Message-ID: <30633017.1075853216973.JavaMail.evans@thyme>
Date: Thu, 26 Apr 2001 06:11:00 -0700 (PDT)
From: gail.brownfeld@enron.com
To: james.derrick@enron.com, rob.walls@enron.com
Subject: Piedra Buena Dispute/Litigation
Cc: john.novak@enron.com, mark.haedicke@enron.com, richard.sanders@enron.com, 
	robert.williams@enron.com
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 As you might recall from the monthly litigation reports, Enron America del 
Sur has been involved in an ongoing dispute with Central Piedra Buena ("CPB") 
relating to approximately $3.3 million that Enron claims it is owed pursuant 
to a 1999 natural gas sales agreement. 
  More specifically, pursuant to the sales agreement, Enron was to sell 
natural gas to CPB.  Enron bought this gas from a gas distribution company 
called Total.  The sales agreement and the purchase agreement contained 
similar provisions and Enron acted primarily as a middleman in the 
transactions. 
 Beginning in December 1999, after a change in CPB's management, CPB stopped 
paying Enron for the gas that was supplied.  As a basis for non-payment, CPB 
claimed that Enron had made numerous mistakes in calculating what was due 
from CPB.  CPB also made vague allegations of wrongdoing on Enron's part. The 
parties (including Total) have been negotiating for months in an effort to 
resolve their disputes; however, these negotiations have been unsuccessful.
 We would like approval to initiate an arbitration against CPB for the money 
they owe us which, in turn, we owe to Total. Although we believe that CPB may 
have set-off rights for a very small amount of the sums claimed, their 
failure to make any reasonable offer to resolve this matter has necessitated 
that we resort to arbitration.
   Guido Tawil of the Bomchil firm has been helping us in our efforts to 
negotiate a settlement and would represent Enron in the arbitration.  
Pursuant to the parties' agreement, this would be an ICC arbitration, would 
occur in Buenos Aires and Argentine law would apply. Additionally, several 
arbitrators have been interviewed and, in Guido's opinion, our best choice is 
Sergio La Pera, a commercial law specialist who has a good bit of experience 
as an arbitrator.  According to Guido, Mr. La Pera is available and wiling to 
serve on the arbitration panel.
 Should you need any additional information or have any questions, please let 
me know.  Thanks.
 