Brookfield Initiates US$2.7 Billion Arbitration Against Peru Over Toll Roads

Brookfield Asset Management is suing Peru for US$2.7 billion due to alleged unlawful expropriation of toll roads in Lima. This case stems from chronic disputes over toll collection rights, with the Peruvian city having previously refused to pay US$200 million in damages. The arbitration raises significant political stakes for Lima’s mayor ahead of future elections.

Brookfield Asset Management Inc. has initiated arbitration against the Peruvian government, alleging the illegal expropriation of toll roads it operates in Lima. This legal action, which signifies a considerable escalation in a long-standing conflict, seeks US$2.7 billion in damages, citing measures that impeded Brookfield’s toll collection efforts as violations of the free trade agreement between Peru and Canada.

This disagreement has developed over time, highlighted by the city of Lima’s previous refusal to pay US$200 million imposed by prior arbitration decisions. Brookfield’s statement emphasized the impact of ‘arbitrary actions’ by Lima and other governmental bodies on their operations. The city government counters that the toll setup was originally marred by corruption, casting doubt on Brookfield’s integrity despite the firm denying any involvement in illicit activities.

The ongoing arbitration may further complicate matters for Lima’s Mayor Rafael Lopez Aliaga, who has committed to abolishing Brookfield’s toll collections. As a conservative politician and former presidential candidate, he is under considerable pressure, especially ahead of the upcoming elections. The situation remains dynamic, intertwining legal, political, and economic implications, with both sides presenting their respective cases.

In summary, Brookfield Asset Management Inc. is pursuing a US$2.7 billion arbitration case against the Peruvian government over alleged illegal expropriation of toll roads in Lima. This situation reflects a complex history of conflict over toll collection rights, with the city of Lima facing previous arbitration penalties and ongoing accusations of corruption in the original concession. The outcome of this arbitration will likely influence municipal governance and upcoming electoral politics.

Original Source: financialpost.com