Branding Latin America Expresses Concerns on Foreign Arbitration Tactics Threatening Latin American Sovereignty

LONDON, GB / ACCESS Newswire / February 20, 2025 /Branding Latin America (BLA), a leading consultancy specializing in Latin American affairs, is warning about an alarming trend: international arbitration is increasingly being used as a tool to pressure Latin American businesses and governments, prioritizing foreign corporate interests over national sovereignty.

Arbitration: A Legal Tool Turned Pressure Mechanism

Originally designed as a neutral way to resolve disputes, international arbitration is now being exploited by powerful corporations to force compliance with external demands. In 2023, Latin America and the Caribbean saw 28 investor-state dispute settlement (ISDS) claims-more than most regions worldwide-with over half of the rulings favoring investors.

BLA 's founder, Rodolfo Milesi, cautions against this growing legal strategy, which has the potential to reshape economic and regulatory landscapes across the region.

"What we are witnessing is deeply concerning. Arbitration is being weaponized to challenge national regulations, bypass local laws, and pressure governments into making decisions that benefit foreign entities rather than their own people. This is a direct threat to sovereignty," says Milesi.

Foreign Investors Push to Secure Latin America 's Key Resources

Latin America is home to some of the world 's most valuable mineral resources-lithium, copper, and gold-making it a key player in the global energy transition. However, as governments implement regulations to protect these resources and uphold environmental and indigenous rights, international investors are increasingly turning to arbitration to fight back.

By invoking investment treaties, corporations are attempting to sidestep national laws designed to regulate mineral exploitation, undermining local control and economic stability. This raises critical concerns about the fairness and transparency of arbitration processes that overwhelmingly favor powerful foreign investors.

Major Arbitration Cases Spark Global Concern

A growing number of cases demonstrate how investors, when faced with legal obstacles, do not hesitate to manipulate arbitrations to force favorable outcomes. One troubling example of this strategy is the Eldorado Brazil case. The Chinese Indonesian company Paper Excellence, which disputes control of the Brazilian pulp company, has filed multiple arbitration claims in Brazil and is now trying to transfer the seat of arbitrations abroad -ignoring that Sao Paulo is the only seat defined in the contract" affirms Rodolfo Milesi, founder of Branding Latin America.

This move happened after several Brazilian judges and authorities blocked the transfer of Eldorado 's shares because Paper Excellence apparently did not comply with the Brazilian Land Ownership and Leasing legislation. In these claims, Paper Excellence is seeking billions in compensation, alleging that Brazilian courts have obstructed the takeover.

Another trivia case is the case of Rio Blanco Mine Dispute: In Ecuador, Chinese mining company Junefield launched an arbitration case after the suspension of its mining operations, arguing that Ecuador 's own constitution obstructed its business. This case underscores how corporations are using arbitration to challenge national policies aimed at protecting communities and the environment.

Urgent Need for Regional Action

Branding Latin America is calling for immediate, coordinated action to address this growing challenge. Governments and businesses in the region must strengthen legal protections and push for reforms that prevent arbitration from becoming a tool of economic coercion.

"Latin America must stand together against these legal tactics," urges Milesi. "If governments and businesses fail to act, external actors will continue using arbitration to undermine national regulations and gain control over key industries."

BLA emphasizes that diplomatic efforts and regional legal frameworks are critical to ensuring arbitration does not become a backdoor for foreign influence. The consultancy urges policymakers to establish safeguards that prevent corporations from using arbitration forums to override national laws and judicial decisions.

A Wake-Up Call for Latin America

This issue is not just about individual cases-it represents a broader challenge to the sovereignty and economic future of Latin America. Branding Latin America 's warning serves as a call to action for governments, legal experts, and industry leaders to take proactive steps in defending the region 's interests against unfair arbitration practices.

For more information visit http://www.brandinglatinamerica.com/

Rodolfo Milesi
Branding Latin America
Email:rmilesi@brandinglatinamerica.com
Phone: +44 7919 020 847
Website:http://www.brandinglatinamerica.com/

SOURCE:Brand Latin America

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