Quito, June 1, 2016
ARBITRATION TRIBUNAL PUNISHES IMPROPER CONDUCT OF COMPANY COPPER MESA AND SUBSTANTIALLY REDUCES THE PLEA FOR COMPENSATION
The Tribunal assigned to the arbitration proceedings brought by Copper Mesa Mining Corporation against the Republic of Ecuador, issued a final award regarding the termination of mining concessions located in Junín, Chaucha and Telimbela in purported violation of Articles II, IV, and IV of the Bilateral Investment Protection Treaty signed with Canada (BIT), accepting the argument set forth by the State of Ecuador’s defense team as to the company also being liable for purported harm caused by its investment. Thus, it reduced the amount claimed by the Canadian mining company by 85%, awarding compensation in the amount of approximately US$ 19 million US dollars of the US$ 69.7 that was requested from the Tribunal in its complaint.
Through this award, the Tribunal strongly criticizes the unlawful conduct of the company and its staff, especially on account of its use of violence, obstruction of roads, recruitment and contracting of armed staff, as part of a premeditated plan to “take justice into its own hands,” all with full knowledge of the company’s managers in Canada.
When addressing this award, the State Attorney General, Dr. Diego Garcia Carrión, lamented the Court’s contradictory decision; because despite having accepted the majority of Ecuador’s arguments, it did not reject the claimant’s arguments in their entirety, nor did it reduce the damages awarded the company by a greater amount. To the State Attorney General, the fact that the award ends in a statement that Ecuador breached the BIT signed with Canada, despite the investor’s various unlawful acts – duly proven in the arbitration – is unacceptable.
The compensation granted to the company is based on the Tribunal’s conclusion that the Republic of Ecuador is liable for the BIT’s violation, as it indirectly expropriated the Claimants’ investments and failed to afford them fair and equitable treatment. In the opinion of the Tribunal, termination of the Junin and Chaucha mining concessions by application of the mining mandate constitutes an expropriation, because the Claimant was not granted due compensation or the opportunity to challenge these terminations before an administrative or judicial authority. The Tribunal rejected the claims made regarding the Telimbela concession, as the company only had an option to buy and the BIT does not protect it.
According to State Attorney General Garcia, the State’s defense team has found sufficient reason to submit a motion to reverse the award with the Courts at The Hague, place of the arbitration proceedings.
The Canadian company submitted its complaint on January 21, 2011, within the framework of the Bilateral Investment Protection Treaty signed with Canada. The hearing was held in the city of Washington D.C. between the 16th and the 26th of September of 2013.
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