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IdentifierCreatedClassificationOrigin
06SANJOSE1254 2006-06-07 17:30:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy San Jose
Cable title:  

COSTA RICA - 2006 REPORT ON INVESTMENT DISPUTES AND

Tags:   EINV KIDE EFIN PGOV PREL ECON CS 
pdf how-to read a cable
VZCZCXYZ0002
OO RUEHWEB

DE RUEHSJ #1254 1581730
ZNR UUUUU ZZH
O 071730Z JUN 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5280
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
					  UNCLAS SAN JOSE 001254 

SIPDIS

SIPDIS
SENSITIVE

WHA/CEN
EB/IFD/OIA FOR JPROSELI
L/CID FOR EDAUGHTRY

E.O. 12958: N/A
TAGS: EINV KIDE EFIN PGOV PREL ECON CS
SUBJECT: COSTA RICA - 2006 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CASES

REF: SECSTATE 060294

----------
COSTA RICA
----------



1. (U) SUMMARY. The Embassy is aware of two outstanding
American business claims against the Government of Costa
Rica (GOCR). Since our last report in January 2005, the
GOCR has made little effort to resolve these investment
disputes despite Embassy efforts to urge conciliation or
arbitration to resolve both cases. There were rulings on
motions, however both cases are ongoing. President Oscar
Arias took office May 8, 2006, and it is not yet known how
the new administration will respond. The claimant
designation is the same as used in the 2005 report. END
SUMMARY.



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EXPROPRIATIONS


--------------------------



CLAIMANT C



2. (U) The AMCIT lands were expropriated and held for eight
years after which the GOCR returned the property and
indicated a willingness to consider compensation for lost
income based on an appraisal. The appraisal estimated that
ranch revenue of 11 million USD was lost during the
confiscation. The GOCR balked at the amount and has left
the case unresolved for the last 10 years.



3. (U) Claimant told the Embassy he plans to pursue
arbitration again with the new GOCR administration that took
office May 8, 2006. The new Minister of Justice has shown
interest in resolving the issue and requested copies of
recent documents furnished by the interested parties to the
Embassy. Claimant C contacted the mission on May 23, 2006
to report that he will be visiting with the Minister's
advisors as soon as possible to reopen his case with the
GOCR.



--------------------------


Business Disputes


--------------------------



CLAIMANT E



4. (U) An American oil company was granted a concession for
offshore exploration. When the previous administration came
into office in 2002, it announced that offshore oil
production would not be allowed. The claimant pursued legal
recourse for damages suffered when the concession contract
was cancelled. In different rulings the courts have found
in favor of the claimant at times and the GOCR in others.
Following a court decision in favor of the claimant for
damages, the GOCR responded in January 2005 by declaring the
claimant in breach of contract for non-performance. In
April 2005, the claimant responded to the breach of contract
charge by counter-suing the GOCR. The claimant countered
that non-performance was caused by the original GOCR finding
that environmental impact studies were inadequate, which
delayed work. On May 29, 2006 Claimant told the Embassy he
plans to keep the court case alive while simultaneously
pursuing a negotiated settlement with the new GOCR
administration.



--------------------------


IDENTIFICATION OF CLAIMANTS


--------------------------





5. (SBU) Claimant C: Rancho Gessling, S.A.
Claimant E: Harken Energy Corporation/MKJ
FRISBIE