Bear Creek Seeks Arbitration with Peru over Violations of Canada-Peru Fair Trade Agreement
Monday, February, 10, 2014
Bear Creek, the Canadian company that contracted to operate the Santa Ana silver mining project, has issued an official request for arbitration proceedings stemming from the Peruvian government’s Supreme Decree 032, which revoked the company’s rights to the project and brought operations at the mine to a halt. The decree was a direct violation of the Fair Trade Agreement between Peru and Canada.
Officially, Bear Creek filed a Notice of Intent to request arbitration. This preserves their right to arbitrate the dispute while initiating a six month period of consultation, required by law, during which time both parties must make good-faith efforts to resolve the dispute. If no resolution is achieved, Bear Creek can then refer the issue to international arbitration.
Bear Creek is optimistic of its chances, although it has suffered huge losses due to the resources it has invested into the project, which it won via bid in a process completely legal under Peruvian law. Peru’s government has indicated it is willing to work with Bear Creek to find a solution to the dispute without having to submit to international arbitration, which very likely will not go its way, as Bear Creel is widely believed to have a strong case.