CAFTA

The US-Dominican Republic–Central America Free Trade Agreement (CAFTA-DR or CAFTA for short) was signed in 2004. It encompasses the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The investor-state dispute settlement (ISDS) mechanism specified in CAFTA has provided US companies privileged means to challenge national laws and claim millions of US dollars in compensation in Central America.

As of end of 2019, CAFTA was invoked in 11 cases.

The most well-known cases include:

TCW (US) vs. The Dominican Republic: case settled in 2009 for US$26.5 million to the investor, an investment management corporation.

Railroad Development Corporation (US) vs. Guatemala: US$18.6 million awarded in 2012 to the investor in a dispute over a railroad contract.

Pac Rim Cayman LLC (US) vs. El Salvador: In 2008, El Salvador denied a mining permit to Pac Rim (now OceanaGold) due to environmental concerns, and notably the impact on water resources. In 2012, the arbitral tribunal dismissed jurisdiction over the CAFTA claims but assumed jurisdiction of the claims under the domestic investment law. In October 2016, the tribunal decided that the company’s case was without merit.

Photo: Danny Hammontree / CC BY-NC-ND 2.0

(March 2020)

Public Seminar | 18-Mar-2025
How an unregulated techno-utopia came into existence and continues to sabotage a nation’s sovereignty.
CIAR Global | 5-Mar-2025
El tribunal ha concluido que los recursos locales que Honduras alegaba que deberían haber interpuesto las demandantes habrían sido inútiles.
CIAR Global | 27-Jan-2025
La demandante reclama un monto de 130 millones USD en concepto de daños compensatorios, más los intereses y honorarios legales correspondientes.
Reuters | 16-Jan-2025
A bipartisan group of US senators called on US Trade Representative to stop negotiations with Mexico, Canada and Colombia that they say would weaken investor protections in some US free trade deals during the Biden administration’s final days.
CIAR Global | 9-Dec-2024
La compañía con sede en Guatemala Fibranet y su subsidiaria Cablefrecuencias enviaron una notificación de intención de recurrir a arbitraje internacional a El Salvador, a través de la firma internacional Eversheds Sutherland, respecto a sus inversiones en el sector de las telecomunicaciones.
Inside Climate News | 17-Sep-2024
One of Latin America’s poorest countries faces a wave of claims from foreign investors seeking billions of dollars. Chief among them is an American company looking to build a semi-autonomous “startup city.”
ISDS América Latina - TNI | 14-Sep-2024
En 2023 y 2024 Honduras ha recibido el total de diecinueve demandas en el arbitraje internacional por parte de inversionistas extranjeros y nacionales. Solamente entre 2023 y 2024 (hasta agosto) recibió catorce demandas en el Centro Internacional de Arreglo de Diferencias sobre Inversiones (CIADI), del Banco Mundial.
New York Times | 29-Aug-2024
The dream of Próspera, founded by a US corporation off the coast of Honduras, was to escape government control. The Honduran government wants it gone but Próspera filed an astronomical $10.775 billion lawsuit against the state.
CIAR Global | 9-Aug-2024
Honduras ha recibido dos nuevas demandas de arbitraje ante el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI) de dos inversores en energías renovables.
The Jordan Times | 18-Jul-2024
Imagine a scenario where a private company effectively creates and controls its own jurisdiction within a sovereign country. This company introduces its own currency, enacts laws, and establishes courts, prisons, police forces and even intelligence services.