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Pacific Rim v El Salvador (ICSID Case
No. ARB/09/12) is a recent decision by the International Centred
for Settlement of Investment Disputes (ICSID). The arbitration is
brought under the Dominican Republic — Central America
— United States Free Trade Agreement (CAFA) and
Investment Law of El Salvador.
The dispute between the parties are Pac Rim's claims against
El Salvador relating to the following allegations: "(i) the
Respondent‟s arbitrary and discriminatory conduct, lack
of transparency, unfair and inequitable treatment in failing to act
upon the Enterprises' [i.e., subsidiary companies] applications
for a mining exploitation concession and environmental permits
following the Claimant‟s discovery of valuable deposits
of gold and silver under exploration licenses granted by MINEC for
the Respondent; (ii) the Respondent's failure to protect the
Claimant's investments in accordance with the provisions of its
own law and (iii) the Respondent's unlawful expropriation of
the investments of the Claimant (with the Enterprises) in El
Salvador.
The dispute is undoubtedly complex. But after three years of
litigation the tribunal has gotten to the point where it is
resolving jurisdictional defenses. Its decision on jurisdiction is
hundreds of pages long, broken up into seven sub-parts, each
individually and separately numbered. The jurisdictional decision
comes after several days of hearings just on the jurisdictional
issues held in 2011 and proceeds to address in detail the
background to the decision, including an earlier extensive decision
rendered in 2010; each of the claims of lack of jurisdiction; an
extensive discussion of the burdens of proof on each defense; a
summary of each side's case; and the tribunal's own
analysis and determinations. The decision also discusses the issue
of costs of the proceeding and reiterates over many pages earlier
decisions that the Panel had made on the issue of cost
shifting.
At the end of all this the Panel now appears to be ready to move
to the next phase of the expeditious dispute resolution technique
that is arbitration and address other preliminary matters and then,
possibly, the merits. There do not appear to be dates set for these
events.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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