Brookfield Initiates $2.7 Billion Arbitration Against Peru Over Toll Dispute

Brookfield Asset Management Inc. has filed for $2.7 billion arbitration against Peru, alleging illegal expropriation of its toll roads in Lima. The conflict includes claims of arbitrary actions by the city government that obstruct toll collections. Additionally, Lima has countered with a lawsuit, alleging previous corruption regarding the toll concession. This situation places increased pressure on Mayor Lopez Aliaga amid his promise to end Brookfield’s toll collections.

Brookfield Asset Management Inc. is initiating arbitration proceedings against the government of Peru, alleging unlawful expropriation of several toll roads it operates in the capital city of Lima. This dispute, which revolves around the Rutas de Lima tolls, has escalated as Brookfield seeks $2.7 billion in damages, attributing its claims to actions taken by the city that impede toll collection. The arbitration is grounded in the free trade agreement between Peru and Canada.

The tension between Brookfield and the Lima city administration has been ongoing, and Brookfield contends that the city has implemented arbitrary measures that hinder its toll revenue. According to Brookfield, the city has previously been ordered to pay $200 million in prior arbitration and court cases but has declined to comply. In response, Lima has filed its own lawsuit in a U.S. federal court, alleging that the concession for the toll road was acquired through bribery, a claim Brookfield categorically denies.

This arbitration intensifies the pressure on Lima Mayor Rafael Lopez Aliaga, who has pledged to eliminate toll collections from Brookfield. Lopez Aliaga, a conservative politician and former presidential candidate, is perceived as a potential candidate for the upcoming elections. The outcome of this arbitration may have significant implications for both Brookfield and the city’s financial responsibilities.

In conclusion, Brookfield Asset Management’s arbitration against Peru signifies a critical escalation in a protracted dispute regarding the operation of toll roads in Lima. With a demand for $2.7 billion in damages and ongoing legal challenges, this matter poses challenges not only for Brookfield but also for the city administration, particularly Mayor Rafael Lopez Aliaga, who is facing intensified scrutiny as elections approach.

Original Source: financialpost.com