Canadian mining company Edgewater has lost an international arbirtration claim for compensation for a goldmine in the province of A Coruña closed down by the Galician regional government in 2015.
In a decision issued earlier this month, a three-judge aribtration panel of the United Nations Commission on International Trade Law (UNCITRAL) in Paris ruled agains the Canadian mining company, which was seeking compensation for some 35 million dollars invested in the mining operation before the Galician regional Xunta government revoked its concession.
Activists in Galicia had long campaigned against the mining operation, citing damage to the environment and local communities in the municipality of Corcoesto from cyanide used in the mining operation to leach gold from surrounding rock, thereby releasing cyanide into local streams and underground water supply.
Both the Superior Court of Justice of Galicia and Spain’s Supreme Court had ruled in favour of the Galician regional government’s right to revoke the mining concession held by Edgewater subsidiary Corcoesto, S.A.
But because the Canadian mining company had incorporated its Spanish subsidiary via a Panamanian offshore tax haven, the company used a little-known treaty between Spain and Panama to launch an appeal of the Spanish court rulings in 2018 before the UNCITRAL arbitration court.
The UNCITRAL ruling upholds Spain’s ability to revoke the concessions of foreign-held mining operations, while at the same time is a relief for the Galician regional government. Had the Canadian mining company won the arbitration appeal, the Galician region would have been on the hook for 35 million of lost investment, plus damages and the Canadian mining giant’s court costs in the case.
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