INTERNATIONAL CENTRE FOR DISPUTE RESOLUTION
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KANSAS CITY SOUTHERN, ET AL.,
CLAIMANTS,
- AGAINST - ICDR NO.: 50 T 181 00514 03
GRUPO TMM, S.A., ET AL.,
RESPONDENTS.
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STIPULATION
This stipulation is entered into between Claimants Kansas City Southern and Kara
Sub Inc. (collectively "KCS") and Respondents Grupo TMM, S.A., TMM Holdings,
S.A. de C.V., and TMM Multimodal, S.A. de C.V. (collectively "TMM").
The Arbitration Panel determined the discrete threshold issue TMM submitted in
its initial answering statement: "Did TMM have the ability to terminate the
Acquisition Agreement *** based upon the rejection of that Agreement by TMM's
shareholders?" On March 19, 2004, the Panel issued an Interim Award in which it
answered this question in the negative, concluding that "the rejection of the
Acquisition Agreement by TMM's shareholders in its vote on August 18, 2003 did
not authorize TMM's purported termination of that Agreement, dated August 22,
2003. Accordingly, the Acquisition Agreement remains in force and binding on the
parties until otherwise terminated according to its terms or by law." The panel
found it unnecessary to determine whether approval by TMM's shareholders is a
"condition" of the Agreement.
The parties therefore have agreed not to move immediately into the next phase of
the arbitration.
The parties hereby stipulate:
1. Except as provided below in paragraph 5, the parties agree not to
request a scheduling order for a further hearing in the arbitration at this
time.
2. Each party reserves the right to request a scheduling order for a
further hearing at any time.
3. Neither party waives any claims that it currently has based upon the
past conduct of the other parties, nor any additional claims that may arise out
of the future conduct of the other parties.
4. Neither party waives any right or remedy.
a. In recognition of the parties' original agreement to allow
eighteen months to satisfy the conditions to closing specified in
the Acquisition Agreement and KCS's allegation that more than
seven months have been lost from the date of TMM's purported
termination of the Acquisition Agreement on August 22, 2003
through the date of the panel's ruling on March 19, 2004,
specifically, and not by way of limitation, KCS reserves its
right to seek an extension of the Termination Date because of
time lost as a result of TMM's alleged repudiation of the
Acquisition Agreement and TMM's alleged other failures to use
commercially reasonable efforts to consummate the transaction.
b. TMM reserves its right to oppose the application referred to in
paragraph 4a above and, without limiting the general reservation
in paragraph 4 above, reserves its right to maintain that TMM
shareholder approval is a condition of the Acquisition Agreement
and that the Agreement cannot close without such approval as well
as to pursue its claims for damages based on alleged breach of
the agreement by KCS.
5. KCS will file an application to recover its costs, expenses, and
attorneys' fees as the prevailing party on the Interim Award in accordance with
the Commercial Arbitration Rules of the American Arbitration Association and the
Acquisition Agreement. TMM opposes KCS's application as meritless and also
contends the request is premature.
6. The parties agree to discharge in good faith all of the obligations of
the Acquisition Agreement.
/s/ Lauren Harrison
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Counsel for KCS
/s/ Joseph D. Pizzurro
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Counsel for TMM
SO ORDERED: Uniondale, N.Y.
APRIL 4, 2004
/s/ George C. Pratt
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George C. Pratt, Chair
For the Panel