The British multinational company HSBC denounces an “excessively unusual and unreasonable delay” of the Constitutional Chamber to resolve a lawsuit initiated in 2009.
The delay of a judicial response by the Constitutional Court in a court case could expose the country to an international lawsuit before the International Center for Settlement of Investment Disputes (ICSID) of no less than $ 49 million.
The British multinational bank HSBC, if Holding of Latin America (HLAH), through its legal representatives, sent on December 17, 2020 a letter addressed to the President of the Republic, the Attorney General of the Republic and the President of the Court Supreme Court of Justice in which they report on a “controversy” arising from a lawsuit with the Salvadoran company Engineer José Antonio Salaverría y Compañía (IJASAL) in which the bank states that they have found “unusual and unreasonable delays” by the Constitutional Chamber of the Supreme Court of Justice.
In the notification, the bank reminds the authorities that in 1999 the country signed an Agreement for the promotion and reciprocal protection of investments with the Government of the United Kingdom of Great Britain and Northern Ireland, abbreviated with the acronym APPRI UK- El Salvador.
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“El Salvador explicitly assumed the international obligation to grant fair and equitable treatment on its territory to investors from the United Kingdom, including the obligation to protect them from any arbitrary and discriminatory treatment,” the document states.
“The conduct of certain courts in El Salvador in this matter, including its highest judicial authority, constitutes a denial of justice to HLAH and constitutes unfair, unfair, arbitrary and discriminatory treatment by El Salvador. Violation of these international obligations will to say that El Salvador will have to repay HLAH with public funds for the losses caused as a result of its conduct, ”the document states.
In the letter, the Bank notifies the authorities of this dispute and warns them that if it is not resolved within three months from the date of issuance of the letter, the Bank will initiate proceedings before the International Center for Disputes. Settlement of Investment Disputes (ICSID) “without further notice”.
“HLAH hopes that the Constitutional Chamber of the Supreme Court will soon resolve the appeal before it related to the dispute so that it is not necessary to resort to CIADI. If the dispute is not resolved satisfactorily, HLAH will initiate the corresponding arbitration. “, warns.
the case
According to a chronological summary made by the bank, HSBC entered into a loan agreement in July 2007 with the company José Antonio Salaverría y Compañía, a company with variable capital. The loan was $ 2.1 million.
In June and October 2008 HSBC El Salvador sued IJASAL to collect the outstanding debt.
But IJASAL subsequently sued HSBC alleging that the court proceedings were in violation of a new agreement. With this alone HSBC was ordered to pay the sum of $ 22.7 million in damages.
The process reached the Civil Chamber which ruled in favor of IJASAL ordering to pay $ 49.3 million.
According to the summary of his complaint, in the process followed in the First Commercial Court, HSBC was not entitled to participate in the acquittal of positions.
The bank notes that in view of the allegations of violations of their fundamental rights, it filed an appeal for protection before the Constitutional Chamber to request that the decision be reversed by the Civil Chamber.
“The Chamber takes between four and eight months to decide on the admissibility of these appeals,” the law firm said, however, the Chamber already has a delay of 17 months without commenting on the admissibility of the shelter.
And on the other hand, the execution process has gone very fast. “The Mercantile Court of First Instance, responsible for the execution, issued a lien in just two months,” he notes.
The Constitutional Chamber has not yet been informed if it has already admitted the process that the international financial institution alleges has been stopped.