Colombia wins international lawsuit on Santurban paramo against Canadian mining multinational

An international arbitration court decided in favor of Colombia a lawsuit filed by the Canadian mining firm Red Eagle Exploration Limited against the denial of licenses for mining exploitation in paramo ecosystems.

Under the auspices of the International Center for Settlement of Investment Disputes (ICSID), the arbitration court described as a Colombia’s sovereign and legitimate act, for the common interest, the prohibition of mining activities in the Santurban paramo, regarding the protection of the environment.

This decision puts an end to the dispute between the mining multinational and Colombia’s environmental authorities to allow the development of a mining exploitation project in the Santurban paramo.

Red Eagle Exploration Limited requested compensation for over 130 million dollars, arguing a direct violation of the Free Trade Agreement (FTA) between Canada and the South American country.

The company alleged the legislative, administrative and judicial measures adopted by the Colombian authorities constituted an indirect expropriation of its investment under Article 810 of the FTA.

The arbitration court declared the prohibition of mining exploitation in paramo ecosystems as a Colombia’s sovereign and legitimate act and stated that Colombia did not fail to comply the terms of the Free Trade Agreement, endorsing the defense allegations presented by the Colombian State.

According to the court, the ban implemented in the Santurban paramo did not constitute an expropriation of Red Eagle's investment, given that, at the time of making its investment, the Canadian company acknowledged the likely prohibition of mining in paramo ecosystems in the area.

The eventual delays in the delimitation of the paramo area were due to the technical complexities of the “democratic and deliberative” process carried out by Colombian authorities, the court concluded.

Finally, the decision by the arbitrators denied the compensation close to USD 130 million, sought by Red Eagle.