, corresponding to the "legitimate profits" that NOVACOM failed to receive as a result of the malicious decision of HSR to abusively suspend and terminate the EPC Agreement , in the part that directly affects the WWS Agreement and NOVACOM's rights on the WWS Contract, under a nonexistent cause of force majeure. Such amount is the result of calculating the 15% (the percentage of NOVACOM legitimate of lawful profits) on the total value of the WWS Contract, that in total amounts the sum of US$ 8,712,647.29 Dollars of the United States of America and EUR€ 5,692,290.00.

(i.2) Amounts pertaining to value for works performed: The sum of USD$ 342,296.00 for the value of hours executed by NOVACOM'S personnel in activities related to the WWS Agreement and the development of the Project.

{i.3) Amounts pertaining to costs for work performed: The sum of GTQ1 ,232,466.00 for administrative costs and USD$ 79,426.00 for the placement of bonds.

(i.4) Amounts regarding compensation: An amount to be determined by the Tribunal as follows:

• Reputational Harm Damage in favor of NOVACOM; • Cost Opportunity Damage in favor of NOVACOM; • Punitive damages in favor of NOVACOM; An amount no less, and in any case

superior, to the value of the total liquid compensation amounts that are determined must be paid by HSR;


Hidroelectrica Santa Rita S.A. v. Corporacion AIC, S.A. Novacom, S.A. (Co-Respondent) et at. 37 ICC ARBITRATION No. 21398/RD

• Interest, on the rate that is determined by Guatemalan law, over all the amounts owed by HSR in favor of NOVACOM;

• Legal costs and expenses that NOVACOM must pay as a result of this arbitrage;

• Other sums of money and convictions that the arbitral tribunal deems appropriate in accordance with this arbitration.

(j) REGARDING THE DETERMINATION OF AMOUNTS OF MONEY CAN NOT BE LIQUIDATED: That the Arbitral Tribunal take it upon itself, or through a designated expert, to quantify all the sums of money that can not be settled at this time but for which HSR was convicted.

This Answer and Cross-claim is respectfully submitted by NOVACOM S.A this 81hof February 2016.

CONSUL TORiAS TRiPODE S.A. 8 ave 3-90 zona 14 Edificio La Rambla Torre II Oficina 3-1 Tel: (502) 23864010 Guatemala City, Guatemala 01014 [email protected]
