LatinNews Daily Report - 04 February 2014

ECONOMY | Rurelec row. On 3 February Bolivia’s state attorney general, Hugo Montero, announced that the government led by President Evo Morales would pay the British power company, Rurelec, US$28.9m plus interest in compensation for its expropriation back in 2010. This is likely to spark a new row, following a ruling announced the previous day by the Permanent Court of Arbitration (PCA) at The Hague ordering the Morales government to pay some US$41m to Rurelec after upholding the company’s claim that Bolivia’s expropriation of Rurelec's 50% participation in the energy company Empresa Guaracachi SA on 1 May 2010 was in breach of its obligations under the Bilateral Investment Treaty between the UK and Bolivia. This is the first such arbitration award granted by an international court against Bolivia. Rurelec initially demanded US$142m in compensation. Rurelec issued a press release yesterday stating that “the award is final and binding on Bolivia and shall be carried out without delay”. However, Montero justified the government’s refusal to pay the full amount on the grounds that Rurelec’s figures were subject to question.

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