First Case under Peru-US Treaty | White & Case LLP International Law Firm, Global Law Practice
First Case under Peru-US Treaty

First Case under Peru-US Treaty

The first case to be brought under the investor-state disputes mechanism in the US-Peru trade promotion agreement of 2009 involves proceedings to be administered by the International Centre for Settlement of Investment Disputes (ICSID). The panel, which will decide the claim by New York's Renco Group, issued its first procedural order, applying far-reaching transparency provisions comparable to those in the North American Free Trade Agreement and the Dominican Republic–Central America Free Trade Agreement. The tribunal has held that its decisions will be published, along with submissions by the parties and transcripts of hearings. The hearings will also be open to the public.

Although the proceedings are governed by the United Nations Commission on International Trade Law (UNCITRAL) rules, the parties have agreed that the ICSID will administer the case and – in an apparent first – maintain a record of procedural developments on its website as it would for a case under the ICSID rules. The ICSID has long provided administrative services for investor-state disputes under the UNCITRAL rules, but it has not previously published details of such cases. The case concerns liability for pollution in the Andean city of La Oroya. As well as US court proceedings, residents of La Oroya have brought a complaint before the Inter-American Convention on Human Rights - an autonomous judicial institution that enforces and interprets the provisions of the American Convention on Human Rights.

White & Case partner and head of Latin American arbitration Jonathan Hamilton, who leads the representation of Peru, said, "It is time that investment arbitration reflects the transparency, human rights and third-party implications of the intersection between economic and human development, under applicable treaties. That was the aim for establishing this kind of procedure, given that scores of children may be impacted and a clash of legal paradigms is in play. Peru also holds out the possibility of hearings in Peru or another reliable jurisdiction in Latin America."

Renco originally filed its claim in April 2011 but later withdrew it, submitting an amended claim four months later that removed Doe Run Peru as a co-claimant and state entity Activos Mineros as co-respondent. The constitution of the tribunal was also suspended pending developments in the Peruvian bankruptcy proceedings.