FERRERE Ecuador successfully represented ELIPE S.A., a subsidiary of the Toronto based gold mining company CORE GOLD, on a contentious administrative claim against the Ministry of Mining and the Attorney General’s Office.
The purpose of the claim was to recover a gold concession area –a relevant asset– located at the Cordillera del Condor, in a very prospective area near major world-class gold deposits, on which the Ministry of Mining issued a caducity resolution to end ELIPE’s exploitation license.
FERRERE conducted a strategic litigation alleging, on the one hand, the illegality of the caducity resolution due to violation of due process during the administrative procedure and, on the other hand, force majeure due to illegal miners in the area, which prevented the mining company from exercising its rights under the license.
The strong evidence and arguments presented by FERRERE led the Contentious Administrative Court of Guayaquil to accept ELIPE’s claim and to declare annulment of the caducity resolution, returning the gold concession to ELIPE. In addition, the Court recognized the force majeure event that affected ELIPE. This case has no precedent in Ecuador and is of utmost importance among mining investors.
“This judgment undoubtedly marks a relevant judicial precedent for Ecuadorian mining law. The Court has determined the circumstances in which mining companies would face force majeure under our legislation, the guarantees the State must provide, and what the legal effects are for the legitimate holders of mining concessions regarding invasions by illegal miners,” said Alvaro Ordóñez of counsel director at Ferrere.
Participating on behalf of FERRERE were counsels Luis Carlos Fernández and Álvaro Ordoñez, along with senior associates Esteban Baquero and Emilio Aguayo.