Lupaka Gold sues Peru in US over $69 million arbitration award

A Canadian gold mining company sued Peru in the US as part of efforts to collect around $69 million it was awarded over violent protests that halted operations at one of its mines in the South American nation.

Lupaka Gold Corp. won the award, which includes interest, last year in an arbitration proceeding that found the Peruvian government failed to stop the protests by rural communities at the company’s Invicta mine. The suit filed Feb. 27 in federal court in Washington seeks to have a US judge confirm the award.

“Lupaka is confident that it will soon be able to begin attaching Peruvian assets anywhere within the United States,” the company said in a Monday statement announcing the lawsuit.

Peru’s finance ministry, which represents Peru in disputes against international investors, had no immediate comment.

The lawsuit is at least the second one in recent years against Peru over unpaid arbitration awards, as the nation faces an increasing number of disputes with international investors.

Lupaka’s move appears to follow in the footsteps of airport construction conglomerate Kuntur Wasi, which was paid $91 million shortly after a US court confirmed an arbitration award in its favor. Peru did not present lawyers to defend itself in that lawsuit.

“The mining industry will undoubtedly take note of Peru’s refusal to comply with its obligations under international law when making investment decisions,” Lupaka chairman Gordon Ellis said in a statement.

Carlos Jose Valderrama, a former head of Sicreci, the Peruvian commission that handles arbitration cases, said the case could offer a road map for other foreign companies whose operations are beset by protests.

Peru is also facing a high-profile dispute with Brookfield Asset Management, which has filed a $2.7 billion arbitration alleging that the city of Lima improperly expropriated a series of toll roads it managed under a concession. An arbitration against Peru over the matter is still pending, although the city of Lima has already lost arbitrations over the issue totaling about $200 million.

(By Marcelo Rochabrun)