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