Crystallex awarded US$1.386 billion by ICSID for expropriation of Las Cristinas mining project by Venezuela
April 05 2016 - 11:08AM
Business Wire
Crystallex International Corporation (TSX.V: KRY) welcomes the
Award released yesterday by the Additional Facility of the World
Bank’s International Centre for Settlement of Investment Disputes
(“ICSID”) in relation to its claims against the Bolivarian Republic
of Venezuela (“Venezuela”). The Tribunal awarded the company
damages of US$1.202 Billion plus pre- and post-award interest due
to Venezuela’s unfair and inequitable treatment, and unlawful
expropriation of Crystallex’s investment in the Las Cristinas
mining project.
Crystallex filed its Request for Arbitration before ICSID’s
Additional Facility on February 16, 2011 pursuant to the Agreement
between the Government of Canada and the Government of the Republic
of Venezuela for the Promotion and Protection of Investments (the
“Treaty”).
The Award, which was rendered on April 4, 2016, upheld
Crystallex’s claims that Venezuela breached Articles II(2) and
VII(1) of the Treaty by failing to accord Crystallex’s investments
in Venezuela fair and equitable treatment and by unlawfully
expropriating those investments.
As a result of these breaches, the Tribunal has ordered
Venezuela to pay damages currently amounting to US$1.386 billion,
based on a value for Crystallex’s investment in the Las Cristinas
mine of US$1.202 billion on 13 April 2008 – the date when an
environmental permit was denied by Venezuela – together with pre-
and post-award interest from that date.
Among other things, the Tribunal criticized Venezuela’s Ministry
of the Environment for its “arbitrary” and “non-transparent and
inconsistent conduct” in connection with its denial of an
environmental permit. The Tribunal stated that it “cannot but
conclude that the Permit denial letter and the Romero Report on
which the first appears to be based are so fundamentally deficient
that, to the eyes of a reasonable third person, they ‘surprise a
sense of juridical propriety’…”. Venezuela, the Tribunal concluded,
“frustrated Crystallex’s legitimate expectations …, engaged in
arbitrary conduct in denying the Permit and rescinding the
[Contract it had signed with Crystallex], and committed several
acts lacking transparency and consistency.” The Tribunal therefore
found that Venezuela’s “overall conduct vis-à-vis Crystallex, thus
violated the [Treaty] standard … and caused all of the investments
made by Crystallex to become worthless.”
Robert Fung, Crystallex CEO commented: “On behalf of
Crystallex’s board of directors, management, employees and all of
its stakeholders, we are pleased that the Tribunal has recognized
Venezuela’s unlawful expropriation of the Company’s investment in
the Las Cristinas mining project. The company looks forward to
collecting on the Award on behalf of all of its stakeholders. We
thank our stakeholders for their deep understanding and support
throughout this difficult and prolonged process, and our legal
team, led by Freshfields’ partner Nigel Blackaby.”
About Crystallex
Crystallex International Corporation is a Canadian based mining
company, with a history of acquiring, exploring, developing and
operating mining projects. Crystallex has successfully operated an
open pit mine in Uruguay and developed and operated three gold
mines in Venezuela. The Company's principal asset is its
international claim in relation to its investment in the Las
Cristinas gold project located in Bolivar State, Venezuela.
For more information on the Company’s ICSID
case visit:
https://icsid.worldbank.org/apps/icsidweb/cases/Pages/casedetail.aspx?CaseNo=ARB%28AF%29/11/2
For more information on the Company’s CCAA Proceedings visit:
www.ey.com/ca/crystallex
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain
statements included in this press release, constitute
forward-looking statements. The words "believe," "expect,"
"anticipate," "contemplate," "target," "plan," "intends,"
"continue," "budget," "estimate," "may," and similar expressions
identify forward-looking statements. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by the Company, are inherently subject
to significant business, economic, financial and political
uncertainties and contingencies. Many factors could cause the
Company's actual results to differ materially from those expressed
or implied in any forward-looking statements made by, or on behalf
of, the Company. Investors are cautioned that forward-looking
statements are not guarantees of future performance and,
accordingly, investors are cautioned not to put undue reliance on
forward-looking statements due to the inherent uncertainty therein.
For more information on the risks, uncertainties and assumptions
that could cause the Company's actual results to differ from
current expectations, please refer to the Company's public filings
available under the Company's profile on SEDAR at www.sedar.com and
the documents relating to the CCAA proceedings available on the
Monitor's website. Forward-looking statements are made as of the
date of this press release and the Company disclaims any intent or
obligation to update publicly such forward-looking statements,
whether as a result of new information, future events or results or
otherwise, except as required by applicable law.
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BARETZ+BRUNELLEJessica Klein, 646-780-8828
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