Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID.

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II. ADDITIONAL CLAIMS

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5. As a result of Peru's additional breaches of the Stability Agreement and international law following the submission of the Notice of Arbitration, Freeport presents the following additional claims for adjudication in this arbitration:

a. Peru breached the Stability Agreement by unlawfully imposing on SMCV (i) the 2013 Income Tax Assessment, including related penalties and interest, to the extent that they arose from Peru's position that SMCV was not entitled to stability for activities related to the Concentrator; and (ii) the 2013 Additional Income Tax Assessment and related interest. Under the Stability Agreement, SMCV was entitled to stability for all operations within its Mining Unit, consisting of its Mining Concession and Beneficiation Concession. The Concentrator forms part of SMCV's Mining Unit and therefore is entitled to stability. The assessments in question are inconsistent with the stabilized regime set forth in the Stability Agreement. Imposing these assessments on activities related to the Concentrator therefore breaches Peru's obligations under the Stability Agreement to guarantee fiscal and administrative stability for the entire Mining Unit.8 Freeport is entitled to submit these breaches of the Stability Agreement to arbitration pursuant to Article 10.16.1 of the TPA.9

b. Peru breached Article 10.5 (Minimum Standard of Treatment) of the TPA by arbitrarily failing to waive penalties and interest in relation to the 2013 Income Tax Assessment and the 2013 Additional Income Tax Assessment. Peru should have waived the penalties and interest because the correct interpretations of the provisions of Peruvian law upon which Peru based the 2013 Income Tax Assessment and the 2013 Additional Income Tax Assessment were subject to reasonable doubt. For that reason and others, Peru was required to waive penalties and interest on the assessments under both international and Peruvian law and its failure to do so resulted in a breach of Article 10.5 of the TPA."10

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V. REQUESTED RELIEF

10. Freeport incorporates by reference the Request for Relief contained in the Notice of Arbitration.

11. Freeport reserves its rights to further amend or supplement the Notice of Arbitration, including the requested relief and the amount claimed, and to seek relief for additional breaches arising from Peru's past, current, or future conduct.

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Footnotes omitted