RJR Nabisco Inc. (Formerly R.J. Reynolds Industries, Inc.) and Consolidated Subsidiaries - Page 48

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                    The [tribunal determined that the] value of                       
               Aminoil's nationalized operations on September 19, 1977                
               was $83,000,000, net of liabilities owing from Aminoil                 
               to Kuwait (i.e., $206,041,000 less $123,041,000).  The                 
               five year delay in payment (from September 19, 1977                    
               through July 1, 1982) caused Kuwait to accrue                          
               substantial additional debt owing to Aminoil.  Had                     
               there been no delay in payment, Kuwait would have                      
               simply paid Aminoil $83,000,000.  The "inflation"                      
               factor, like the "interest" factor, was compensation                   
               for the delay in payment, and therefore, it is properly                
               treated as ordinary income under section 61.                           
               C.  Discussion                                                         
                    1.  Introduction                                                  
               The parties agree that the disputed item was received                  
          pursuant to the award and that the intention of the tribunal                
          governs as to whether the disputed item is disguised compensation           
          for the concession or a payment in the nature of interest.                  
          Respondent argues that the award is clear on its face and that              
          the disputed item is in the nature of interest.  Respondent                 
          argues further that we are constrained, in any event, by the                
          Convention on the Recognition and Enforcement of Foreign Arbitral           
          Awards of June 10, 1958 (the Convention), 21 U.S.T. 2517,                   
          (entered into force Dec. 29, 1970), from “reevaluat[ing] the                
          matters decided by the Tribunal”.  We shall first determine                 
          whether the Convention constrains us from interpreting the award.           
          Since we believe that it does not, we shall then consider whether           
          the award is ambiguous.  Since we believe that it is, we shall              
          interpret it, using the tools at our disposal.  As will be seen,            
          we agree with petitioner’s interpretation of the award.                     




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