Tuesday, March 15, 2011

Commerce Group arbitration dismissed

The arbitration claim filed by Milwaukee, Wisconsin based Commerce Group was dismissed yesterday by the international arbitration tribunal hearing the case. The Commerce Group had filed suit under the DR-CAFTA trade agreement's investor protection provisions, asserting that El Salvador's decision to revoke its permission to mine in the country was improper.

The decision by the tribunal is a narrow and technical one. The arbitrators ruled that the Commerce Group had failed to comply with the "waiver" requirement under DR-CAFTA which requires that a party cease any other legal proceedings over the dispute and proceed only before the arbitration panel. Because the Commerce Group was still proceeding in the Salvadoran court system to challenge the permit process, the waiver requirement was not met. A copy of the decision can be downloaded here.

Because this is a narrow procedural decision, it sheds no light on the prospects for the similar arbitration brought by Canadian gold mining company Pacific Rim. Unlike the Commerce Group, Pacific Rim survived the initial motion to dismiss its claim.

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