(June 4, 2012, Weil News)
A tribunal at the International Centre for Settlement of Investment Disputes (ICSID) has ruled that a dispute between PacRim Cayman, LLC (PacRim), a subsidiary of Pacific Rim Mining Corp., and the Government of El Salvador involving an investment in a gold mine operation, can proceed to the next, and final, phase of the arbitration proceeding. Global law firm Weil, Gotshal & Manges represents PacRim in the arbitration.
The dispute centers on El Salvador’s 2004 refusal to grant PacRim licenses to operate the El Dorado gold mine because of fears that the mine would contaminate local water supplies. PacRim maintains that it has met or exceeded all legal requirements for a mining permit according to El Salvador’s mining, environmental and foreign investment laws, and that its design for the El Dorado site exceeds current Canadian and US environmental standards.
The ICSID Tribunal, a branch of the World Bank, rejected the Salvadorian government’s argument that the arbitration should be heard under the Dominican Republic-United States-Central America Freed Trade Agreement (CAFTA), ruling instead that ICSID has jurisdiction to hear PacRim’s claims under El Salvador’s Foreign Investment Law.
The final arbitration phase will address the merits of PacRim’s claims. Specifically, the ICSID Tribunal will determine whether El Salvador breached Salvadoran and international law by refusing to issue the mining licenses, as well as El Salvador's monetary liability for breaching the investment protections owed to a foreign investor as required under its Foreign Investment Law. This final phase will take place at ICSID’s Washington, DC headquarters.
PacRim is represented by Arif Ali, co-head of Weil’s International Arbitration practice, and partners Alex de Gramont and Ted Posner.