Republic of Colombia Achieves Third Victory in Páramos Mining Ban Dispute

A cross-office team at Latham has secured a third victory for the Republic of Colombia at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in connection with Colombia’s ban on mining in the páramos, a fragile biodiverse ecosystem in the Andes.

Having defeated two claims worth US$400 million earlier this year, the Latham team successfully defended a US$1.1 billion claim brought by Eco Oro Minerals Corp., a Canadian junior mining company, under the Canada-Colombia Free Trade Agreement (FTA). Eco Oro argued that the mining ban destroyed its large-scale gold mining project, violating the FTA's expropriation clause and the customary international law minimum standard of treatment.

Following comprehensive briefings, a hearing on jurisdiction and the merits was held at the World Bank in Washington, D.C. in January 2020. In September 2021, the Tribunal issued a decision on jurisdiction and liability, finding by majority that Colombia’s measures to protect the páramo did not constitute expropriation. The Tribunal majority concluded that the prohibition of mining activities in páramo ecosystems constituted a legitimate exercise of the Colombia's regulatory powers to protect the general interest, especially in matters relating to environmental protection, and recognised the fundamental role of páramos as water sources and regulators of water cycles in the fight against climate change. However, a different majority of the Tribunal found that certain aspects of Colombia’s implementation of the mining ban breached the minimum standard of treatment under the FTA, preventing Eco Oro from applying for an environmental license to develop its mining project. The Tribunal also noted that it had no evidence on record to determine the loss resulting from Colombia’s breach of the minimum standard of treatment and opened an additional phase of the arbitration to address this issue.

After further extensive briefing, the Tribunal rendered its final award on July 15, 2024, declining to award any damages to Eco Oro. The Tribunal accepted Latham’s arguments that Eco Oro had failed to prove that it would have secured an environmental license but for Colombia’s breach, and that the lost opportunity to apply for such a license had any value.

With this victory Latham has now successfully defended all three claims brought in relation to Colombia’s ban on mining in the páramos, thereby avoiding Colombia over US$1.5 billion in potential liability.

The Latham team was led by international arbitration partners Fernando Mantilla-Serrano in Paris and Samuel Pape in London, with associates Diego Romero and Hugo Varenne in Paris.