Lawsuit Against El Salvador for Investment in LAGEO

The Italian consortium Enel has filed a case against the Salvadoran State with the ICSID over a dispute on equity interest in the geothermal plant.

Tuesday, August 13, 2013

The case was filed with the International Centre for Settlement of Investment Disputes (ICSID).

The lawsuit, according to the company, is due to the government trying to be more involved in LaGeo, and also because they believe they have been denied their legitimate rights.

Moreover, Enel fears losing the concession for the exploitation of geothermal resources, and that the government "could declare it null and leave its continuation up to the Legislative Assembly," noted an article in Elsalvador.com.



More on this topic

El Salvador: End of Legal Dispute with Enel Green Power

September 2015

The settlement was made through the purchase of the Salvadoran Government for $280 million stake in geothermal LaGeo which owns the Italian company.

From a statement issued by the Executive Hydroelectric Commission of the Lempa River:

While in El Salvador preparations are being made to celebrate the country's independence, in Washington representatives of the Salvadoran government and the Italian company ENEL GREEN POWER are putting and an end to a long running dispute. The agreement allows the Salvadoran State to recover the total shares of LaGeo that had been held by the Italian company.

El Salvador: ENEL Green Power Lawsuit Revived

July 2015

Despite the agreement signed last December, authorities from the CEL say it reserves the right to activate in civil courts processes to collect compensation for alleged damages.

After ten years of international litigation by the Italian company ENEL for control of the geothermal station Enel Green Power El Salvador, where the Salvadoran State had everything to lose, in December 2014 an agreement was signed at the International Centre for Settlement of Investment Disputes (ICSID) which stated in Article 3 that: "The parties (the Salvadoran State and Enel) have agreed as a condition non precedent of the effects of the Framework Agreement, the final and irrevocable extinction of the civil action of the crime involving Enel Green Power (EGP) and Enel Green Power in El Salvador criminal proceedings number 171-A-2-13 in the Seventh Court of Peace and 133-2013-12 in the Seventh Court of Instruction, both of San Salvador, that will be extended to all natural persons who are accused of crimes in the same instance ... ".

Extra Judicial Dialogue Between El Salvador and ENEL

November 2014

At the request of the parties, arbitration and dialogue has been suspended for 30 days in order to reach an agreement over the shareholding structure of the company LaGeo.

From a statement issued by the Government of El Salvador:

Talks to find solutions to disputes between the State of El Salvador and the Italian company ENEL Green Power, over the ownership structure of the company LAGEO SA, de CV, started today in Washington, DC, with a meeting taking place on the premises of the International Centre for Settlement of Investment Disputes (ICSID), which is the forum for arbitration and conciliation of the World Bank Group.

El Salvador: Favorable Ruling for Enel Green Power

September 2014

As expected, the French Supreme Court has ruled in favor of the Italian company, in its attempt to increase its stake in the geothermal station LaGeo.

In May 2011 the International Chamber of Commerce (ICC) recognized the right of Enel Green Power to increase their investments in geothermal energy in El Salvador and capitalize on these investments through the subscription of new shares in LaGeo.

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