Bear Creek Mining Corporation

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Bear Creek Mining Corporation INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES Bear Creek Mining Corporation v. Republic of Perú (ICSID Case No. ARB/14/21) AWARD Members of the Tribunal Prof. Karl-Heinz Böckstiegel, President of the Tribunal Dr. Michael Pryles, Arbitrator Prof. Philippe Sands QC, Arbitrator Secretary of the Tribunal Ms. Mercedes Cordido-Freytes de Kurowski Assistant to the Tribunal Dr. Katherine Simpson Date of Dispatch to the Parties: November 30, 2017 REPRESENTATION OF THE PARTIES Representing Bear Creek Mining Corporation: Representing the Republic of Peru: Mr. Henry G. Burnett, Mr. Ricardo Ampuero Llerena Mr. Craig Miles, Comisión Especial que Representa al Estado Ms. Caline Mouawad, en Controversias Internacionales de Inversión Mr. Cedric Soule, Ministerio de Economía y Finanzas Mr. Fernando Rodríguez-Cortina, Jr. Cuzco 177 Ms. Eldy Quintanilla Roché, Lima Ms. Jessica Beess und Chrostin Republic of Peru. Mr. Luis Alonso Navarro, and Ms. Verónica García and King & Spalding LLP 1185 Avenue of the Americas Dr. Stanimir A. Alexandrov New York, N.Y. 10036-4003 Stanimir A. Alexandrov PLLC United States of America 1501 K Street, N.W., Suite C-072 Washington, D.C. 20005 and United States of America Mr. Luis Miranda Alzamora and and Ms. Cristina Ferraro Delgado Miranda & Amado Abogados Ms. Marinn Carlson and Av. Larco 1301 piso 20, Ms. Jennifer Haworth McCandless Torre Parque Mar Sidley Austin LLP Miraflores, Lima 18 1501 K Street, N.W. Republic of Peru Washington, D.C. 20005 United States of America and Mr. Juan Pazos Battistini and Mr. Ricardo Puccio Sala Estudio Navarro & Pazos Abogados Av. Del Parque 195 Lima 27 Republic of Peru ICSID ARB/14/21 i Table of Contents GLOSSARY OF DEFINED TERMS ...................................................................................................... VI DRAMATIS PERSONAE ..................................................................................................................... VIII I. INTRODUCTION ............................................................................................................................ 1 A. THE DISPUTE AND THE PARTIES ............................................................................................ 1 B. THE TRIBUNAL’S TERMINOLOGY AND REASONING ............................................................. 1 II. THE ARBITRAL TRIBUNAL ........................................................................................................ 2 III. PROCEDURAL HISTORY ............................................................................................................. 3 IV. THE PARTIES’ REQUESTS ........................................................................................................ 18 A. CLAIMANT’S REQUESTS ....................................................................................................... 18 B. RESPONDENT’S REQUESTS ................................................................................................... 20 V. STATEMENT OF FACTS ............................................................................................................. 21 A. SUMMARY OF FACTS BASED ON THE PARTIES’ SUBMISSIONS ........................................... 21 B. SUMMARY OF FACTS PRESENTED BY AMICI AND PARTIES’ RESPONSES .......................... 53 1. Summary of Facts Presented by DHUMA and Dr. López........................................... 53 2. Claimant’s Response to Amici Submission and Tribunal’s Question (a) .................. 58 3. Respondent’s Response to Amici Submission and Tribunal’s Question (a) .............. 67 VI. APPLICABLE LAW ...................................................................................................................... 77 VII. JURISDICTION OF THE TRIBUNAL ....................................................................................... 78 A. WHETHER AN INVESTMENT CONFERRING JURISDICTION ON THE TRIBUNAL EXISTS .... 83 1. Respondent’s Arguments ................................................................................................ 83 2. Claimant’s Arguments .................................................................................................... 84 3. The Tribunal’s Reasoning .............................................................................................. 86 B. WHETHER CLAIMANT HELD THE RIGHTS ON WHICH IT BASES ITS CLAIM .................... 87 1. Respondent’s Arguments ................................................................................................ 87 2. Claimant’s Arguments .................................................................................................... 88 3. The Tribunal’s Reasoning .............................................................................................. 91 C. THE LEGAL STANDARD: WHETHER LEGALITY OR GOOD FAITH IS A PREREQUISITE TO THE TRIBUNAL’S EXERCISE OF JURISDICTION ................................................................... 92 1. Respondent’s Arguments ................................................................................................ 92 2. Claimant’s Arguments .................................................................................................... 96 3. The Tribunal’s Reasoning ............................................................................................ 101 VIII. ADMISSIBILITY OF CLAIMANT’S CLAIMS ....................................................................... 102 A. RESPONDENT’S ARGUMENTS ............................................................................................. 102 ICSID ARB/14/21 ii B. CLAIMANT’S ARGUMENTS .................................................................................................. 104 C. THE TRIBUNAL’S REASONING ............................................................................................ 105 IX. THE MERITS ............................................................................................................................... 105 A. WHETHER RESPONDENT EXPROPRIATED CLAIMANT’S INVESTMENT IN THE SANTA ANA CONCESSION ........................................................................................................................ 105 1. Arguments from the Government of Canada and Party Responses......................... 107 2. Whether Supreme Decree 032 Effected an Indirect Expropriation ......................... 109 (a) Claimant’s Arguments .................................................................................. 109 (i) Arguments Related to Annex 812.1(b) ............................................................ 109 (ii) Arguments Related to Annex 812.1(c) and the Tribunal’s Questions (c) and (f) .. ..................................................................................................................... 110 (b) Respondent’s Arguments .............................................................................. 116 (i) Arguments Related to Annex 812.1(b) ............................................................ 116 (ii) Arguments Related to Annex 812.1(c) and the Tribunal’s Questions (c) and (f) .. ..................................................................................................................... 116 (c) The Tribunal’s Reasoning ............................................................................. 122 (i) Examination of the “factors” provided by Annex 812.1 FTA ..................... 123 (ii) Summary of the Factual Circumstances leading to Supreme Decree 032 ... 124 (iii) Legal Evaluation ......................................................................................... 126 (iv) Did Claimant’s Involvement of Ms. Villavicencio Justify the Derogation of Decree 083? ...................................................................................................... 127 (v) Did the Social Unrest Justify the Derogation of Supreme Decree 083? ..... 135 (vi) Conclusion regarding the indirect expropriation ......................................... 143 3. Whether Supreme Decree 032 Effected a Direct Expropriation ............................... 143 (a) Claimant’s Arguments .................................................................................. 143 (b) Respondent’s Arguments .............................................................................. 146 (c) The Tribunal’s Reasoning ............................................................................. 147 4. Whether Supreme Decree 032 was Lawful under Article 812 of the FTA ............... 148 (a) Claimant’s Arguments .................................................................................. 148 (b) Respondent’s Arguments .............................................................................. 153 (c) The Tribunal’s Reasoning ............................................................................. 154 5. Whether Supreme Decree 032 was a Valid Exercise of Police Powers ..................... 155 (a) Claimant’s Arguments .................................................................................. 155 (b) Respondent’s Arguments .............................................................................. 160 (c) The Tribunal’s Reasoning ............................................................................. 166 B. WHETHER RESPONDENT AFFORDED CLAIMANT FAIR AND EQUITABLE TREATMENT . 168 ICSID ARB/14/21 iii 1. Whether Respondent Afforded Claimant Fair and Equitable Treatment as Required by the FTA ....................................................................................................................
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