TORONTO--(BUSINESS WIRE)--Crystallex International Corporation (TSX.V: KRY) welcomes the Award released yesterday by the Additional Facility of the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) in relation to its claims against the Bolivarian Republic of Venezuela (“Venezuela”). The Tribunal awarded the company damages of US$1.202 Billion plus pre- and post-award interest due to Venezuela’s unfair and inequitable treatment, and unlawful expropriation of Crystallex’s investment in the Las Cristinas mining project.
Crystallex filed its Request for Arbitration before ICSID’s Additional Facility on February 16, 2011 pursuant to the Agreement between the Government of Canada and the Government of the Republic of Venezuela for the Promotion and Protection of Investments (the “Treaty”).
The Award, which was rendered on April 4, 2016, upheld Crystallex’s claims that Venezuela breached Articles II(2) and VII(1) of the Treaty by failing to accord Crystallex’s investments in Venezuela fair and equitable treatment and by unlawfully expropriating those investments.
As a result of these breaches, the Tribunal has ordered Venezuela to pay damages currently amounting to US$1.386 billion, based on a value for Crystallex’s investment in the Las Cristinas mine of US$1.202 billion on 13 April 2008 – the date when an environmental permit was denied by Venezuela – together with pre- and post-award interest from that date.
Among other things, the Tribunal criticized Venezuela’s Ministry of the Environment for its “arbitrary” and “non-transparent and inconsistent conduct” in connection with its denial of an environmental permit. The Tribunal stated that it “cannot but conclude that the Permit denial letter and the Romero Report on which the first appears to be based are so fundamentally deficient that, to the eyes of a reasonable third person, they ‘surprise a sense of juridical propriety’…”. Venezuela, the Tribunal concluded, “frustrated Crystallex’s legitimate expectations …, engaged in arbitrary conduct in denying the Permit and rescinding the [Contract it had signed with Crystallex], and committed several acts lacking transparency and consistency.” The Tribunal therefore found that Venezuela’s “overall conduct vis-à-vis Crystallex, thus violated the [Treaty] standard … and caused all of the investments made by Crystallex to become worthless.”
Robert Fung, Crystallex CEO commented: “On behalf of Crystallex’s board of directors, management, employees and all of its stakeholders, we are pleased that the Tribunal has recognized Venezuela’s unlawful expropriation of the Company’s investment in the Las Cristinas mining project. The company looks forward to collecting on the Award on behalf of all of its stakeholders. We thank our stakeholders for their deep understanding and support throughout this difficult and prolonged process, and our legal team, led by Freshfields’ partner Nigel Blackaby.”
Crystallex International Corporation is a Canadian based mining company, with a history of acquiring, exploring, developing and operating mining projects. Crystallex has successfully operated an open pit mine in Uruguay and developed and operated three gold mines in Venezuela. The Company's principal asset is its international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela.
For more information on the Company’s ICSID case visit: https://icsid.worldbank.org/apps/icsidweb/cases/Pages/casedetail.aspx?CaseNo=ARB%28AF%29/11/2
For more information on the Company’s CCAA Proceedings visit: www.ey.com/ca/crystallex
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain statements included in this press release, constitute forward-looking statements. The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, financial and political uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the Company's public filings available under the Company's profile on SEDAR at www.sedar.com and the documents relating to the CCAA proceedings available on the Monitor's website. Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable law.