Update on Gabriel Resources vs. Romania

Aug 3, 2022 | News

3 August 2022: Miningwatch Romania reports that the Gabriel Resources vs. Romania ISDS (Investor State Dispute Settlement) arbitration procedure on the Rosia Montana mine proposal is nearing its end and that developments with material impact have arisen at the same time. 

In 2015 Gabriel Resources (GBU.V) initiated arbitration against Romania at the World Bank ICSID tribunal (International Centre for Settlement of Investment Disputes) for being unable to secure the ‘green light’ for its illegal and unpopular cyanide-based gold/silver open-cast mine at Rosia Montana, Romania. Strong local opposition to the 13Mt/a mine proposal has existed since 2000 due to the forced resettlement it has involved, and the mine’s social, environmental and heritage impact. From roughly 2007 onwards Romania’s government, a partner in the joint venture with Gabriel Resources (RMGC), was unable to proceed with permitting as NGOs, including the local opposition, annulled most of them in court. In 2013 Romania’s government tried to pass a special law classifying the mine as of overriding national interest, so as to avoid the need for permitting and to expropriate those refusing to leave. Romania’s public, which since long had been vocally opposed to the mine, took to the streets, unleashing what came to be known as ‘Romania’s autumn.’ Despite the huge protests the government tried passing the law behind closed doors on several occasions, but each time citizens were one step ahead. Eventually the special law was abandoned. In reaction Gabriel Resources initiated arbitral proceedings based on a UK-Romania business investment treaty, and is claiming up to $4.4bn in compensation.

According to Miningwatch Romania, Gabriel Resources Ltd. has not been updating its shareholders and and might have even misled the arbitration court.

One year ago Rosia Montana was declared a UNESCO World Heritage site. In response, Gabriel Resources requested time to submit additional information to the ICSID tribunal. On 29 October 2021 it submitted ‘new evidence‘. It argues that the UNESCO nomination further highlights that Gabriel Resources was expropriated. It substantiates this claim by referring to a decision by the Buzau Tribunal, Romania, of October 2020 which ruled that the archaeological discharge certificate for the Carnic mountain in Rosia Montana was legal. Gabriel also claims that the Buzau ruling is final and irrevocable.

An archaeological discharge certificate – ADC – is an administrative act which, when granted, makes a previously protected area available for ‘economic development’. The fate of Carnic, either as a mine pit or a monument, has been a central tension point as it is the richest deposit within Gabriel’s license but at the same time houses large networks of underground mine galleries dating from Roman times.

Miningwatch Romania appealed the Buzau decision (the court of appeal is a higher instance, meaning that a tribunal decision is not final and irrevocable) and in February 2022 secured a final and irrevocable decision from the Ploiesti Court of Appeal. It annulled the archaeological discharge certificate, meaning that the Carnic mountain remains a protected monument.

The decision by the Ploiesti Court of Appeal of February 2022 was widely covered by Romania’s main media (e.g. hereherehere & here ). Since then Gabriel Resources released two Management & Diskussion Analysis via SEDAR (5 April and 26 May), its annual report (5 April) and a first quarter report (30 May). All documents mention the Buzău Tribunal’s decision and claim that it is ‘final’ and ‘irrevocable.’ There is no mention of the appeal nor its final and irrevocable verdict. This is even more relevant given that Gabriel Resources recently secured $5.6mil mainly to finance Arbitration costs, based on that incomplete information. And at the time when Gabriel Resources submitted its ‘new evidence‘ the appeal at the Ploiesti Court of Appeal was already in process, as can be seen from the court file. This means that it is misleading for Gabriel Resources to claim that the decision of the lower court of instance was final and irrevocable.

In terms of the arbitration timeline, in December 2021, the President of the arbitral tribunal (“Tribunal”) stated that the Tribunal was deliberating and would render an arbitral award (“Award”) in 2022. In April 2022, the Tribunal issued a limited list of further questions (new evidence)  to the Parties, with the purpose of having a complete record when it concludes its deliberations on the case as a whole and prepares the Award. The Claimants and Respondent submissions responding to the Tribunal’s questions are to be filed by June 14 and August 15, 2022, respectively.

The Ploiesti Court of Appeal ruling and more information are available here .

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