Here is a summary of the Bear Creek dispute with Peru. The ICSID...

Here is a summary of the Bear Creek dispute with Peru. The ICSID tribunal ruled in favour of Bear Creek but they were only awarded $18m in damages. Their project was more advanced than AVZ.

Parties Involved:

• Claimant: Bear Creek Mining Corporation (Canadian mining company)
• Respondent: Republic of Peru

Background:

• Bear Creek Mining Corporation held mining concessions for the Santa Ana silver project in Peru.
• In 2011, the Peruvian government issued Supreme Decree 032, which effectively revoked Bear Creek's mining concessions. This was in response to social protests against the project.

The Arbitration:

• Bear Creek initiated arbitration proceedings against Peru in 2014 at the International Centre for the Settlement of Investment Disputes (ICSID).
• The claim was brought under the Canada-Peru Free Trade Agreement.
• Bear Creek alleged that the Peruvian government's actions amounted to an indirect expropriation of their investment and a violation of fair and equitable treatment standards, among other treaty breaches.

The Award (2017):

• The ICSID Tribunal largely ruled in favor of Bear Creek Mining Corporation.
• Key findings:
  • Peru's Supreme Decree 032 constituted an unlawful indirect expropriation of Bear Creek's investment in the Santa Ana project.
  • Peru had breached its obligations to Bear Creek under the Canada-Peru Free Trade Agreement.
  • Bear Creek had acted in accordance with Peruvian law regarding community outreach, which Peru had supported and approved.
• Damages:
  • The Tribunal decided not to award damages based on the project's potential future profits (using a discounted cash flow method), as it deemed the project too speculative at the time.
  • They awarded approximately US $18 million in sunk costs, representing the amount Bear Creek had already invested in the project.

Post-Award:

• Peru challenged aspects of the award.
• Bear Creek indicated its intent to cooperate with the Peruvian government for the Corani project (a different silver project in Peru), following the award's outcome.

Significance:

The Bear Creek case highlights the complexities of resource development projects, the interaction between foreign investment and local communities, and the role of international investment law in resolving such disputes.

Sources for Further Information:

• Award: https://www.italaw.com/cases/documents/6322
• Bear Creek Mining News Release: https://bearcreekmining.com/news/2017/award-announced-in-bear-creek-minings-santa-ana-arbitration/