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El Salvador Wins High-Stakes Investment Dispute with Multinational Miner

LADB Article ID: 80133
Category/Department: El Salvador
Date: 2016-11-03
By: Benjamin Witte-Lebhar

A jilted mining company’s years-long quest to secure a multi-million-dollar settlement from El Salvador came to a crashing halt this month when an arbitration panel in Washington, D.C., finally decided that the controversial claim lacked merit. The International Centre for Settlement of Investment Disputes (ICSID), a business tribunal connected to the World Bank, issued the ruling on Oct. 14, ending a punishing process that could have required the cash-strapped Central American country to shell out US$250 million. As it was, El Salvador spent a reported US$13 million on legal bills over the course of the proceedings, which the Pacific Rim Mining Corporation, a Canadian enterprise, launched in 2009 after Salvadoran authorities refused to issue an extraction permit for a mine the company had spent years—and an estimated US$77 million—exploring and developing. The ICSID agreed, ultimately, that El Salvador had legitimate reasons to reject Pacific Rim’s petition for an operating license, one of them being that the company never even secured ownership of much of the property in question.

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