Please refer to the Company’s news releases for historic updates regarding the arbitration against the Republic of Peru.
30 June 2025
ICSID delivers the Tribunal’s Final Award ruling:
Award critical points:
602. The Tribunal accordingly decides that the Claimant is entitled to compensation in the amount of US$40.4 million, plus interest to the date of payment.
603. In its final submission, its Post-Hearing Submission, the Claimant requested an award of interest at the rate of LIBOR +4% from 26 August 2019 until 30 June 2023 and UST +5% from 1 July 2023 to the date of payment.
606. The Tribunal decides that the principal amount US$40.4 million due the Claimant shall bear interest at the rate of LIBOR +4% from 26 August 2019 until 30 June 2023 and at the rate of UST+5% from 1 July 2023 to the date of payment, compounded annually.
Costs:
630. Accordingly, the Tribunal decides that the Respondent shall reimburse the Claimant US$4,215,956.42, which is the total of adding:
(i) US$ 636,678.37 (on account of the expended portion of the Claimant’s advance payments to ICSID to cover the Costs of the Proceeding) (supra, paragraph 629); and
(ii) US$ 3,579,278.05 (on account of the Claimant’s legal fees and other expenses)
Award:
631. For the reasons set forth above, the Tribunal decides as follows:
(i) The Centre has jurisdiction and the Tribunal competence over the Claimant’s claims.
(ii) The conduct of Parán Community and of its members when acting on behalf of the Community is attributable to the Respondent.
(iii) The Respondent failed to accord the Claimant’s investment full protection and security in breach of Article 805 of the FTA.
(iv) The Respondent failed to accord the Claimant’s investment fair and equable treatment in breach of Article 805 of the FTA.
(v) The Respondent expropriated the Claimant’s investment in violation of Article 812 of the FTA.
(vi) The Claimant’s claim for failure to accord most-favored-nation treatment is dismissed as moot.
(vii) The Respondent shall compensate the Claimant in the amount of US$40.4 million plus interest thereon compounded annually at the rate of LIBOR +4% from 26 August 2019 until 30 June 2023 and at the rate of UST +5% from 1 July 2023 to the date of payment.
(viii) The Respondent shall fully compensate the Claimant for its costs and expenses in the amount of US $4,215,956.42, with compound interest at UST + 5% from the date of this Award to the date of final payment.
DISTRIBUTION OF AWARD PROCEEDS WHEN RECEIVED
Upon receipt of the Award, the first moneys out will go to our funding partner, Bench Walk LP. They took the risk, put the money up and get the first slice of the pie. By far the largest percentage of the Award will be distributed to holders of Contingent Value Rights (CVR’s).
As announced by the Company on May 3, 2022 (see https://lupakagold.com/news/lupaka-to-issue-contingent-value-rights-and-consolidate-its-common-shares/) , each shareholder of record as of May 18, 2022 (the “Record Date”) would receive a Contingent Value Right (“CVR”), which was completed on or about June 7, 2022, with 160,277,702 CVR’s being issued by the Company’s transfer agent (Computershare Trust Company of Canada).
Each CVR entitles the holder to receive a pro rata portion of any net amount (“CVR Payment”) available for distribution if the Company receives a cash award in the Company’s ongoing arbitration proceedings with the Republic of Peru (the “Arbitration”).
The CVR Payment will be calculated by deducting from the Award proceeds certain amounts, including the fees of the Company’s Arbitration funder (Bench Walk Advisors (www.benchwalk.com), legal counsel (www.lalive.law), accrued payables, the costs of any CVR distribution(s), withholding and distribution tax costs, and up to C$8 million to be retained by the Company for working capital and other corporate purposes.
The Company anticipates issuing the CVR Payments by way of a one-time special dividend to CVR holders. The CVRs are governed by the terms of an indenture between the Company and Computershare Trust.
The issuance of the CVRs by the Company was done to crystallize the entitlement of shareholders in place when the Company lost its Invicta Project to a portion of any Arbitration award received by the Company, and prevent dilution of this entitlement through future share consolidation(s) or issuances of the Company.
NEXT STEP(S)
Lupaka’s next step is to formally request payment from Peru. This is underway.
RELATED ARTICLE(S)
From: Digital Journal of Mining and Energy
www: LUPAKA WEBSITE / PROJECTS / ARBITRATION 3 July 2024 (https://www.dipromin.com/noticias/mineria/lupaka-gold-gana-arbitraje-contra-peru-por-65-millones-y-sus-acciones-se-disparan/)
“……..In November 2020, Lupaka filed a lawsuit with ICSID, alleging that the Peruvian government supported the community that blocked the project, violating the Canada-Peru Free Trade Agreement. It requested more than $100 million in compensation. Now, the court ruling determines that the state must pay $65 million, although Lupaka warns that payment will not be immediate and that there may still be legal proceedings before receiving the amount.
With the final ruling, the enforcement phase begins, during which the mining company may demand payment of the award. However, Peru could file appeals or use diplomatic mechanisms to delay actual collection, which will also depend on political agreements and guarantees to protect Peruvian assets. If Lupaka receives payment, its financial balance will be strengthened, which could boost the reactivation of projects in both Peru and Canada.
This case sets an important precedent for the international mining industry, sending a clear message about legal protection for foreign investment. Although the legal process is not completely closed, the victory represents a significant advance in the credibility and institutional support the sector requires to operate in complex environments.
Furthermore, the ruling affects communities beyond Lupaka, alerting local authorities and communities to the legal and economic consequences of blockades of mining projects. For investors, it reaffirms that a solid legal framework is essential to address operational risks. In the region, this ruling could motivate a review of strategies for managing community conflicts, promoting effective consultations, sustainable agreements, and greater legal certainty for future investments.”
