The most relevant updates of The Americas from the global International Arbitration and ADR practice group at Garrigues.
Chile to face insurance disputes
Since Chile recently enacted Law 21.330, which allows individual beneficiaries of life annuities to withdraw up to 10% of their pension funds, several insurance companies owned by foreign entities have stated their intention to trigger the defense mechanisms provided in free trade agreements.
Ohio National Life Insurance Company has already served Chile with its complaint under the US-Chile free trade agreement. The two parties will be now facing a 90-day negotiation term before initiating ICSID arbitration.
Furthermore, Switzerland’s Zurich Insurance’s subsidiary, Chilena Consolidada Life Insurance Company, has recently activated the dispute resolution mechanism provided in the investment treaty between Chile and Switzerland. The company sent a notice of dispute, which gives rise to a 6-months consultation period.
Other foreign owned insurance companies have also stated they will also trigger the dispute resolution clause of the corresponding treaty in order to safeguard their rights that they allege have been damaged by the Law 21.330.
Glencore International A.G. files a new arbitration against Colombia
Swiss mining company Glencore International A.G. has filed, for the third time, a claim against Colombia for the alleged impairment of its investment in the Access Canal of the Port of Santa Marta. Glencore has invested more than USD 3 billion in the country´s mining industry, but it has also been obliged to pay more than this in taxes and royalties.
While the details of the claim are unknown for now, it is understood that Glencore has brought the arbitration under the Bilateral Trade Agreement between Colombia and Switzerland from 2006.
The arbitration provides the National Agency for the Defense of the State with the possibility to demonstrate the government´s good faith in protecting foreign investment in the mining industry.
The previous arbitration that found in favour of Glencore in 2019, for an amount of USD 19.1 million, is the subject of annulment proceedings.
Azteca Comunicaciones threatens arbitration against Peru
Azteca Comunicaciones, a company responsible for the "National Fiber Optic Backbone Network: Universal North Coverage, Universal South Coverage and Universal Central Coverage" project in Peru, has threatened the country with an ICSID arbitration if it decides to terminate the project concession contract.
Such a move would in Azteca´s view constitute an indirect expropriation.
Lima Metro Line 2: ICSID partial decision unfavorable to Peru
An ICSID tribunal has found against Peru in the arbitration filed against it by Metro de Lima Línea 2 S.A. Having accepted jurisdiction, the tribunal found, among other things, that Peru had delayed in delivering the concession areas and had caused delay in the execution of ¨Mandatory Investments”. The tribunal has deferred the question of damages and the costs of the arbitration to the final award.