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Enron Mail |
Alan: This makes sense to me. Please get with John or send your e-mail to
him and see if this matter can be resolved quickly. Mark Alan Aronowitz 02/04/2001 10:58 AM To: Mark E Haedicke/HOU/ECT@ECT cc: Ned E Crady/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Andrew Edison/NA/Enron@Enron Subject: Venezuela EPC Dispute Resolution Ned, Andy and I have discussed the dispute resolution provisions of the possible EPC Contract between Enron LNG Atlantic Limited (EGM affiliate) and EE&CC for Project Jose. Attached is Ned's memo outlining our conclusions at this time. In essence, we thought that: Only upon the parties' mutually agreement would the use of a qualified independent expert (arbitrator) subject to AAA rules (note: the current language in the draft would need to be changed to clarify that AAA rules would apply to the IE's proceedings) be the appropriate mechanism for the expeditious handling of a narrow group of technical disputes ("Technical Disputes"). Primarily, these would be disputes over the adjustment of the contract price for a change order or the date of a milestone or completion date due a change order. In the interests of an expeditious resolution, the current draft should be changed to reflect that the IE's decisions would be final, and non-appealable, as contrasted with the current draft where in certain instances they can be appealed to the three-arbitrator panel. The "baseball arbitration" approach required in the current draft should be used by the IE for these Technical Disputes only, and would not apply to disputes handled by the three-arbitrator Panel. The commercial people on the Enron LNG side of the table like baseball arbitration b/c they believe it mitigates the possibility of claims inflation by the Contractor in these change order price disputes. All other disputes under the Contract would be handled by a three-arbitrator panel ("Panel") subject to AAA rules, which would also handle all Technical Disputes if the parties cannot mutually agree to an IE. The Dispute Resolution Section of the draft Contract should be refined in some areas to provide greater clarity. Andy and Ned are in the process of doing this. If you have any questions before you visit with Vicki or John, please advise any of us. Alan ----- Forwarded by Alan Aronowitz/HOU/ECT on 02/04/2001 10:25 AM ----- Ned E Crady@ENRON_DEVELOPMENT 02/01/2001 06:48 PM To: Andrew Edison@Enron, Alan Aronowitz@ECT cc: Subject: Venezuela EPC Dispute Resolution Please see attached memo regarding this afternoon's discussion of proposed resolution to the concerns posed on the arbitration clause. Thanks, Ned
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