The Renco Group, Inc. v. The Republic of Peru | La República del Perú

At a glance

Parties

The Renco Group, Inc. (USA) v. the Republic of Peru

Case no.

PCA Case No. 2019-46 (Renco II, the "Treaty Case")

Forum and rules

UNCITRAL Arbitration Rules 2013, administered by the PCA; seat Paris

Treaty

Peru–United States Trade Promotion Agreement of 12 April 2006 (in force 1 February 2009)

Tribunal

Judge Bruno Simma (Presiding Arbitrator), Prof. Horacio A. Grigera Naón, Mr. J. Christopher Thomas

Sector

Mining; metal smelting and refining (La Oroya complex)

Outcome

Peru's expedited temporal objections were dismissed on 30 June 2020; J. Christopher Thomas signed subject to a dissenting opinion. The merits hearing took place in March 2024. The published documents contain no final award.

The dispute

Renco, a New York company, claims through its investment in Doe Run Peru S.R.LTDA (DRP). In 1997 DRP acquired the La Oroya smelting and refining complex when Peru privatised it. The purchase came with an environmental programme (PAMA) of sixteen projects to be completed within ten years. Renco alleges that Peru breached fair and equitable treatment (Article 10.5), expropriated its investment indirectly (Article 10.7) and denied it justice. It points to four sets of measures: the Ministry of Energy and Mines (MEM) refused on 10 March 2009 to extend the deadline for the last PAMA project and later undermined an extension granted by statute; officials ran a public "smear campaign"; MEM asserted a US$ 163 million credit in DRP's bankruptcy, which led to DRP's liquidation; and on 3 November 2015 the Supreme Court dismissed DRP's final appeal against that credit. An earlier claim (Renco I, ICSID Case No. UNCT/13/1) had been dismissed in 2016 because Renco's waiver was defective. Peru objected that the claims were time-barred under the Treaty's three-year limitation period (Article 10.18.1) and fell outside its temporal scope (Article 10.1.3). It denies the claims on the merits.

Key holdings

1. The three-year limitation period began to run on 10 March 2009, the date of the earliest alleged breach. Renco's notices of arbitration in Renco I (4 April and 9 August 2011) were filed within three years of that date. The Tribunal held that if this first alleged breach is not time-barred, no later breach is either. Decision on Expedited Preliminary Objections ¶¶ 206–208
2. It is a general principle of law, under Article 38(1)(c) of the ICJ Statute, that limitation periods are suspended while judicial or arbitral proceedings are pending. The Tribunal found this principle in national legal systems, in early arbitral decisions, in the 1974 UN Limitation Convention and in the UNIDROIT Principles. ¶¶ 212–217
3. A claim is "submitted to arbitration" under Article 10.16.4 once a notice of arbitration and statement of claim meeting the UNCITRAL Rules is received. That submission stops the limitation period from running, even if the waiver under Article 10.18.2 is defective. The Treaty does not exclude suspension as a lex specialis. A contrary reading would produce manifestly unreasonable results, for example after an award is annulled. ¶¶ 222–236
4. Renco I therefore suspended the limitation period, even though the waiver was held defective almost five years later. The parties had agreed to suspend the period after Renco I ended, and only three unsuspended days passed before this claim was filed. The claims are not time-barred. The Tribunal did not need to decide whether Peru's objection was an abuse of rights. ¶¶ 249–251
5. The Tribunal dismissed Peru's preliminary objections under Articles 10.1.3 and 10.18.1 and reserved costs for a later decision. J. Christopher Thomas signed subject to a dissenting opinion. ¶¶ 255–256
6. At the claimant's request, and over Peru's objection, the Tribunal split off quantum: the next phase would decide only jurisdiction and liability. The Tribunal found the jurisdiction and liability issues serious and substantial, and noted that splitting would limit the volume of evidence needed from the St. Louis lawsuits. Procedural Order No. 3 ¶ 2.2
7. The Tribunal struck paragraphs 4–27 of Renco's Rejoinder on Jurisdiction because they addressed liability on the fair and equitable treatment claim and answered no jurisdictional objection. It admitted paragraphs 28–29. Renco confirmed that it no longer pursued claims against Peru in the parallel Contract Case. Procedural Order No. 9 ¶¶ 2.5–2.13, 3.1–3.2

Procedural history

1. 12 August 2016Renco served notices of intent under the Treaty and under the 1997 Stock Transfer and Guaranty Agreements. Consultation and framework agreements followed, which suspended the limitation period until 20 October 2018.
2. 23 October 2018Notice of Arbitration and Statement of Claim filed.
3. 17 October 2019The parties appointed Judge Bruno Simma as presiding arbitrator. The case was coordinated with the Contract Case (PCA Case No. 2019-47), and on 3 December 2019 the parties agreed to PCA administration.
4. 3 February 2020Terms of Appointment and Procedural Order No. 1 issued; the seat was fixed in Paris.
5. 12–13 June 2020Hearing on the expedited preliminary objections, held by videoconference.
6. 30 June 2020Decision on Expedited Preliminary Objections dismissed Peru's temporal objections; J. Christopher Thomas dissented.
7. 17 September 2020Procedural Order No. 3 split off quantum into a separate phase.
8. 25 August 2022Procedural Order No. 7 decided the document production requests.
9. 5–15 March 2024Hearing on jurisdiction and merits held at ICSID, Washington, D.C., jointly with the Contract Case.
10. 5 August 2024Procedural Order No. 13 ruled on documents filed with the post-hearing briefs and on Peru's request to strike arguments; the request was rejected except for part of Renco's argument.

Tribunal, counsel and experts

Decided by

• Bruno Simma President — appointed by the parties jointly
• Horacio A. Grigera Naón Co-arbitrator — appointed by the claimant
• J. Christopher Thomas Co-arbitrator — appointed by the respondent (dissented on the Decision on Expedited Preliminary Objections)

For the claimant

King & Spalding LLP · Schiffer Hicks Johnson PLLC

For the respondent

White & Case LLP · Republic of Peru

Experts

Rosalind A. Schoof (claimant) · John A. Connor (claimant) · José Antonio Payet Puccio (claimant) · Daniel Schmerler (claimant) · Wim Dobbelaere (respondent) · Deborah M. Proctor (respondent) · Enrique Varsi Rospigliosi (respondent)

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Keywords

• La Oroya
• Doe Run Peru
• Peru–United States Trade Promotion Agreement
• statute of limitations
• Article 10.18.1
• suspension of limitation period
• defective waiver
• Renco I
• expedited preliminary objections
• Article 10.20.5
• general principles of law
• ratione temporis
• abuse of rights
• fair and equitable treatment
• indirect expropriation
• denial of justice
• PAMA
• smelter

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