27|08|2019

ICSID Tribunal awards Prodeco’s main claims and establishes that Colombia should pay an amount in excess of US$20 million

Tuesday 27 August 2019. The dispute arose in connection with an Amendment to the mining contract for the Calenturitas mine, signed in 2010 between Prodeco and Ingeominas. In 2015, the General Comptroller stated that said Amendment was detrimental to Colombia and thus ordered Prodeco to pay approximately US$19.1 million as an alleged fiscal  liability for calendar year 2010.

The ICSID Tribunal established that the General Comptroller’s decision of 2015 was an unreasonable measure that harmed the investment of Glencore and Prodeco in Colombia and violated the standard of fair and equitable treatment established by the investment treaty between Switzerland and Colombia.

On this basis, the Tribunal ordered Colombia to pay to Prodeco the fiscal liability amount of US$19.1 million plus interest in addition to reimbursing Glencore and Prodeco over US$2 million of costs. The Tribunal  held that Colombia (including the Colombian General Comptroller’s Office) must abstain from repeating the same wrongful conduct in the future.

The Tribunal deemed  it unnecessary to refer to Prodeco's subsidiary request that Colombia pays some US$600 million if it intended to persist in its conduct in breach of  the treaty.

For Glencore and Prodeco it is very important that this dispute has been resolved and hope to continue its long-term investments in Colombia for the benefit of the Colombian people and the country's economy, in cooperation with the National Government.

 

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