The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution which facilitates arbitration and conciliation of legal disputes between international investors. The ICSID is a member of the World Bank Group and is headquartered in Washington, D.C., United States. It was established in 1966 as a multilateral specialized dispute resolution institution to encourage international flow of investment and mitigate non-commercial risks. Although the ICSID is a member of the World Bank Group and receives its funding from the World Bank, it was established as an autonomous institution by a separate treaty drafted by the International Bank for Reconstruction and Development's executive directors and signed by member countries. The ICSID is contracted with and governed by its member countries, but has its own Secretariat which carry out its normal operations. The center facilitates arbitration and conciliation proceedings, allowing independent tribunals and arbitration mechanisms to hold proceedings under its rules, and all contracting member states agree to enforce and uphold arbitral awards in accordance with the ICSID Convention
In the case of disputes arising between foreign investors and the State, regarding their investment in El Salvador, the investors may submit the dispute to: (a) the International Center for Settlement of Investment Disputes (ICSID), in order to settle the dispute by means of conciliation and arbitration, in accordance with the Convention on Settlement of Investment Disputes Among States and Nationals of other States (ICSID Convention)(emphasis supplied).
In support of these claims, Claimant demonstrated its substantial and good faith investment in the El Dorado Project made in accordance with the laws of El Salvador between 2002 and 2008: an investment that marked a significant step along a lengthy trajectory towards the development of a modern mining industry in El Salvador. As borne out by hundreds of factual and legal exhibits, this trajectory marked a path that had been consciously chosen and consistently implemented by the Salvadoran State since its first days as an independent republic, and certainly for many years before an experienced group of mining industry professionals came together to form the group of companies now known in this arbitration as Pac Rim….
Pac Rim’s investment in El Salvador included: expending tens of millions of dollars in-country, to the direct benefit of the local economy; completing confirmatory mineral exploration drilling and detailed technical studies which demonstrated the economic and environmental feasibility of mining the Minita deposit; doubling the mineral resources associated with the El Dorado Project; and harnessing the success of its high-quality technical studies and exploration efforts to attract international financing for development of the mine. In addition, Pac Rim implemented a series of highly progressive environmental and social programs which were calculated to ensure that the Department of Cabañas – as well as the [Government of El Salvador] itself – would receive direct and lasting benefits…
Then, in March 2008, then President Saca declared a ban on all metallic mining projects in the country, abruptly and effectively nullifying the valid legal and regulatory regime upon which Claimant had relied in making its investment. The result of this gross misuse of authority by the Executive Branch of Government is a “de facto ban” or indefinite moratorium on metallic mining in El Salvador, which continues to date, and consequently the destruction of Claimant’s investment, and the frustration of its legitimate expectations to develop active mining operations at El Dorado.
This case is about a Canadian mining company that purchased exploration rights in El Salvador when time was running short to apply for a mining exploitation concession. The company then decided to make a big gamble and failed.
Instead of accepting the consequences of its decisions, the company started this arbitration to try to force the Government to grant it a gold mining concession to which it never had any right. It is now trying to convince this Tribunal to order the people of E1 Salvador to pay for the company‘s failed gamble and, in fact, to pay it a windfall from the national treasury by awarding "lost profits" based on property rights the company never had….
What Paciﬁc Rim still fails to understand is that it was obligated to comply with the laws of E1 Salvador and neither El Salvador nor any other country in the world has a legal obligation to change its laws to accommodate a foreign investor. As established in another ICSID case in which El Salvador was a respondent and prevailed, it is the foreign investor who has the legal obligation to make its investment in accordance with the laws of the host State. This self-evident principle is also recognized in the text of the Investment Law of El Salvador, the sole instrument under which this arbitration proceeds….
This case is simple. In fact, the key issue to be decided in this arbitration has been deﬁned and answered since 2010, when El Salvador ﬁled its Preliminary Objections to bring to bring an early end to a claim that, in El Salvador’s view, is devoid of legal merit: Pac Rim was not legally entitled to a mining exploitation concession and has no rights in the exploration licenses included in its claims. El Salvador breached no legal duty toward Pac Rim and is not liable for any alleged damages as a result of not granting the concession and not granting new environmental permits for exploration.
This is not a rapid process. I would not expect a decision for several months.