Brookfield Asset Management has filed for $2.7 billion in arbitration against Peru for allegedly expropriating toll roads. The dispute arises under a free trade agreement and reflects a long-standing conflict with the Lima city government. Previous rulings have ordered Lima to pay Brookfield $200 million, but compliance has been absent, leading to counterclaims of bribery.
Brookfield Asset Management Inc. has initiated arbitration against the Republic of Peru, claiming illegal expropriation of toll roads within the capital, Lima. This arbitration seeks $2.7 billion in damages, primarily due to actions taken by the Lima city government that hinder Brookfield from collecting toll payments. The dispute has risen under the protections afforded by the free trade agreement between Peru and Canada, marking a significant escalation in a long-standing conflict.
The history of this dispute includes previous arbitration and court decisions which resulted in the city of Lima being ordered to pay a total of $200 million, yet compliance with these orders has been lacking. In response, Lima’s city government has filed a countersuit in the United States, accusing Brookfield of acquiring the toll road concession through corrupt practices. Brookfield has strongly denied these allegations, asserting that their ownership has operated above board.
Mayor Rafael Lopez Aliaga’s administration is particularly pressurized by this arbitration, as he has publicly committed to halting Brookfield’s toll collections. Lopez Aliaga, identified as a conservative politician and a former presidential candidate, is expected to run for election once more next year. This situation underscores the complexity of the existing tensions between foreign investment interests and local governance in Peru.
In conclusion, Brookfield Asset Management has escalated its dispute with the Peruvian government to arbitration, seeking $2.7 billion in damages over the alleged illegal expropriation of toll roads. The ongoing conflict reflects broader tensions surrounding foreign investments in local infrastructure, with both sides preparing for continued legal battles amidst accusations of corruption and governance challenges.
Original Source: financialpost.com
