The arbitral tribunal in Gabriel Resources Ltd. and Gabriel Resources (Jersey) v. Romania (ICSID Case No. ARB/15/31) issued its award on 8 March 2024.
In a majority decision, the tribunal rejected the entirety of the claimants’ claims on the merits and awarded a substantial part of Romania’s arbitration costs.
The tribunal was composed of Professor Pierre Tercier (the president of the Tribunal), Dr Horacio A. Grigera Naón and Professor Zachary Douglas.
This decision brings an end to arbitration proceedings that were initiated by Gabriel Resources in July 2015. In the course of the arbitration, the parties exchanged over 25 submissions and attended two main hearings, one between 2 and 13 December 2019, which dealt with liability, and between 28 September and 4 October 2020, which focused on technical and quantum issues.
Gabriel Resources alleged in the arbitration that Romania had breached the Canada-Romania bilateral investment treaty and the United Kingdom-Romania bilateral investment treaty, including the obligation not to expropriate investments without compensation. Gabriel Resources claimed in total approximately USD 6.7 billion, including interest.
In response, Romania argued that Rosia Montana Gold Corporation, the joint venture between Gabriel Resources and the Romanian State company Minvest, had failed to meet the permitting requirements, largely as a consequence of its failure to secure a social license for the mining project.
The tribunal considered the numerous environmental, social, cultural and economic challenges facing the mining project, finding that Romanian authorities had conducted “their regulatory mandate as best they could in the challenging circumstances.”
Having rejected Gabriel Resources’ claim that Romania had breached the two bilateral investment treaties, the tribunal did not proceed to examine the parties’ arguments on the quantum of damages.
The award will be published on the website of the International Centre for Settlement of Investment Disputes, a World Bank facility, once confidential information has been redacted from the award.
Romania was represented in the arbitration by the consortium of LALIVE and Leaua Damcali Deaconu Paunescu (LDDP). The LALIVE team was led by Dr Veijo Heiskanen, Matthias Scherer, Lorraine de Germiny and Noradèle Radjai Other members of the team included Christophe Guibert de Bruet, David Bonifacio, Emilie McConaughey and Baptiste Rigaudeau. The LDDP team was led by Prof. Crenguta Leaua and included Prof. Stefan Deaconu, Andreea Simulescu, Liliana Deaconescu, Andra Soare-Filatov, Corina Tanase, Aurora Damcali and Marius Grigorescu. The team included temporarily also Mihaela Maravela and Andreea Piturca.
Commenting the outcome, Prof. Leaua declares: “ The Romanian Government faced, over the last decades, a very complex situation as far as the Rosia Montana project is concerned. Attention had to be given both to the socio-economic development of the area and to the protection of the environment and to the observance of all the administrative procedures required by law for such a project. Constant efforts were made to navigate this complexity and to respect both the rights of the investor and of the citizens of Romania. We are pleased to see that the ICSID arbitral tribunal understood the situation and the arguments we presented in defence of Romania, and took a decision that confirms that Romania complied with its obligations towards the foreign investor under the bilateral investment treaties. We are grateful to all representatives of state institutions who helped us to collect the relevant data, to those who appeared as witnesses, as well as to the technical and legal experts, all enabling us to properly present the factual situation to the tribunal. We are proud and happy that, at the end of almost 9 years of arbitration, as a result of this immense team effort, we were able to allow Romanian citizens to avoid a budgetary burden of over USD 6 billion. “
Dr Heiskanen says: “Justice prevailed. This one is for the many Romanian civil servants for their unfailing support and hard work, and for the people of Rosia Montana; we were honored to be in their service.”. “A honor it was indeed- adds Matthias Scherer – and a great satisfaction to see that Romania can now assign funds to more sustainable and pressing matters than to a USD 6 billion claim of a foreign investor.”
LALIVE and LDDP previously helped Romania secure victories in five earlier investment treaty arbitrations, including Rompetrol v Romania and Micula et al. v Romania, defeating claims in excess of EUR 3 billion against Romania.
