Originally from Journal of Damages in International Arbitration

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I.  INTRODUCTION

On April 4, 2016, an arbitral tribunal composed of Dr. Laurent Lévy (President), Dean John Y. Gotanda (Claimant’s appointee), and Prof. Laurence Boisson de Chazournes (Respondent’s appointee) issued an award in ICSID Case No. ARB(AF)/11/2, Crystallex International Corporation v. Bolivarian Republic of Venezuela (the “Award”), which was brought under the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investment (the “BIT”). The Tribunal found that Venezuela had unlawfully expropriated Claimant’s investment in the Las Cristinas gold mine project.  In addition, the Tribunal held Venezuela liable for its failure to accord Claimant’s investment fair and equitable treatment (“FET”).  The Tribunal awarded Claimant US$ 1.202 billion with each party bearing its own costs.  In addition, the Tribunal stated that Claimant was entitled to pre-award interest totaling $184,663,586.22, calculated using the 6-month average U.S. Dollar LIBOR + 1% compounded annually from April 13, 2008, to April 4, 2016.  Claimant was also awarded post-award interest calculated using the 6-month average U.S. Dollar LIBOR + 1% compounded annually from April 4, 2016 until the date of full payment.

II.  FACTUAL BACKGROUND

Crystallex was a Canadian mining company that had contracted for the rights to exploit the rich gold deposits contained in the Las Cristinas gold mine (“Las Cristinas”), which is located in the Guayana region of Venezuela.  Las Cristinas purportedly contains one of the world’s largest undeveloped gold deposits.   The dispute stemmed from Venezuela’s failure in April 2008 to grant Crystallex a key environmental permit (the “Natural Resources Permit”) and subsequent termination in February 2011 of a related Mine Operation Contract (“MOC”) concerning the development of Las Cristinas.