Magazine article Dispute Resolution Journal

CAFTA Arbitration against El Salvador Dismissed

Magazine article Dispute Resolution Journal

CAFTA Arbitration against El Salvador Dismissed

Article excerpt

On March 14, 2011, in an investor-state arbitration administered by the In - ternational Centre for Settlement of Investment Disputes (ICSID), the tribunal dismissed the claims against the Republic of El Salvador under the Central Ameri can Free Trade Agree ment, after having found that the inves tors failed to comply with the treaty by not terminating a pending lawsuit when it filed the arbitration. Commerce Group and San Sebastian Gold Mines, Inc. v. El Salvador, Award of March 14, 2011, ICSID Case No. ARB/09/17.

The claims arose out of El Sal - vador's revocation of the investors' environmental permits and decision not to renew their permits to mine for precious metals. The investors argued that these "measures" by El Salvador amounted to a violation of the government's obligations under the CAFTA. With their request for ICSID arbitration, the inves tors filed a written waiver of rights in accordance with CAFTA Article 10.18.2(b)(ii). The written waiver states, in relevant part:

[T]he claimants hereby waive their rights to initiate or continue any domestic proceeding with respect to any measure alleged to constitute a breach for purposes of the present Notice of Arbitra tion. Not with - standing the foregoing, pursuant to Article 10.18.3 of CAFTA, the claim ants reserve the right to initiate or continue any proceedings for injunctive relief not involving the payment of damages before any administrative or judicial tribunal of the Republic of El Salvador, for the purposes of preserving their rights and interests during the pendency of this arbitration. …

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