The company sought compensation for the alleged damage suffered as a result of the State’s prices for the production of ethanol at plants operating in the country.
The company Campos de Pesé, S.A. did not achieve the reward it sought from Panama, to the International Center for Settlement of Investment Disputes (CIADI). This body said that the company failed in its pleadings, and the court therefore declined from its jurisdiction.
The Ministry of Economy and Finance was in charge of the country’s defence, through the Office of Investment Arbitration, along with the US firm Greenberg Traurig LLP.
Four years ago, Campos de Pesé sued the country under the basis of the bilateral investment treaty between Italy and Panama, arguing that it was a company under the control of Italian citizens, which had been harmed by the Panamanian state and demanded compensation of about $100 million.
His complaint was that in 2014 Panama had modified the regulation of the ethanol regime, so that it had destroyed the value of its investment.
At that time, the directors of the company warned that the government of Juan Carlos Varela established a financial siege after the National Energy Secretariat reduced the selling price of ethanol. Officials argued the measure was to benefit consumers.
But according to Campos de Pensé, the price set made the operation unfeasible from an economic point of view.
But by that time this was not the only hurdle I had had in Panama. In 2016 Campos de Pesé was found guilty of the crime against the environment and territorial planning, specifically against natural resources.
The company was initiated a process for the contamination of the river La Villa with atrazine, which occurred in mid-June 2014.
With regard to the arbitral case, Panama claimed that Campos de Pesé could not prove that Italian nationals controlled the company when the alleged commercial violations occurred in 2014 and were not a majority in the share composition.
The company was organized under a complex corporate and trust structure, which even requested that it be kept confidential in the arbitration process.
The court found that the 26 persons who allegedly owned Italian nationality did not directly or indirectly control Campos de Pesé, and therefore the plaintiff is not an investor protected by the bilateral treaty between Panama and Italy.
The court decided that it had no jurisdiction over the claims submitted by the plaintiff.
After years of submission of writings, production of information on the control structure of Campos de Pesé, S.A., and a hearing held in June 2023, Panama achieved a strong victory for the State, having the right to recover the costs incurred in arbitration for its defense, estimated at about $1.6 million, the MEF said, regarding the arbitral ruling of 1 March
This article has been translated from the original which first appeared in Prensa