Canada’s Gabriel Resources Sues Romania For $4.4B

Canadian project developer Gabriel Resources is suing Romania for a record C$5.7 billion (the equivalent of 4.4 billion American dollars) before the World Bank’s International Center for Settlement of Investment Disputes (ICSID).


Imaginea articolului Canada’s Gabriel Resources Sues Romania For $4.4B

Canada’s Gabriel Resources Sues Romania For $4.4B

The company hopes to tie up a drawn-out dispute with the country’s fluid government, based on what it argues boils down to the effective expropriation, without compensation, of its flagship Rosia Montana gold/silver project – the largest undeveloped gold deposit in Europe and among the top 20 undeveloped gold projects globally.

“The ICSID arbitration seeks compensation for the loss and damage resulting from the Romanian State’s wrongful conduct and its breaches of protections against expropriation as set out under bilateral treaties, as well as its unfair and inequitable treatment and discrimination of the project and related licences,” said Gabriel president and CEO Jonathan Henry.

Romania has signed bilateral investment treaties (BITs) with both the UK and Canada. Both treaties provide that disputes may be submitted to arbitration before the World Bank’s ICSID. Gabriel in January 2015 first served a notice of dispute to the Romanian government to seek an amicable resolution to the permitting and authorisation of the Rosia Montana gold and silver mine, which has been stalled for years while the company awaits a key environmental permit.

Gabriel plans to file its memorial on the merits of the claim, wherein factual and legal arguments supporting its claims against the State will be detailed, before Friday. The memorial will also include details of the claimed quantum of the damages sustained on the back of Romania’s alleged treaty breaches.

“Since early 2015, Romania has not responded to the company’s notice of dispute or request for arbitration. Instead it has implemented tangential investigations, penalties and harassment,” Henry alleged.

“By licensing and then blocking the implementation of the projects, without due process and without compensation, Romania has deprived Gabriel entirely of the use, benefit and value of its investments in Romania, including its rights to develop the projects," he added.

Gabriel’s claim is based on alleged violations by Romania of several provisions of the BITs, including the expropriation of its investments in Romania without compensation; the failure to accord to its investments fair and equitable treatment and full protection and security; and the impairment of its investments by discriminatory and unreasonable measures.

Under the ICSID schedule of proceedings, Romania will be required to file its response to the Gabriel memorial by no later than February 15, 2018. Thereafter, Gabriel will be required to file a reply to the counter-memorial by September 5, 2018 and Romania will have to file its response to that reply by February 19, 2019. A hearing on the merits of the claim before the tribunal, in Washington DC, is scheduled to be held from September 9 to 20, 2019.

“The Rosia Montana project represents one of the largest proposed foreign direct investments in the country, with the potential to contribute $24-billion into the Romanian economy. The government’s actions will likely be viewed with apprehension by prospective investors,” he cautioned.


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