Tribunal Won't Put Glencore's $676M Bolivia Claim On Hold

By Kelly Zegers
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Law360 (May 22, 2020, 6:58 PM EDT) -- An arbitral tribunal has refused to suspend a Glencore International AG unit's $676 million claim against Bolivia, saying that while it must avoid unnecessary delay it can't ignore the coronavirus pandemic.  

The Permanent Court of Arbitration saw no basis for pausing the proceedings launched by the multinational natural resources company's subsidiary Glencore Finance (Bermuda) Ltd. over the revocation of certain mining rights and the nationalization of two smelters, according to the order dated May 5.   

The tribunal said it "cannot ignore the effects of the current global health crisis." 

Bolivia told the tribunal last month that outcomes of the COVID-19 pandemic, including restrictions in place in France, the United States and Bolivia itself, have hindered its ability to prepare its reply as to the amount of damages that should be paid, according to the tribunal.

Many relevant files related to the mine and a smelter central to the dispute are only available on hard copy and it's impossible to get to them for now, and some witnesses live in parts of the country where telecommunication infrastructure is limited, Bolivia told the tribunal. Due process requires the arbitration to be suspended given those circumstances, the country said.

Glencore opposed Bolivia's requests, saying its agreement to the country's suggested deadline of June 1 and its allowance for any late submission for information the country couldn't access in time was enough accommodation.

Any further measures "are unnecessary and would violate the principle of equal treatment of the parties and unfairly disadvantage," the company told the court.

The tribunal ultimately pushed the deadline for Bolivia to submit the rejoinder to June 5. The tribunal said the country can apply for permission to submit any additional documents it was unable to obtain prior to that deadline as a result of the pandemic.

Counsel for Bolivia declined to comment. A representative for Glencore did not immediately respond to a request for comment Friday.

The underlying dispute relates to Glencore Bermuda's possession of an indirect shareholding in a company called Compañía Minera Colquiri SA, which owned the exclusive right to exploit the Colquiri mine, Bolivia's second-largest tin mine, an antimony smelter, and a 100% shareholding in the Vinto tin smelter, Bolivia's largest.

Glencore claims Bolivia expropriated its investments when it nationalized the Vinto tin smelter called Complejo Metalúrgico Vinto SA through a 2007 decree, and three years later, when the country abruptly nationalized the antimony — a type heavy metal — smelter. Also in 2010, the country seized 161 tonnes of tin concentrates from the Colquiri mine, according to the 2017 statement of claim.

Glencore's access to the Colquiri mine was cut off in 2012, when a group of Bolivian miners tried to take it over. The company unsuccessfully sought the Bolivian government's assistance and the country ordered its state-owned mining company to take control of the mine.

Bolivia is represented by its attorney general and Eduardo Silva Romero, José-Manuel García Represa and Juan Felipe Felipe Merizalde Urdaneta of Dechert LLP.

Glencore Bermuda is represented by Nigel Blackaby, Noiana Marigo, Natalia Zibibbo, Paula Henin, Thomas Walsh, Santiago Gatcia and Diego Rueda of Freshfields Bruckhaus Deringer US LLP and by Linday Sykes, Javier Robalino Orellana, Pablo Ordoñez and Bernarda Flores Ivanovic of Ferrere Abogados.

The case is Glencore Finance (Bermuda) Ltd. v. Plurinational State of Bolivia, case number 2016-39, in the Permanent Court of Arbitration.

--Additional reporting by Caroline Simson. Editing by Jay Jackson Jr.

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