Fibranet, S.A and Cablefrecuencias, S.A. de C.V. v. Republic of El Salvador

At a glance

Parties

Fibranet, S.A. (Guatemala) and its subsidiary Cablefrecuencias, S.A. de C.V. (El Salvador) v. the Republic of El Salvador

Forum and rules

Intended: ICSID Convention and ICSID Arbitration Rules (notice of intent only)

Treaty

CAFTA-DR (Chapter 10) and the CACM Agreement on Investment and Trade in Services

Sector

Telecommunications; 700 MHz spectrum concessions

Outcome

Pre-arbitration stage. The published document is the notice of intent of 27 September 2024; it does not show whether arbitration followed.

Amount

Anticipated claim: at least USD 130 million in compensatory damages, plus interest and legal fees

The dispute

Fibranet, a Guatemalan company, bought 99.9% of Cablefrecuencias, a Salvadoran company, in 2010. Cablefrecuencias held subscription-based concessions for wireless bands 53, 55 and 59 in the 700 MHz band, and Fibranet planned to use them for a nationwide 4G LTE mobile network. In 2016 Legislative Decree No. 372 created a new renewal procedure for free-to-air concessions. On 23 August 2018 the regulator SIGET held that this procedure also applied to subscription-based concessions. Because Cablefrecuencias had not followed it, SIGET extinguished its concessions retroactively as of 29 November 2017. The Administrative Court (18 July 2023) and the Supreme Court's Administrative Disputes Chamber (7 November 2023) upheld SIGET's decision. Fibranet gave notice that it would bring claims for judicial expropriation, breach of full protection and security, and breach of fair and equitable treatment through a denial of justice.

Key holdings

1. No decision has been published. The notice of intent claims that the Salvadoran courts, by upholding SIGET's August 2018 Resolution, expropriated the investment in breach of Article 10.7 of CAFTA-DR and Article 3.11 of the CACM Treaty. p. 4–5
2. The notice claims a breach of full protection and security, and of fair and equitable treatment through a denial of justice, under Article 10.5.1 of CAFTA-DR and Article 3.03 of the CACM Treaty. p. 5
3. The claimant stated that it would file under the ICSID Convention unless the dispute was resolved within 90 days, and that it would seek at least USD 130 million plus interest and legal fees. p. 5

Procedural history

1. 29 December 2007SIGET registers Cablefrecuencias' acquisition of the 700 MHz bands.
2. 5 May 2016The Legislative Assembly issues Decree 372, which sets a new renewal procedure for free-to-air concessions.
3. 23 August 2018SIGET Resolution No. T-0862-2018 extinguishes the concessions retroactively as of 29 November 2017.
4. 18 July 2023The Administrative Court rejects Cablefrecuencias' challenge.
5. 7 November 2023The Supreme Court's Administrative Disputes Chamber affirms the Administrative Court's decision.
6. 27 September 2024Notice of intent to submit claims to arbitration served on El Salvador.

Tribunal, counsel and experts

For the claimant

Eversheds Sutherland (International) LLP

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Keywords

• CAFTA-DR
• CACM Agreement on Investment and Trade in Services
• telecommunications
• 700 MHz spectrum
• concession renewal
• SIGET
• Decree 372
• judicial expropriation
• denial of justice
• fair and equitable treatment
• full protection and security
• notice of intent
• 4G LTE
• administrative silence
• El Salvador
• Guatemalan investor

Summary generated with AI from the published documents — refer to the award for the authoritative text.