Spanish energy company Elecnor has withdrawn an investment treaty claim against Peru at the International Centre for Settlement of Investment Disputes (ICSID). The ICSID tribunal accepted the withdrawal and termination of Elecnor's treaty-based claim that one of its subsidiaries was not impeded from bidding on an electrical transmission line in Peru. The opportunity to bid for the project arose after Elecnor subsidiary Caravelí Cotaruse Transmisora de Energía failed to fulfill its contract to build and operate two power lines.
The move by Elecnor arose soon after Caraveli lost a separate contract-based ICSID claim seeking to blame the global financial recession for its failure to build the two lines in southern Peru under concession contracts. The international tribunal dismissed the case and awarded full costs in favor of Peru. The treaty case continues at half-power, backed by a Spanish co-investor.
"Investors in Latin America increasingly have used a two-track strategy, and this dispute correspondingly started with parallel contract and treaty cases," said White & Case partner Jonathan Hamilton, who represented Peru in both claims. "The contract case was dismissed, and the treaty case is now diminished."