Quadrant’s Damages Expert Testifies in Bolivian Mineral Extraction and Processing Arbitration

Quadrant’s expert, Dr. Daniel Flores was retained by the Plurinational State of Bolivia (“Respondent”) as a quantum expert in an arbitration initiated by Quiborax S.A. and Non-Metallic Minerals S.A. (“Claimants”) under the 1994 Bolivia-Chile Bilateral Investment Treaty and the ICSID rules (ICSID Case No. ARB/06/2).   This dispute arose from Respondent’s expropriation of a mining concession focused primarily on the extraction of the mineral, Ulexite, as well as refining of boric acid.

Claimants sought damages of approximately US$ 147 million using the Lost Profits and Discounted Cash Flow (“DCF”) methods.  The mining concession operated for 2.5 years as of the date of the breach and had defined mineral reserves.  Dr. Flores testified that Claimants’ DCF model required numerous corrections including adjustments to extractable mineral, production rates and sales volumes, prices, costs, and the applicable discount rate.  

The Tribunal (President: Prof. Gabrielle Kaufmann-Kohler, Co-arbitrators: the Hon. Marc Lalonde, P.C., O.C., Q.C. and Prof. Brigitte Stern) found Claimants’ investment was expropriated and awarded US$ 48 million based on lost profits through the date of award and DCF value thereafter.

Respondent was represented by counsel who were then at Dechert LLP and are now at Wordstone Dispute Resolution, Gomm & Smith, and the Ministerio para la Defensa Legal del Estado.  Dr. Flores was supported by a Quadrant team that included Ivan Vazquez.

Sources: ICSID ; Italaw ; Award