The British multinational HSBC denounces an “excessively unusual and unreasonable delay” by the Constitutional Chamber in resolving a lawsuit initiated in 2009.
Delaying a judicial response by the Constitutional Chamber in a court case could expose the country to an international lawsuit before the International Center for the Settlement of Investment Disputes (ICSID) of at least $ 49 million.
The British multinational bank HSBC, in its Latin American Holding (HLAH), through its legal representatives, sent on December 17, 2020 a letter to the President of the Republic, the Attorney General of the Republic and the President of the Supreme Court notifying a “controversy” that it results from a lawsuit with the Salvadoran company Ingeniero José Antonio Salaverría y Compañía (IJASAL) in which the bank states that they found “unusual and unreasonable delays” from 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 mutual promotion and protection of investments with the Government of the United Kingdom of Great Britain and Northern Ireland, abbreviated APPRI UK-El Salvador.
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“El Salvador has explicitly undertaken its international obligation to provide fair and equitable treatment in its territory to investors in the United Kingdom, including the obligation to protect them against 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 means that El Salvador will have to compensate HLAH with public funds for losses caused as a result of its conduct, ”the document states.
In the letter, the Bank notifies the authorities of this dispute and informs them that if it is not resolved within three months of the date of issue of the letter, the Bank will initiate proceedings before the International Dispute Settlement Center. Investment Related (ICSID) “without prior notice”.
“HLAH hopes that the Constitutional Chamber of the Supreme Court will soon resolve the appeal before it in connection with the controversy so that it is not necessary to appeal to ICSID. If the dispute is not resolved satisfactorily, HLAH will initiate appropriate arbitration, ”he warns.
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According to a chronological summary made by the bank, HSBC entered into a loan agreement in July 2007 with Ingeniero José Antonio Salaverría y Compañía, of Variable Capital. The loan was $ 2.1 million.
In June and October 2008, HSBC El Salvador sued IJASAL to collect the outstanding debt.
But later, IJASAL sued HSBC, claiming that the court proceedings had violated a new agreement. He claimed that HSBC should be ordered to pay $ 22.7 million in damages.
The lawsuit reached the Civil Chamber, which ruled in favor of IJASAL, ordering the payment of $ 49.3 million.
According to the summary of its complaint, HSBC was not entitled to participate in the discharge of its proceedings in the first instance.
The Bank points out that, in view of the violations of its fundamental rights, it has lodged an appeal for protection before the Constitutional Chamber to seek the revocation of the resolution of the Civil Chamber.
“The chamber takes between four and eight months to decide on the admissibility of these appeals,” the law firm says, however, the chamber is already 17 months late without ruling on the admissibility of amparo.
And, on the other hand, the execution process went very fast. “The first commercial court, responsible for execution, issued an act of seizure in just two months,” he says.
The constitutional chamber has not yet informed whether it has already admitted the process that the international financial institution claims has been stopped.