I. INTRODUCTION

1. Guaracachi America, Inc. (Guaracachi America, or GAI) and Rurelec PLC (Rurelec) (collectively, the Claimants) file this Reply Memorial in support of their claims against the Plurinational State of Bolivia (Bolivia). This Reply is submitted pursuant to the Tribunal’s Procedural Order No. 1 dated 9 December 2011, and subsequent agreements between the parties. It responds to Bolivia’s Statement of Defense dated 15 October 2012 (the Statement of Defense). This Reply Memorial is accompanied by documentary exhibits No. C-237 to C-361 and legal authorities No. CLA-151 to CLA-181, five statements by witnesses of fact, and a supplemental expert report by Compass Lexecon (the Compass Lexecon Rebuttal Report).

2. This case arises from Bolivia’s confiscation of the Claimants’ investments in Guaracachi, the largest power generator in Bolivia, after the Claimants had spent years – and tens of millions of dollars – building and improving the business. Bolivia carried out this confiscation in stages, beginning with the abrogation of the regulatory framework that Bolivia created in the 1990s to attract foreign investment, and culminating with the outright seizure of Guaracachi on 1 May 2010.

3. In the Statement of Claim, the Claimants chronicled in considerable detail what happened to their 50.001% shareholding in Guaracachi. The Claimants began with the background to the Capitalization of Bolivia’s electricity generation sector; explained the commitments that Bolivia provided to them and other investors in the applicable regulatory framework; described Guaracachi’s extraordinary record of investments in new electricity generation; and demonstrated the interference by the Government in the key elements of the regulatory framework affecting Guaracachi, the failure to obtain justice through the Bolivian court system in respect of such interference and, finally, the forced nationalization.