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UNITED NATIONS Security Council UNITED S NATIONS Security Council Distr. GENERAL S/AC.26/2001/19 28 September 2001 Original: ENGLISH UNITED NATIONS COMPENSATION COMMISSION GOVERNING COUNCIL REPORT AND RECOMMENDATIONS MADE BY THE PANEL OF COMMISSIONERS CONCERNING THE EIGHTH INSTALMENT OF “E2” CLAIMS GE.01-64945 S/AC.26/2001/19 Page 2 CONTENTS Paragraphs Page Introduction ....................................................................................... 1 - 7 7 I. PROCEDURAL HISTORY.................................................................... 8 - 17 9 II. LEGAL FRAMEWORK......................................................................... 18 - 35 11 A. Applicable law................................................................................. 18 - 26 11 B. General duty to mitigate................................................................... 27 12 C. Evidentiary requirements ................................................................. 28 - 31 13 D. Observations of the panel regarding the presentation of claims....... 32 - 35 14 III. REVIEW OF THE CLAIMS PRESENTED........................................... 36 - 170 15 A. Business loss or course of dealing ................................................... 38 - 58 15 1. Claims description ................................................................... 38 - 44 15 2. Legal analysis .......................................................................... 45 - 55 16 (a) Decline in business and definition of presence............... 51 - 52 19 (b) Course of dealing ........................................................... 53 - 55 19 3. Verification and valuation ....................................................... 56 - 58 20 B. Contracts where claimant’s performance was completed................. 59 - 88 21 1. Non-payment for goods delivered or services provided to Iraqi parties.............................................................................. 59 - 81 21 (a) Claims description.......................................................... 59 - 60 21 (b) Legal analysis................................................................. 61 - 72 21 (i) The jurisdiction of the Commission under the “arising prior to” clause......................................... 62 - 67 21 (ii) Application of the directness requirement............. 68 - 72 23 (c) Verification and valuation .............................................. 73 - 81 24 2. Non-payment for goods delivered or services provided to Kuwaiti parties......................................................................... 82 - 88 25 (a) Claims description.......................................................... 82 25 (b) Legal analysis................................................................. 83 26 (c) Verification and valuation .............................................. 85 - 88 26 C. Contracts where claimant’s performance was interrupted................ 89 - 135 27 1. Goods diverted en route to buyer............................................. 89 - 99 27 (a) Claims description.......................................................... 89 - 90 27 (b) Legal analysis................................................................. 91 - 94 27 (c) Verification and valuation .............................................. 95 - 99 28 2. Contracts interrupted before completion of shipment or installation ............................................................................... 100 - 123 29 S/AC.26/2001/19 Page 3 CONTENTS (continued) Paragraph Page (a) Claims description.......................................................... 100 - 104 29 (b) Legal analysis................................................................. 105 - 117 30 (i) The jurisdiction of the Commission under the “arising prior to” clause......................................... 106 - 108 30 (ii) Application of the directness requirement............. 109 - 117 30 (c) Verification and valuation .............................................. 118 - 123 32 3. Interrupted contracts relating to entertainment and tourism services ....................................................................... 124 - 135 34 (a) Claims description.......................................................... 124 - 129 34 (b) Legal analysis................................................................. 130 - 132 35 (c) Verification and valuation .............................................. 133 - 135 35 D. Increased costs ................................................................................. 136 - 163 37 1. Expenses related to employees ................................................ 136 - 156 37 (a) Salaries and termination payments, detention allowances, staff incentives, and reimbursement for personal property losses............................................ 136 - 148 37 (i) Claims description................................................. 136 - 138 37 (ii) Legal analysis........................................................ 139 - 143 37 (iii) Verification and valuation..................................... 144 - 148 38 (b) Evacuation costs............................................................. 149 - 156 39 (i) Claims description................................................. 149 - 150 39 (ii) Legal analysis........................................................ 151 - 153 39 (iii) Verification and valuation..................................... 154 - 156 40 2. Other increased costs ............................................................... 157 - 163 40 (a) Claims description.......................................................... 157 - 158 40 (b) Legal analysis................................................................. 159 - 160 40 (c) Verification and valuation .............................................. 161 - 163 41 E. Tangible property losses .................................................................. 164 - 170 41 1. Claims description ................................................................... 164 41 2. Legal analysis .......................................................................... 165 - 166 41 3. Verification and valuation ....................................................... 167 - 170 41 IV. INCIDENTAL ISSUES .......................................................................... 171 - 185 43 A. Date of loss ...................................................................................... 171 - 175 43 S/AC.26/2001/19 Page 4 CONTENTS (continued) Paragraph Page B. Currency exchange rate.................................................................... 176 - 182 43 C. Interest ....................................................................................... 183 - 184 45 D. Claims preparation costs.................................................................. 185 45 V. RECOMMENDATIONS ........................................................................ 186 46 Notes………………………………………………………………………….. 47 Annexes I. Claimant’s duty to mitigate in respect of losses relating to sale of goods contracts……………………………………………………………………... 52 II. List of reasons stated in annex III for denial in whole or in part of the claimed amount.................................................................................... 55 III. Recommended awards for the eighth instalment of “E2” claims ............................. 58 Notes to table of recommendations ...................................................................................... 119 List of tables 1. Governing Council decisions referred to in the present report.................................. 5 2. List of Panel reports and recommendations referred to in the present report ............ 6 3. Compensable area...................................................................................................... 18 S/AC.26/2001/19 Page 5 Table 1. Governing Council decisions referred to in the present report Decision No. Title Document symbol 1 Criteria for expedited processing of urgent claims S/AC.26/1991/1 7 Criteria for additional categories of claims S/AC.26/1991/7/Rev.1 9 Propositions and conclusions on compensation for S/AC.26/1992/9 business losses: Types of damages and their valuation 10 Provisional rules for claims procedure S/AC.26/1992/10 13 Further measures to avoid multiple recovery of S/AC.26/1992/13 compensation by claimants 15 Compensation for business losses resulting from S/AC.26/1992/15 Iraq’s unlawful invasion and occupation of Kuwait where the trade embargo and related measures were also a cause 16 Awards of interest S/AC.26/1992/16 46 Decision concerning explanatory statements by S/AC.26/Dec.46 (1998) claimants in categories “D”, “E” and “F” S/AC.26/2001/19 Page 6 Table 2. List of Panel reports and recommendations referred to in the present report Short name Title Document symbol E2(1) report Report and recommendations made by the Panel of S/AC.26/1998/7 Commissioners concerning the first instalment of “E2” claims E2(2) report Report and recommendations made by the Panel of S/AC.26/1999/6 Commissioners concerning the second instalment of “E2” claims E2(3) report Report and recommendations made by the Panel of S/AC.26/1999/22 Commissioners concerning the third instalment of “E2” claims E2(4) report Report and recommendations made by the Panel of S/AC.26/2000/2 Commissioners concerning the fourth instalment of “E2” claims E2(6) report Report and recommendations made by the Panel of S/AC.26/2001/01 Commissioners concerning the sixth instalment of “E2” claims E3(1) report Report and recommendations made by the
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