El Salvador Investment Protections

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1. INTERNATIONAL LAW INVESTMENT PROTECTION FRAMEWORK

El Salvador signed the ICSID Convention[1] on June 9, 1982, which was ratified on April 5, 1984.[2] El Salvador has been party to three ICSID cases, which are discussed later in the chapter. ICSID is included in a number of El Salvador’s investment treaties and is a forum potentially available to foreign investors under the Investment Law.

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2. INVESTMENT DISPUTES

El Salvador has signed 24 BITs with provisions on the settlement of disputes between the investor and the State through the use of international arbitration. El Salvador has signed several BITs that allow recourse to ICSID arbitration, including those with Belgium, Costa Rica, Finland, Germany, Israel, Netherlands, Paraguay, Peru, South Korea, U.K., USA, and Uruguay. El Salvador has also signed 7 FTAs with investment chapters. Of these, four afford foreign investors access to international arbitration to resolve their disputes with the Salvadorian state.

[Examples of Salvadoran investment treaty arbitrations include] claims by foreign investors in three ICSID arbitrations:

• Inceysa Villesoletana S.L. v. Republic of El Salvador, ARB/03/26[3]
• Commerce Group Corp. and San Sebastian Gold Mines, Inc. v. Republic of El Salvador, ARB/09/17[4]
• Pacific Rim Cayman LLC v. Republic of El Salvador, ARB/09/12[5]

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While Inceysa was brought under the El Salvador-Spain BIT, Commerce Group and Pacific Rim both involved mining issues and were brought under the DR-CAFTA.

[1] Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Washington, D.C., 18 Mar. 1965), entered into force 14 Oct. 1966 ("ICSID Convention").

[2] ICSID Website, List of Contracting States and Other Signatories of the Convention, available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDDocRH&actionVal=ContractingStates&reqFrom=Main.

[3] Inceysa Villesoletana S.L. v. Republic of El Salvador (“Inceysa”), ICSID Case No. ARB/03/26, Award (2 Aug. 2006).

[4] Commerce Group Corp. and San Sebastian Gold Mines, Inc. v. Republic of El Salvador (“Commerce Group”), ICSID Case No. ARB/09/17, Award (14 Mar. 2011).

[5] Pacific Rim Cayman LLC v. Republic of El Salvador (“Pacific Rim”), ICSID Case No. ARB/09/12, Decision on Respondent’s Preliminary Objections (2 Aug. 2010).