Spanish multinationals trust an international arbitrator to sort out the conflict with the Peruvian government

Spanish multinationals trust an international arbitrator to sort out the conflict with the Peruvian government

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Spanish multinationals trust an international arbitrator to sort out the conflict with the Peruvian government

More than a score of Spanish multinationals have interests in Peru, where the change of government, led by the leftist teacher Pedro Castillo, has raised a wave of uncertainty due to the possible radical shift in the country’s economic policy towards Marxist or anti-government concepts. free market. In particular, four groups – ACS, FCC, Telefónica and Enagás – have a lot at stake because they have millionaire lawsuits pending arising from contracts signed with previous Administrations.

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These four large companies trust that the files opened at the International Center for Settlement of Investment Disputes (ICSID), the World Bank’s international arbitration body, will mediate in their favor and avoid a conflict with the new Castillo Executive, which During the campaign he was very belligerent with foreign investors in the Andean country.

The Peruvian State is now being sued in a score of processes for violating the rights of foreign investments, in which it is claimed 5,000 million dollars (4,250 million euros). At the moment, he has received sentences in his favor for about 110 million dollars and has been sentenced to pay only 43 million in total, but analysts suggest that this balance will soon change due to processes in which the Peruvian Administration committed abuses that must be resolved in ICSID.

Lima Metro

This is the case of ACS and FCC that, together with their Italian partners Impregilo and Ansaldo and the Peruvian company Cosapi, have just won the lawsuit they filed before ICSID in 2017 for the works of line 2 of the Lima Metro. The agency considered last July that, as defended by the Spanish companies, it was the Peruvian government that breached its contractual obligations in relation to the construction project. The conclusion was that the delivery of the land where the infrastructure had to be developed did not present the conditions agreed in the contract, which caused more than a year of delay in the works.

After this resolution, the consortium in which ACS and FCC are present presented another arbitration claim with ICSID on August 20, according to EL PAÍS. Although both construction companies have not responded to the requirements of this newspaper, it is estimated that this new lawsuit seeks to specify the compensation requested from the Peruvian Government, which could be around 700 million dollars (about 600 million euros). The contract was signed in 2014 for the construction of a line that will cross 27 kilometers of track in a total of 27 stations, and it is estimated that it will be completed in 2024.

Telefónica and Enagás

Telefónica has also decided to go to arbitration after having an endless tax lawsuit with the Peruvian Administration that has lasted for more than two decades. Last March, the lawsuit of the telecommunications operator was registered with ICSID alleging that the Peruvian tax administration – known as the National Superintendency of Customs and Tax Administration, known as Sunat – and other state agencies fail to comply with the obligations established in the investment agreement. reciprocal between Spain and Peru of 1994, “including arbitrary and discriminatory actions.” The operator claims a millionaire compensation, the amount of which it has not wanted to reveal, for all the damages suffered.

While ICSID decides, the procedural situation for the Spanish company is twisted. Telefónica has challenged the decision adopted by the Ministry of Transport and Communications which denied the renewal of the concessions for the provision of fixed telephony services, valid until 2027, and is pending the renewal of the 1,900 MHz band of mobile telephony for all Peru (except Lima and Callao), which expired in 2018.

In the tax chapter, after a favorable ruling last February from the Constitutional Court on late payment interest, on June 23 it received an unfavorable ruling from the Supreme Court in relation to the balance in favor usable in the declaration of Corporation Tax for the year 2000 In this way, it has had to increase the provision for future losses that these tax litigation may cause to 2,895 million Peruvian soles, equivalent to 631 million euros, according to data provided by the company.

For its part, Enagás plans to enter into a negotiation with the new Peruvian government to seek a friendly agreement to the conflict opened by Gasoducto Sur Peruano (GSP), the gas pipeline project of more than 1,000 kilometers that was paralyzed in 2017. A negotiation parallel to the process arbitration that the company has open, majority owned by the Spanish State, in the ICSID and for which it claims almost 400 million euros in compensation.