In an award dated 30 November 2017 (the “Award“), an ICSID Tribunal ordered Peru to pay around US$30.4million to Canadian company Bear Creek Mining (the “Claimant“) following its finding that a 2011 decree (“Decree 032“) constituted an unlawful indirect expropriation of the Claimant’s right to operate the Santa Ana mine (the “Project“).
This post discusses the disagreement between Karl-Heinz Bockstiegel (the president of the tribunal) and Michael Pryles (appointed by the Claimant) (together, the “Majority“), and Prof. Philippe Sands QC (appointed by Peru), on the assessment of damages. Prof. Sands considered that the damages should be reduced due to contributory fault on the part of the Claimant.
The impact the Claimant’s conduct had on the Tribunal’s calculation of damages was, in any case, significant. Given the extent of, and reasons for, the opposition to the Project by the time of Decree 032, the Tribunal thought a hypothetical purchaser would not have obtained the necessary ‘social license’ to proceed with the Project. Ultimately it awarded the Claimant only a fraction of the US$522 million claimed. The reduced damages award emphasises the importance of respect for human rights and engagement with indigenous communities by investors.
The respective views expressed by the arbitrators concerning the Claimant’s conduct are also interesting in light of the broader debate about the relevance of the human rights of non-parties in investor-state arbitration.
An overview of the overall Award can be found in the post published on 16 December 2017 on the Kluwer Arbitration Blog. Continue reading
On 10 February 2014, the Presidents of Chile, Colombia, Mexico and Peru met in Colombia at the VIII Summit of the Pacific Alliance to sign the Additional Protocol of the Framework Agreement for the Pacific Alliance. The Additional Protocol eliminates 92 percent of tariffs between the members and will enter into effect after each of the members incorporates it into their domestic framework through the appropriate legislative channels. The remaining 8 percent of tariffs that have not been liberalized mainly relate to agricultural products and will be eliminated gradually over the next few years.
This is a very significant development not just for the countries involved but for the region as a whole and the rest of the world. These four countries represent nearly 40% of the Latin American GDP and have a total population of over 210 million people. Combined, the four countries represent the eighth largest economy in the word and the seventh largest exporter.
With the potential conclusion of the Trans-Pacific Partnership in the coming year, this significant step towards strengthening the trade bloc will further cement the channels of trade with Asia that these influential Latin American economies are seeking to deepen.
On 27 January 2014, the International Court of Justice (the ICJ or the Court) delivered its judgment in the Maritime Dispute (Peru v Chile) case, which concerned the delimitation of the maritime boundary between Peru and Chile in the Pacific Ocean. The judgment brings to an end a six-year legal proceeding.
The judgment is particularly noteworthy in view of its conclusion that the parties had previously agreed a single maritime boundary, extending 80 nautical miles due west from the end of the land border. The Court then proceeded to draw the rest of the maritime boundary based on the principle of equidistance in accordance with the Court’s standard three-step methodology. Both Peru and Chile have hailed the judgment as a partial victory and have pledged to abide by it.