Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canadian Company Considers Suing El Salvador

On December 9, 2008, a Canadian mining company, Pacific Rim Mining Corp., using its Nevada-based subsidiary Pac Rim Cayman LLC, filed a Notice of Intent under the investment provisions of the CAFTA-DR (that is the United States - Central American Free Trade Agreement).  This is the first such case under the CAFTA-DR free trade agreement.

Pacific Rim Cayman LLC and the Government of El Salvador have 90 days to consult and settle the dispute before the procedures to start arbitration procedures commence.  All indications are that a full investment dispute will proceed to arbitration.

The dispute relates to changes to mining laws that have been proposed by the Government of El Salvador that allegedly will negatively affect the investment of Pacific Rim Cayman LLC in El Dorado Mine in El Salvador.  However, the El Salvador Government appears to be taking the position that a technical review / environmental assessment relating to the El Dorado activities negatively affects the environment or the information is incomplete and an environmental assessment cannot be made.  The facts are far from clear and the dispute covers the topics of foreign investment and the environment.  This will be an interesting case to watch.

For more information about investment arbitration, bilateral investment treaties and / or free trade agreements, please contact Cyndee Todgham Cherniak (416-307-4168)

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