Canadian investors sue Costa Rica alleging failure to protect their farm

By Fernando Cabrera Diaz and Damon Vis-Dunbar
29 October 2008

A tribunal has been constituted in an arbitration that pits a group of Canadian investors against the government of Costa Rica. The claimants—Vancouver-based Quadrant Pacific Growth Fund L.P. and Conasco Holdings Inc—allege that Costa Rican authorities failed to protect their orange plantations from peasants who squatted on their land and sabotaged their operations.

The tribunal consists of Alejandro M. Garro, Bernardo M. Cremades (President) and Andreas F. Lowenfeld.

In their request for arbitration, the claimants complain that during 2003-2005, their property in Costa Rica was “invaded” by squatters who blocked access to the farm and intimidated employees. The Canadians accuse Costa Rican law enforcement agencies of failing to respond, despite repeated pleas for protection.

The farm operation had been dealt “a fatal blow” after “three years of upheaval,” said management of Quadrant Pacific Growth Fund in a note to its investors earlier this year.

In 2005, the families who had been expelled from the claimant’s farm protested outside the offices of the Costa Rican Agrarian Development Institute (IDA).

ITN spoke to IDA official Daniel Aries, who explained that the peasants had reached an agreement with the government, under which they would be re-located to another piece of land.  He said the IDA was currently in the process of buying land to place the remaining 14 members of the group.

Danelia Garciaz, one of the peasants who occupied the farm, said in an interview with ITN that they used what was then vacant land for the purposes of subsistence farming before being expelled three year later.

Quadrant Pacific Growth Fund L.P. and Conasco Holdings are alleging breaches of the fair and equitable treatment and the full protection and security provisions of the 1998 Canada-Costa Rica Foreign Investment Protection Agreement (FIPA), and say they are seeking at least US$ 20 million in damages.

The case was registered with the International Centre for the Settlement of Investment Disputes (ICSID) in March 2008.