World Bank tribunal rules against Canadian miner in legal dispute with Colombia

Essiy Park, June 10, 2024

The request for arbitration was filed before ICSID in March 2018 and sought compensation of approximately USD 177 million.

According to one PRESS issued by the National Agency for the Judicial Defense of the State of Colombia, the decision of the International Center for the Settlement of Investment Disputes states that the ban on mining is a legitimate regulatory measure and that Colombia has not expropriated nor violated the standard of fair and equitable treatment.

The tribunal found that the South American government had acted in good faith and exercised regulatory powers to protect the marsh (known as páramo in Spanish) ecosystems.

In its decision, ICSID also noted that there was no legitimate reason for Montauk to expect Colombia not to protect the páramos.

“Colombia celebrates the decision of the arbitral tribunal, which recognizes our country’s legitimate efforts and measures to protect the environment and areas of general interest,” the press release said.

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This ICSID decision is in line with a March 2024 ruling by the same court in a similar suit brought by Canada’s Red Eagle Exploration Limited against Colombia to ban mining in the Santurbán springs.

Similar to the Montauk Metals award, ICSID found that Colombia did not breach the alleged reasonable expectation, nor did it act in a lack of transparency, unreasonable or arbitrary, disproportionate or discriminatory manner.

The tribunal concluded that Colombia had not acted in violation of the Minimum Treatment Standard, nor had it been shown that Colombia had indirectly expropriated Red Eagle’s mining concessions, as the company claimed in its claim.

One case remains

In its press statement, the National Agency for Judicial Defense of the State points out that the Montauk and Red Eagle judgments demonstrate that the country did not cause unnecessary uncertainty or take arbitrary measures in a similar case brought before ICSID by another Canadian miner , Eco. Gold Minerals.

In this particular case, the tribunal found in September 2021 that the Andean country acted in violation of investment protection rules enshrined in the Canada-Colombia free trade agreement when it issued new regulations that expanded wetland protection and reduced half the area where Eco Oro. develop the Angostura project.

However, ICSID also recognized that the measure was not discriminatory against Eco Oro’s shareholders and was an effort to legitimately protect the environment. Thus, he asked for more information from both sides.

Páramo de Santurbán is a protected area in the Andes Mountains. It is covered with subalpine forests above the continuous tree line but below the permanent snow mark, where water is naturally stored during the rainy season and released during the dry season.