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Final Commercial Arbitration between Pacific Rim & El Salvador Proceeding

Wednesday, June, 6, 2012

In a long running dispute between the subsidiary of Pacific Rim Mining Corp., PacRim Cayman, LLC, and the El Salvadoran government, commercial arbitration is entering its final phase. The origin of this dispute is that Pacific Rim had uncovered a large gold deposit in the country and made their presentation of how they would mine the gold to the government of El Salvador. The government did not issue permits to the Pacific Rim Mining Corporation, and the company disputes the validity of this denial.

El Salvador's Case throughout Legal Arbitration


According to representatives of the El Salvadoran government, they refused the mining permits to Pacific Rim because they believed that their methods of mining could have a substantial environmental impact, and that their waste disposal measures were insufficient to prevent further ecological harm.


From the beginning of the arbitration process, El Salvador has tried to end the arbitration on the basis of jurisdiction. First, they disputed the Tribunal's CAFTA jurisdiction, and while the Tribunal asserted CAFTA jurisdiction, they also decided that while Pacific Rim is included in CAFTA jurisdiction, they did not have enough “substantial” business in the United States to proceed under CAFTA.


El Salvador's second objection was to the jurisdiction of ICSID (International Centre for Settlement of Investment Disputes) itself, a branch of the World Bank designed to resolve international disputes, and who this current Tribunal represents. The Tribunal affirmed their authority in the matter, and now the case will proceed to arbitration.

PacRim's Side in this Government Arbitration


According to Pacific Rim, El Salvador's denial of mining permits violates El Salvador's law, as well as international laws regarding such authorizations. Their claim is that their mining methods and waste disposal techniques are perfectly in line with El Salvador's guidelines and international guidelines for safe mining. They seek, at the least, damages for expenditures accrued during the investigation process to find the gold.