Lupaka Gold Corp. v. Republic of Peru
ICSID · Investment (ICSID and treaty) · Peru · 30 Jun 2025
Why it matters
This award is significant because it clarifies the scope of state responsibility for the actions of local communities under investment treaties. The tribunal held that the conduct of the Parán Community and its members was attributable to Peru, establishing that states may be liable for failing to protect investments from non-state actors when they exercise effective control or fail to exercise due diligence. The case also provides guidance on the valuation of mining projects in the context of expropriation.
Summary
Lupaka Gold Corp., a Canadian mining company, invested in the Invicta gold-copper project in Peru. In 2016, the Rural Community of Parán began blockading the access road to the project, preventing Lupaka from conducting operations. Despite Lupaka's requests for assistance, Peruvian authorities failed to take effective action to remove the blockade. The blockade continued for years, effectively destroying the value of Lupaka's investment. Lupaka initiated ICSID arbitration under the Canada-Peru FTA, claiming breaches of full protection and security (FPS), fair and equitable treatment (FET), expropriation, and most-favored-nation (MFN) treatment. The Tribunal first addressed jurisdiction, rejecting Peru's objections that Lupaka had disposed of its investment before commencing arbitration and that it had failed to comply with a waiver requirement. On the merits, the Tribunal found that the conduct of the Parán Community was attributable to Peru because the community acted under the direction and control of the state, and because Peru failed to exercise due diligence to protect the investment. The Tribunal held that Peru breached FPS by not taking reasonable measures to prevent or end the blockade, breached FET by frustrating Lupaka's legitimate expectations, and expropriated the investment without compensation. The MFN claim was dismissed as moot. The Tribunal awarded Lupaka US$40.4 million in damages, calculated as the fair market value of the investment as of the valuation date (26 August 2019), plus interest. The Tribunal also ordered Peru to pay Lupaka's costs of US$4,215,956.42.
The detail
Parties: Lupaka Gold Corp. v. Republic of Peru
Case number: ICSID Case No. ARB/20/46
Outcome: The Tribunal found Peru liable for breaches of full protection and security, fair and equitable treatment, and expropriation under the Canada-Peru FTA, and awarded Lupaka US$40.4 million plus interest and costs.
Quantum: US$40.4 million
Applicable law: Canada-Peru Free Trade Agreement (FTA), ICSID Convention, ICSID Arbitration Rules (2006), international law
Issues in play: The case involved the collision between Peru's duty to provide full protection and security to foreign investments and its obligation to maintain public order, particularly regarding community protests that blocked access to Lupaka's mining project.
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