Crystallex International Corporation (TSX.V: KRY) welcomes the
Award released yesterday by the Additional Facility of the World Bank’s
International Centre for Settlement of Investment Disputes (“ICSID”) in
relation to its claims against the Bolivarian Republic of Venezuela
(“Venezuela”). The Tribunal awarded the company damages of US$1.202
Billion plus pre- and post-award interest due to Venezuela’s unfair and
inequitable treatment, and unlawful expropriation of Crystallex’s
investment in the Las Cristinas mining project.
Crystallex filed its Request for Arbitration before ICSID’s Additional
Facility on February 16, 2011 pursuant to the Agreement between the
Government of Canada and the Government of the Republic of Venezuela for
the Promotion and Protection of Investments (the “Treaty”).
The Award, which was rendered on April 4, 2016, upheld Crystallex’s
claims that Venezuela breached Articles II(2) and VII(1) of the Treaty
by failing to accord Crystallex’s investments in Venezuela fair and
equitable treatment and by unlawfully expropriating those investments.
As a result of these breaches, the Tribunal has ordered Venezuela to pay
damages currently amounting to US$1.386 billion, based on a value for
Crystallex’s investment in the Las Cristinas mine of US$1.202 billion on
13 April 2008 – the date when an environmental permit was denied by
Venezuela – together with pre- and post-award interest from that date.
Among other things, the Tribunal criticized Venezuela’s Ministry of the
Environment for its “arbitrary” and “non-transparent and inconsistent
conduct” in connection with its denial of an environmental permit. The
Tribunal stated that it “cannot but conclude that the Permit denial
letter and the Romero Report on which the first appears to be based are
so fundamentally deficient that, to the eyes of a reasonable third
person, they ‘surprise a sense of juridical propriety’…”. Venezuela, the
Tribunal concluded, “frustrated Crystallex’s legitimate expectations …,
engaged in arbitrary conduct in denying the Permit and rescinding the
[Contract it had signed with Crystallex], and committed several acts
lacking transparency and consistency.” The Tribunal therefore found that
Venezuela’s “overall conduct vis-à-vis Crystallex, thus violated the
[Treaty] standard … and caused all of the investments made by Crystallex
to become worthless.”
Robert Fung, Crystallex CEO commented: “On behalf of Crystallex’s board
of directors, management, employees and all of its stakeholders, we are
pleased that the Tribunal has recognized Venezuela’s unlawful
expropriation of the Company’s investment in the Las Cristinas mining
project. The company looks forward to collecting on the Award on behalf
of all of its stakeholders. We thank our stakeholders for their deep
understanding and support throughout this difficult and prolonged
process, and our legal team, led by Freshfields’ partner Nigel Blackaby.”
About Crystallex
Crystallex International Corporation is a Canadian based mining company,
with a history of acquiring, exploring, developing and operating mining
projects. Crystallex has successfully operated an open pit mine in
Uruguay and developed and operated three gold mines in Venezuela. The
Company's principal asset is its international claim in relation to its
investment in the Las Cristinas gold project located in Bolivar State,
Venezuela.
For more information on the Company’s ICSID case visit: https://icsid.worldbank.org/apps/icsidweb/cases/Pages/casedetail.aspx?CaseNo=ARB%28AF%29/11/2
For more information on the Company’s CCAA Proceedings visit: www.ey.com/ca/crystallex
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain statements
included in this press release, constitute forward-looking statements.
The words "believe," "expect," "anticipate," "contemplate," "target,"
"plan," "intends," "continue," "budget," "estimate," "may," and similar
expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by the Company, are
inherently subject to significant business, economic, financial and
political uncertainties and contingencies. Many factors could cause the
Company's actual results to differ materially from those expressed or
implied in any forward-looking statements made by, or on behalf of, the
Company. Investors are cautioned that forward-looking statements are not
guarantees of future performance and, accordingly, investors are
cautioned not to put undue reliance on forward-looking statements due to
the inherent uncertainty therein. For more information on the risks,
uncertainties and assumptions that could cause the Company's actual
results to differ from current expectations, please refer to the
Company's public filings available under the Company's profile on SEDAR
at www.sedar.com
and the documents relating to the CCAA proceedings available on the
Monitor's website. Forward-looking statements are made as of the date of
this press release and the Company disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or results or otherwise, except as
required by applicable law.
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