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US company battles Nicaragua in arbitration tribunal

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Havana Times | 6 July 2024

US company battles Nicaragua in arbitration tribunal

By Ivan Olivares (Confidencial)

HAVANA TIMES – Beginning July 3, a three-member arbitral tribunal in Washington is considering the Colorado-based Riverside Coffee Company’s claim for damages against the Nicaraguan government’s Ministry of Promotion, Industry and Commerce. The company is asking for US $689.1 million dollars to compensate the 2018 takeover of their former property, the Santa Fe Hacienda, located in San Rafael del Norte, in Jinotega department. According to the company, the invasion caused the destruction of thousands of avocado, walnut and other trees.

The property was invaded by armed men in the context of the 2018 protests. While the Riverside plaintiffs allege these occupiers were sent or at least protected by the government, the defense team argues that they were former “Contras” with a long-standing territorial dispute, and that the government did everything possible to rectify the situation. The other chief point of conflict is the actual value of the Riverside Company’s losses, as the trees were not yet producing.

On August 28, 2020, Attorney Barry Appleton, of the law firm Appleton & Associates, based in Canada, sent a letter to the Nicaraguan Ministry in the name of Riverside Coffee LLC. The letter invited the Nicaraguan government ministry to initiate “discussions and negotiations,” with the aim of reaching a settlement. At that time, attorneys for the coffee company estimated the losses as surpassing US $580 million dollars, a total that could rise by over a hundred million dollars more, taking into account other damages.

Meanwhile, the Nicaraguan government hired the prestigious US law firm Baker & Hostetler to represent them.

During the hearing held on Wednesday, July 3, which was livestreamed on the CIADI website, the defense lawyer tried to reinforce the Nicaraguan government’s arguments by highlighting contradictions in the testimony of engineer Luis Adolfo Gutierrez Cruz, former administrator of Hacienda Santa Fe, which was owned by the Inagrosa company (of which Riverside Coffee LLC is the majority owner).

Among other things, the documents presented on behalf of the Nicaraguan government shed doubt on the plaintiff’s estimate of losses, questioning whether the Inagrosa Company had the necessary permits for importing the avocado seeds that it would use in its nurseries; whether there were enough hydric resources to irrigate the entire property; and whether in fact they could succeed in convincing the US Animal and Plant Health Inspection Services to authorize the importation of their avocados.

On the other side, in addition to repeating previous declarations already presented to the tribunal, Luis Adolfo Gutierrez reiterated that the invaders – who he claimed had been authorized by Leonidas Centeno, long-time FSLN mayor of Jinotega – stole agricultural equipment and machinery, computers, an automobile, two tractors, an electric generator, a water pump and a coffee pulping machine (without the motor) among other property.

They also reportedly cut down the forests to extract the best timber, and destroyed up to 16,000 Hass avocado trees and some 16,000 walnut trees, as well as the bean plants that had been planted among the avocado trees.

Initial payment of US $150,000

The hearing was held at the headquarters of the International Centre for Settlement of Investment Disputes (ICSID), an entity attached to the World Bank Group. The arbitration was ordered after multiple arguments had been presented by both litigants, each trying to discredit the arguments and evidence of the other party.

The ICSID Arbitral Tribunal is presided over by independent Finnish arbitrator Veijo Heiskanen, who currently heads the Geneva Bar Association. The other two members are Belgian native Philippe Couvreur, who works in the Netherlands and was selected by the Nicaraguan government; and Lucy Greenwood, an international commercial arbitrator from Great Britain, who was chosen by the plaintiffs. Before arriving at the arbitration process, the ICSID had issued eleven procedural orders over a two-year period, in response to objections raised by both sides.

The lawyers hired by Nicaragua initially argued the lack of ICSID jurisdiction, as well as the lack of relevance of the United States-Central America-Dominican Republic Free Trade Agreement (DR-Cafta) in the matter. In the end, however, they paid the initial US$150,000 that both claimants had to deliver to the tribunal to meet the initial expenses and initiate the proceedings.

In an apparent attempt to give the image of a done deal, in 2021, the dictatorship of Daniel Ortega and Rosario Murillo ordered their National Forestry Institute to create a community nursery in part of the invaded property. This project was inaugurated in April of that year, as evidenced by an article that appeared on the Channel 13 Viva Nicaragua website.

The hearings of the arbitral tribunal are expected to continue until at least July 12. Afterwards, the tribunal should issue a resolution rejecting or admitting, partially or totally, the allegations of both parties. Along with this it will determine whether to impose payment of some quantity, as well as the distribution of the costs of the proceedings themselves.

 source: Havana Times