Brookfield Initiates US$2.7 Billion Arbitration Against Peru Over Toll Roads
Brookfield Asset Management Inc. has filed a US$2.7 billion arbitration case against Peru, alleging illegal expropriation of toll roads in Lima. The firm claims the city’s actions have impeded its toll collection capabilities, based on the Peru-Canada free trade agreement. The dispute includes a previous obligation for Lima to pay US$200 million, and counterclaims of corruption related to the original toll road concession.
Brookfield Asset Management Inc. has initiated arbitration against the government of Peru, claiming the illegal expropriation of toll roads it operates in Lima. The firm is seeking US$2.7 billion in damages due to actions taken by the city government that hindered Brookfield’s ability to collect toll fees. This arbitration is based on the bilateral free trade agreement between Peru and Canada, highlighting the significance of this conflict.
The dispute has persisted for years, with Brookfield asserting in a recent statement that “arbitrary actions” by the city of Lima have hindered its operations. Previous arbitration orders had already required Lima to pay US$200 million, which the city has yet to settle. In response to Brookfield’s arbitration, Lima expressed regret over the situation and labeled the suspension of toll payments as “inhuman and harmful” to residents.
In a notable counterclaim, the city of Lima has filed a lawsuit in U.S. federal court, alleging that Brookfield acquired the toll road concession through corrupt practices, specifically referencing the previous ownership by Odebrecht, a company notorious for its bribery scandals across Latin America. Brookfield has categorically denied any wrongdoing since it acquired the toll company.
The ongoing arbitration is set to intensify pressure on Lima’s Mayor Rafael Lopez Aliaga, who has promised to abolish toll collections by Brookfield. Lopez Aliaga, known for his conservative stance, has also hinted at a potential run for the presidency in the upcoming election, adding a political dimension to the dispute.
In summary, Brookfield’s arbitration against Peru represents a significant escalation in a protracted conflict regarding toll road operations in Lima. The firm is pursuing substantial damages due to alleged illegal actions by the city government. With ongoing litigation and counterclaims, the situation reflects broader implications for local governance and corporate integrity, particularly concerning past corruption linked to the original toll road ownership.
Original Source: financialpost.com
