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International Arbitration Forum

Desarrollo Vial de los Andes S.A.C. (Deviandes) v. Republic of Peru

Case summary

At a glance

Parties
Desarrollo Vial de los Andes S.A.C. (Deviandes), a Peruvian company under Colombian control, v. the Republic of Peru
Case no.
ICSID Case No. ARB/20/18
Forum and rules
ICSID Convention arbitration; ICSID Arbitration Rules in force from 10 April 2006; place of proceeding Washington, D.C.; language Spanish; Peruvian law applies
Treaty
None. Contract-based: arbitration clause 18.12(b)(i) of the Concession Contract for Tramo 2 of IIRSA Centro (27 September 2010), and the Guarantee Contract of the same date
Tribunal
David J.A. Cairns (President), José María Alonso Puig, Yves Derains
Sector
Road infrastructure; toll-road concession
Outcome
Claims upheld in substantial part (27 November 2024). Peru must pay the toll revenue Deviandes could not collect at the Ticlio toll unit from 7 March 2018 onwards. The other damages claims and both of Peru's counterclaims were dismissed. The interest order was rectified on 19 March 2025.
Amount
Claimed: among other heads, S/ 107,037,635 in uncollected tolls from 21 August 2018 to 30 September 2021, later updated to S/ 153.47 million to 31 October 2022. Awarded: uncollected Ticlio tolls from 7 March 2018 to the Award and for the future, to be calculated by the parties under the Award's method, with simple interest at the Peruvian legal rate (excluding IGV). Costs: Peru pays 75%, namely USD 219,612.65 towards the costs of the arbitration (total costs USD 878,450.59) and USD 2,709,539.24 towards Deviandes' legal and expert costs.

The dispute

Deviandes, formed by a Colombian-led consortium, holds a 25-year build-operate-transfer concession for about 370 km of Peru's Carretera Central. Addendum No. 2 of 12 January 2015 located a fourth toll unit at Ticlio, with a toll of USD 1.50, to start once the works were accepted. Peru appointed the works acceptance committees late. When Deviandes published the Ticlio tariff in February 2018, protests broke out; OSITRAN declared force majeure, and on 6 March 2018 the Ministry of Transport announced that the Ticlio toll would never be installed. Deviandes claimed that Peru breached the acceptance procedure, its duty under clause 9.1 to exhaust efforts to allow toll collection, and its duty under the same clause to bear the uncollected amounts once social resistance lasted more than six months. Peru objected to jurisdiction, invoked force majeure, a 90-day limit under clause 17.4 and excessive onerousness, and counterclaimed for unfinished bridge works and for termination of the contract.

Key holdings

  1. Jurisdiction upheld. Deviandes was under Colombian control when the contract was signed and when arbitration began, so it qualifies under Article 25(2)(b). The USD 10 million threshold in clause 18.12 applies to the total amount at stake, which may arise from one or several disputes. The clause 9.1 claim concerns a contractual, patrimonial obligation and is arbitrable, even though it touches on the State's public-order powers. Award ¶¶ 152, 161–162, 169–171
  2. Peru breached clause 6.21 by appointing the acceptance committees 71 days late. The breach caused no recoverable loss, because the Niño Costero storms would have delayed acceptance of the works anyway. The claim for lost Ticlio revenue from 28 May 2017 to 19 February 2018 was dismissed. Award ¶¶ 191, 206–209
  3. From 6 March 2018 Peru breached its clause 9.1 duty to exhaust efforts by abandoning attempts to make the Ticlio toll operable. Force majeure suspended only Deviandes' obligations, not Peru's. Because Peru abandoned the first obligation, it cannot rely on the six-month grace period, and its duty to bear the uncollected amounts took effect on 7 March 2018. Award ¶¶ 237, 243, 249–250
  4. The duty to bear the uncollected amounts is an unconditional, contingent non-financial guarantee. It is not limited in time by clause 17.4, is not extinguished under Civil Code Articles 1316 or 1431, and cannot be reduced for excessive onerousness under Article 1440, because the contract itself foresaw the protest risk. Peru must pay the amounts until it allows peaceful operation of the toll or the concession ends. Award ¶¶ 269, 272, 276–277, 284
  5. Quantum: the amounts are the full tariff, including IGV, applied to actual CIDATT traffic data, with the first tariff set as of 1 March 2018. No deductions are made for demand elasticity, income tax or saved operating costs. The separate claims for loss of concession value (based on a 9.28% WACC) and for increased project risk are in substance interest claims and were dismissed, as was the claim for the cost of extending the performance bond. Award ¶¶ 338, 343, 349, 354, 361–362, 390, 402–405, 415
  6. Peru's counterclaims were admissible, because the contract requires only one period of direct negotiation (trato directo), but both failed. The acceptance certificates conclusively show that the works complied with the contract, and OSITRAN's reports show that service levels were maintained. Peru cannot terminate the contract under Civil Code Article 1316 or clause 17.4, because only the concessionaire, as the party affected by the suspension, may invoke termination for force majeure. Award ¶¶ 437–438, 462, 475–476, 502–507
  7. Simple interest runs at the Peruvian legal rate from 7 March 2018 until payment. Under clause 18.13(e), costs were apportioned 75/25 against Peru. On rectification, the Tribunal held that interest must be calculated on the uncollected amounts excluding IGV; the parties share the costs of the rectification proceeding equally. Award ¶¶ 516, 531; Decision on Rectification ¶ 29

Procedural history

  1. 27 September 2010Concession Contract and Guarantee Contract signed between Peru (through the Ministry of Transport and Communications) and Deviandes.
  2. 12 January 2015Addendum No. 2 fixes the location of the fourth toll unit at Ticlio.
  3. 15 February 2018OSITRAN declares the protests against the Ticlio toll a force majeure event. On 6 March 2018 the Minister announces that the toll will not be installed.
  4. 6 June 2020Request for Arbitration received by ICSID; registered on 10 June 2020.
  5. 11 August 2020Tribunal constituted; the President was chosen through a strike-and-rank procedure.
  6. 7 October 2020Procedural Order No. 1 sets the rules and the procedural calendar.
  7. 20–24 June 2022Hearing on jurisdiction and merits at the World Bank in Washington, D.C. Examination of the damages experts was completed by video on 8 September 2022.
  8. 27 November 2024Award: claims upheld in substantial part; counterclaims dismissed.
  9. 19 March 2025Decision on Rectification, on Peru's request of 10 January 2025: IGV excluded from the base for interest.

Tribunal, counsel and experts

Decided by
For the claimant
King & Spalding LLP · Rosselló Abogados
For the respondent
Comisión Especial que Representa al Estado en Controversias Internacionales de Inversión, Ministerio de Economía y Finanzas · Foley Hoag LLP · Hernández & CÍA
Experts
José Antonio García (claimant) · Pedro L. Marín (claimant) · Luis Willumsen (claimant) · María Teresa Quiñones Alayza (claimant) · Juan F. Riveros (respondent) · Valeria Tyndall (respondent) · Mark Anderson (respondent) · Elise Salerno (respondent) · Emilio Linde-Arias (respondent) · Thomas Adler (respondent) · John (Jay) Evans (respondent) · Enrique Ferrando Gamarra (respondent)

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Keywords

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

Case ID
ICSID Case No. ARB/20/18
Country
Economic sector
Outcome
In favour of Investor
Section