Summary

Source: icsid.worldbank.org

CLAIMANTS' NOTICE OF ARBITRATION

TABLE OF CONTENTS

I. Parties
II. Preliminary Statement
III. Factual Background
A. Claimants Sell DESAA's Shares on the Lima Stock Exchange and Pay Capital Gains Taxes in A Good Faith Effort to Navigate Tax Law Uncertainties
B. Claimants' Good Faith Engagement with Peru's Administrative Process is Met with Unprecedented Abusive Action and Egregious Delay
C. SUNAT Manipulates the Proceedings with an Intent to Deprive Claimants of Their Investment
D. SUNAT Misapplies Laws and Manipulates Proceedings to Reach a Determination in its Own Favor
IV. SUNAT's Actions Do Not Constitute "Taxation Measures"
V. Peru's Conduct Breaches its Obligations under the TPA
A. SUNAT's Arbitrary and Non-Transparent Manipulation of Administrative Proceedings Constitutes Violation of the Fair and Equitable Treatment Protection
B. Peru's Failure to Legitimately Engage with and Resolve EDCH's Tax Refund Request After More Than Six Years Constitutes a Denial of Justice
C. SUNAT's Deprivation of Claimants' Remaining Investment Constitutes Expropriation
1. Peru's Actions Affect the Totality of Claimants' Remaining Investment
2. Peru's Expropriation is Unlawful
D. The Improper Withholding of Claimants' Overpayment Violates Peru's Obligation to Permit Free Transfer of Proceeds
E. SUNAT's Actions Constitute Breach of Additional Protections in the TPA
VI. Claimants Meet the Jurisdictional Requirements for Submitting their Claims to International Arbitration under the TPA and the ICSID Convention
A. There is a Legal Dispute between Claimants and Peru
B. Peru is a Contracting Party to the TPA and a Contracting State of the ICSID Convention
C. Claimants are Covered "Investors" of a Contracting Party to the TPA and a Contracting State of the ICSID Convention
D. Claimants Made Covered "Investments" in Peru under the TPA and the ICSID Convention
E. Consent to ICSID Arbitration and Agreement to Arbitrate
VII. Number of Arbitrators; Claimants' Party-Appointed Arbitrator; Proposed Language and Place of Arbitration
VIII. Request for Relief

Pursuant to Article 10.16 of the United States-Peru Trade Promotion Agreement that was signed on April 12, 2006 and entered into force on February 1, 2009 (the "Treaty" or "TPA")1 and Article 36 of the Convention on Settlement of Investment Disputes between States and Nationals of Other States (the "ICSID Convention"), Blue Water Worldwide LLC, Blue Water Dunas LLC, and the owners of YCP Peru Fund I, L.P., comprising individuals Charles P Coleman III, John Barry Purcell, Wesley Franklin Haynes, and Jon Ylvisaker and entities Cedar Hill Holdings, LLC, Kenneth Rainin Foundation, Maltese Capital, LLC, Next Egg Investments (Cheswold), LP, Next Egg Investments (JN), LP, and SV Booth Investment III, LLC (collectively, "Claimants") hereby initiate an arbitration proceeding against the Republic of Peru ("Peru" or "Respondent") for claims arising out of Claimants' sale of investments in Dunas Energía S.A.A. and Electro Dunas S.A.A., the latter of which holds a concession for the distribution and commercialization of electricity in the southern-mid regions of Peru. This Notice of Arbitration is filed by Claimants after obtaining all requisite authorizations to do so and constitutes Claimants' consent to arbitrate in accordance with the procedures set out in the TPA.

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Blue Water and the YCP Owners together own Electro Dunas Cayman Holding Ltd. ("EDCH"), an entity organized under the laws of the Cayman Islands. Blue Water owns 80% of EDCH, and the YCP Owners own the remaining 20% of EDCH. Claimants made an investment in Peru when, between December 2012 and April 2013, EDCH acquired Dunas Energía S.A.A. ("DESAA"),5 a company listed on the Lima Stock Exchange ("LSE"). At the time that EDCH gained ownership and control over DESAA, DESAA owned 99.41% of Electro Dunas S.A.A. ("EDSAA").2 EDSAA held, and continues to hold, a concession for the distribution and commercialization of electricity in the southern-mid regions of Peru. Both DESAA and EDSAA qualify as "investments" under the TPA, constituting Claimants' "shares, stock, and other forms of equity participation in an enterprise."6 Proceeds from the sale of DESAA and EDSAA, which is described in the following section, comprise part of Claimants' investment.

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VIII. Request for Relief

94. In view of the foregoing, Claimants respectfully request that the Arbitral Tribunal grant the following relief:

a. DECLARE that this dispute and the claims asserted by Claimants fall within the jurisdiction of the Tribunal;

b. DECLARE that the facts giving rise to the claims asserted by Claimants do not constitute "taxation measures" or, alternatively, do not constitute bona fide tax measures, and are therefore not subject the TPA's carve-out for such measures;

c. DECLARE that Peru has violated the TPA and international law in connection with its treatment of Claimants and Claimants' investment;

d. ORDER Peru to pay Claimants full compensation for all losses and damages suffered by the Claimants, in amounts to be determined, but no less than S/ 200,000,000, plus pre- and post-award interest with appropriate rests calculated at a commercial rate to be determined from an appropriate start date until to the date of payment;

e. ORDER Peru to pay to Claimants all other damages caused to Claimants as a result of Peru's breaches of the TPA;

f. ORDER Peru to pay to Claimants all costs associated with this proceeding, including without limitation attorneys' fees and the expenses and fees of the arbitrators and of any administering arbitral institution; and

g. GRANT any other relief the Tribunal deems just and proper.

95. Claimants reserve the right to amend or supplement the present Notice of Arbitration, to make additional claims, and to request such additional or different relief as may be appropriate.

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