in'cgularitics in the management and operations of ... ENTEL S.A., which affect itsfinancial investm(.:nts and undcnnine the national tax system" (Claimant'stranslation). Supreme Decree No. 29087 states that this review was carried out bySITIEL and the Respondent's Ministry of Public Works, Services and Housing. TheClaimant, however, was never notified about that ::Iupposedreview, Or about theprocedures followed in the course of this supposed review. It is implausible that theRespondent could have conducted such a review without the Claimant's or ENTEL'spa.rticipation or knowledge.

43. On April 4, 2007, the Commission wrote to the Claimant inviting it to meet in La pazon April 11, 2007 for "negotiations." The Commission's invitationcontained noagenda, no background documentation and no specific proposa.ls from theRespondent. Nonetheless, the Claimant was willing to listen in good faith to what theRespondent, through the Commission, had to say about its plan to recover ENTEL forthe Bolivian State through negotiations with the Claimant. The Clairoant thereforesent a delegation to La paz to meet with the Respondent's Commission. TheClaimant held meetings with the Respondent's Commission from Aprilll to April13,2007.

44. On AprillI, 2007. the Respondent's Commission began the discussions with cordialintroductory remarks. The main subject of discussion was the Respondent's requestthat the pa.nies maintain confidentiality in regard to their discussions, to which theClaimant agreed. Then, on April 12, the Respondent proceeded to launch a vehementattack aga.inst the Claimant and its delegation at the meeting. This includedincendiary and abusive statements to the press by Minister Quintana against theClaimant while the meeting was still underway, despite Respondent's previousinsistence on confidentiality. The Respondent continued its hostile media campaignagainst the Claimant for several days thereafter.

45. On April 13,2007, the Respondent presented the Claimant with a set of power pointslides titled "Recuperation of ENTEL in Favour of the Bolivian State: Findings"(Recuperaci6n de ENTBL a. favor del Estado Boliviano: Hallazgos). Instead ofsetting out any proposals for the Claimant to consider, this document set out a seriesof alleged, but completely unfounded. "ilTegularities" of which the Respondentaccused the Claimant.

46. At no point in its initial meetings with Respondent's representatives did theRespondent propose to discuss a plan with the Claimant for the negotiated acquisitionof the Claimant's controlling interest in ENTEL. At no point did the Respondentacknowledge the Claimant's successful management of ENTEL Instead, it appearsthat the Respondent had invited the Claimant to La Paz for the sole purpose levelingbaseless accusations at it, including making such accu.sationsthrough the media.

47. A further meeting was scheduled to be held in La Paz 00.Apri123, 2007. Despite theRespondent's continuing failure to provide either an agenda or any proposals for howit might go about acquiring the Claimant's interest in ENTEL, or the amount to bepaid in cOO1pensation,the Claimant prepared in good faith to attend this meeting.However, a few hours before the meeting was due to begin, the Respondent issuedtwo further presidential decrees directly affecting the Claimant's investments inENTEL. These decrees were the following:

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a. Suprcme Decree No. 291(I1, which purports to abrogate Supreme Decree24025 dated June 7, 1995 (on the constitution of ENTEL's partially State-owned predecessor, ENTEL S.A.M.)~ Supreme Decree No. 24133 datedSeptember 29, 1995 (on the subscription of capital in ENTEL S.A. through theShare Subscription Agreement); and Supreme Decree No. 24700 dated July 7,\997 (on the trusts managed by [he ponsion fund administrators). TheSupremc Decrees that Supreme Decree No. 29101 purports to abrogate wereenacted in cOJUlectionwith the original capitalization of ENTEL and theClaimant's purchase of sha.rcsin ENTEL. Their purported abrogation directlyundennines the 'security of the Claimant's investtnent in Bolivia. SupremeDecree No. 29101. furthennore purports to transfer to the Bolivian State theshares in ENTEL managed by two }?ensionfund administrators; and

b. Supreme Decree No. 29100, which purports to abrogate Supreme Decree No.28172 dated May 19, 2005, Ministerial Resolution No. 194 of August 12,2005 and all other resolutions based on that abrogated Decree. SupremeDecree No. 28172 and Ministerial Resolution No. 194 were the basis uponwhich the Respondent had certified that the Claimant and ENTEL had fulfilledtheir commitments under the Share Subscription Agreement, including allrequire4 investments in and through ENTEL, and upon which the Respondenttenninated the Share Subscription Agreement, on the grounds that it had beenfully perfoImed. In reliance on the Decree and Resolution, ENTEL lawfullydecreased its share capital with an associated distribution of capital on a prorata basis to its shareholders, including the pension funds and other minOlityshareholders. Supreme Decree No. 29100 furthermore purports to declareSupreme Decree No. 28 I.72 unconstitutional and illegal and declares that actsderived from it '"are punishable in accordance with the national legal order,due to which they should be prosecuted by the appropriate means" (Claimant'stranslation).

48. Claimant notes that, ncfore the Drornul~~tioIt PI Supreme Decree No. 29100, adetermination by the Cou~...!'of Bolivia t.haL ~ DecreeN...9. 28172 and~inisteriarDecree No. 194W~:reinvalid and une~able \~§ so~ht.- In January2006, the Tribunal Co~titucionj}l. theJligheSLCom.wnUGli¥-ia;confirm.edthe validityo:(~~h acts.

49. The Respondent's Supreme Decrees Nos. 29100 and 29101) together with the other.actions described above, effectively destroyed the value of tIte Qaimant's investmentin ENTEL. They inappropria.tely and inconcct1y call into question the legality andpropriety of the Claimant's conduct and that of its officers and other representatives.The timing of the promulgation of the Supreme Decrees suggests that the Respondentintended deliberately to surprise the Claima.ntwith them during the meeting scheduled10be held on the same day with the Commission.

50. Notwithstanding Claimant's expressed wiUingness to meet with representatives of theRespondent to attempt an amicable discussion and resolution of the issues,Re..m.ondentnever responded sUPsui1}tive!yt() Cl~imant's proposals as to the place oragenda of any such meeting, ~ I1cvei.advanced any sucn proposals of its own.Accordingly, it proved impossi1:llcto hold any funher meetings.

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51. On April 27, 2007, the Bolivianon-linenewspaperEl Deberpublishedan intervi~wwith the Respondent's Minister of Pu.blic Works, Services and Housing, Sr. JergesMercado. It was Minister M~rcado's Ministry which had, together with theRespondent's telecommunications regulator, undertaken the supposed "rcview" ofENTEL's operations and investments. Minister Mer~ado stated that it was hismandate to recover the 50% of ENTEL's shares which are owned by the Claimant,but that Respondent did not contemplate paying for such shares. He added that theRespondent had made a proposal to the Claimant regarding its shares in ENTEL.However, no such proposal had been made.

52. Minister Mercado':; statements revealed g:y-eJID.thiDgs about the Respondent'sactions. FiDSt,the 'Respo.nd~l1thad ~egun a process of nationalizing an of theClai~allt'sshares in ENIEL ~!!(l1!otoPlv'Jb.<?~~~_!!i~dedto gain controlof-ENTEL.S~oJt'd,~tead of se~ldng to n~goti~te ~ith the cTa1ITiarifiii-g90(U~itli-to~.ireits shaTp.sin ENTEL as a vibrant and successful comp~ny, the Respondent opted to!Jlake unfo_l.lnde4allegMions againsttl}e Claimant's managemenf ofgNTEL, ~nd}op-ressure Cl~imant through. inter ediCt..un:f.o'!Ild~dtax claim,s and fi.!l~s,i1:umkr to..£Qel'Cp.tbe Claimant to -relinquishits investmellDrithout comJ.l~.Jlsati.a.n.

The Dispute Arises Directly out of an Investment'

53. On April 30, 2007, the Claimant wrote to the Respondent to raise the di$pu.teunderth; tenus of the BIT. In its letter, the Claimant placed the Respondent on notice thatthe Respondent's actions in connection with the Claimant's investment in Bolivia hadbreached various provisions of the BIT, including:

a. Article 3(1), requiling the Respondent to ensure fair and equitable treatIn~nt tothe Claimant's investment and not to impair, by unreasonable ordiscriminatory measures, the operation, management, maintenance, use,enjoyment o-cdisposal of the Claimant's investment;

b. Article 3(2), requir:io.gthe Respondent to accord to the Claimant's investmentfull sec1!Jj!Y!!!}~Lp~ot~~tionin any case not less than that accorded toinvesbi1ents of the Respondent's own nationals or to investments of nationalsof any third State, whichever is the most favourable to the Claimant;

c. Article 3(4), requiring the Resl?_ond~nt t..o_obs~J,}'eany obl~gation it may haveentered into with regard to the Claimant's investment; and

d. Anicle 6, J:cquiringthe Respondent not to take any measure depriving, direc;tlyor indirectly, the Claimant of its il1~;ei>tmenfunless,inter al1a)the m-easuresaretakeil unacr due process oriaw, are not discriminatory or contrary to anyundertaking which the Respondent may have given and are accompanied byprovision for the payment of just compensation representing the genuine valueofrhe Claimant's investment to be paid without undue delay.

54. The Claimant's investment fans within the terms of the BIT. Under the BIT, theRespondent has assumed a number of binding international legal obligatioQ.swithrespecr to the Claimant's investment. The Respondent's breaches of its obligationsunder tho BIT, and the Respondent's consequcnt duty to provide n::par.\tionto theClaimant tor those br~aches, have given rise to the dispute. It follows, therefore, that

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the dispute arises directly out of an investment as required by Article 25(1) of theConvention.

55. In its letter dated April 30, 2007, the Claimant invited the Respondent to senIe thedispute amical':llythrough consultation, as envisaged by Article 9(1) of the BIT.Acting in good faith, the Claimant proposed to the Respondent to resolve the majorpa.rt of the Respondent's allegations by means of reports to be. preparl;)d byindependent advisors of international standing, to be jointly appointed by the Pani<:s.The Respondent, however, declined to accept the Claimanr's proposals, and declinedto respond to the Claimant's foHow-up communications for advancing consultations.It has not be~11possible to settle the dispute amicably with the Respondent through

.con5ulta;tion.

56. Once applicable, Article 9(6) of the BIT imposes IN additional conditions or waitingperiods for s'ubmitting a dispute to arbitration under the Convention. Article 9provides for tWo distinct procedures for settling investment disputes under the BIT-The two procedures are available to eligible investors successively and notconcurrentJy.

57. The firMprocedure, set forth in Article 9(2) to'9(5) of the BIT, consisted in submittinginvestment disputes, after a six-month period in which settlement should beattempted, to an ad hoc arbitration tribunal. Jhis 'first procedure applied up until thetime at which the Respondent became an ICSID Contracting State on 23 July 1995.

58. The second p~~dure, set forth in Article 9(6) of the BIT, has applied from 23 July1995 onwards and consists in submitting "any disputes" between the Parties "that mayarise from investment" to ICSID "for conciliation or arbitration". 'nIe phrase"conciliation or ar~itration" on its face;'!allows either fann of settlement to be cl1()~en

'by tb.eClaimant.

59. Because an amicable settlement through consultation has already proven to beunavailable, the Claimant is compelled to seek redress through arbitration inaccordance with the Parties' consent. The Claimant seeks the full value of th!'}Josscaused to it by the Respondent's actions. .

60. The Claimnnt's investment in ENTEL is nQw_s<ff~s:jivelyworthless. D-Xvinu~Qf theRespongent's stateme~t~ that it would nationalize tb£Clairn.ant's shawJILENIEL,tbU~Q~!llgation of S~~!iie_~Decree No. 29087, and the other steps ta!<en 1~y the~dMt to interfere_~jjI1Jl1~ Claimant' 5 op.e.mtion,_J,ng,~I11ent, maintenance,,1lse,-enj-\.1-ymentand--.d.~lQfits.inYe.stm~ describe9~,

61. The Claimant r~serves its right to state its claim in full at the appropriate juncture ofthe proceeding, including a full quantification of its damages and including by meansof the pleading!:>,a.rgument and presentation of evidence contemplated by Rules 31and 32 of the Arbitration Rules adopted in accordance with the Convention.

v. THE DISPliTE IS WITHIN THE JURISDICTION OF THE CENTRE

62. Article 36(3) of the Convention provides that the Secretary-General shall register arequest for arbitration unless she finds that, on the basis of the information conta.inedin the request, the;;dispute is "manifestly outside" the jurisdiction of the Centn.:.

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63. The exlenl of the jurisdiction of the Centre is governed by Articlc 25( 1) of theConvention, which provides as fonows:

"The jmisdiction of the CenlTe sha1l extend to any legal dispute arisingdirectly out of an investment, between a Contracting State (or any constituentsubdivision or agency of a Contracting State designated to the Centre by thatState) and a national of another Contracting State, which the parties to thedispute consent in writing to submit to the Centre. When the paliies havegiven their consent, no party may withdraw its consent unilateralJy."

64. As discussed above at paragraphs 23 to 25, there is a legal dispute between theParties.

65. As discussed above at paragraphs 26 to 34, the Parties' dispute arises directly out ofan investment.

66. As discussed above at paragraphs 6 to 15, the Parties are, on the one hand aContracting State (the Respondent) and on the other hand a national of anotherContracting State (the Claimant).

67. As discussed above at paragraphs 17 to 22, the Parties have consented in writing tosubmit the dispute to the Centre to be settled by arbitration in accordance with theConvention.

68. It follows that in this case the dispute meets all the requirements of Article 25(1) ofthe Convention to fall within the jurisdiction of the Centre. The dispute is thereforenot "manifestly outside" the jurisdiction of the Centre.

VI. CONSTITUTION OF THE TRIBUNAL

69. TIle Parties have not agreed to provisions regarding the number of arbitrators or themethod oftheir appointment.

70. In accordance with Arbitration Rule 2(1)(a), the Claimant hereby proposes to theRespondent that the Arbitral Tribunal be composed of three arbitrators, one arbitratorto be appointed by each of the Parties and the third arbitrator, who sha]] be thePresident of the Tribunal, to be appointed by agreement of the party-nominatedarbitrators. In the case of Claimant, the nominated arbitrator shaH not be a national orresident of the Netherlands, and in the case of Respondent, the nominated arbitratorshall not be a national or resident of Bolivia. Each party shaH nominate its arbitratorwithin 30 days of the registration of this request If the parties' two party-nominatedarbitrators are not able to agree on the President of the Tribunal within 60 days afterregislTation of this request, then the President of the Triblmal, who shall not be anational or resident of either the Netherlands or Bolivia, shall be appointed by theChaim1an of the Administrative Counsel of ICSID. Except as expressly set forthherein, the provisions of Arbitration Rule 4 shall apply.

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71.111 accordance with Arbitration RuJe 2(!)(b), the Respondent should respond to thisproposal within 20 days of its receipt of the Notice of Registration.

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V~.VII"III , I "Ill 0.'"'''''°''' '" ..."., , In'."."."", ,.

VII. OTHER PARTICULARS

A. Appointment vfcounsel

72.111e Claimant hereby, and pursuant to a Power of Attomey and Appointment ofCounsel, appoints as counsel with full powers of representatjon in connection with theRequest and the ensuing arbitration proceeding Robert L. Sills and Steven J. Fink ofOrrick, Herrington & Surcliffe LLP.

. B. Language

73.Pursuant to ArbitrationRule22, ClaiuJantselectsEnglishas the languageto be usedin:theproceeding.and requestsRespondentto agreethat Englishwillbe so used.

c. Required copies Clndpayment

74- In accordance with InstitUtionRule 4, this Request is submitted in an original and fivecopies- '

75- This R~quest is accompanied by the prescribed lodging fee ofUSD25,OOO.

76. This Request is accompanied by the following Annexes:

a. The BIT.

b. ResolutionofE.TJ.'s Boardof Directors.

c. Letter from Claimant to Respondent. dated April 30, 2007.

VIII. SUBMISSION

77. On the basis of the above information, the Claimant requests that the Secretary-General of the Centre:

a. Acknowledge receipt of this Request;

b- Transmit a copy of the Request and its accompanying documentation to theRespondent; and

C. Proceed to register the Request as soon as possible in the Arbitration register,and on the same date notifY the Parties of the registration, in accordance withInstitution Rule 6(1).

Dated: October 12, 2007

Sigl1e~~TL.~:OO .RobeltL Sills ~Byandon behalfofE.T.L EuroTdecorn InternationalN.V.

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