RIO DE JANEIRO, BRAZIL – Less than two years after winning a billion-dollar arbitration award against entrepreneur Benjamin Steinmetz’s company, Brazil mining giant Vale S.A. is about to engage in a new dispute in the London arbitration court, initiated by the Israeli’s attorneys.
Vale and BSGR forged a US$5 billion partnership in 2010, which turned into an international imbroglio in their bid to exploit iron ore deposits in Simandou, Guinea.
Vale invested US$2.5 billion in the deal, which ultimately failed: the Guinean government revoked Steinmetz’s mining rights in 2008, during the rule of dictator Lansana Conté.
With the death of General Conté in December that year, Guinea was involved in a military dispute for control of the country that only ended when Alpha Condé won the presidential election in 2010 – in 2020 he was re-elected for his third consecutive term.
Elected with the backing of financier George Soros – Steinmetz’s sworn enemy – Condé canceled the Vale-BSGR joint venture exploration licenses in April 2014 on the grounds that they had been won through fraud. The war between Vale and BSGR began.
The Brazilian mining company accused Steinmetz’s company of paying kickbacks to secure the exploration rights for the African iron mine – and managed to win the legal battle. The London arbitration court in 2019 ordered BSGR to pay US$2 billion to Vale as compensation for the failed joint venture on the other side of the Atlantic.
Now the corporate feud has just been reignited. A new arbitration, which will deliberate the same issue, is about to begin in England.
WilmerHale law firm, in a message signed by Gary Born (one of the world’s leading experts in arbitration), sent an e-mail to Cleary Gottlieb Steen & Hamilton LLP, Vale’s UK law firm.
In the statement, WilmerHale said it was initiating a new arbitration on the grounds that the first one, won by Vale, “presented incomplete materiality and false evidence, including the destruction of documents” that would be of interest to the dispute.
In the email, the law firm representing Benjamin Steinmetz also claimed that new evidence emerged after a private investigation hired by BSGR uncovered ex-Vale executives in allegedly compromising conversations.
The message also accuses Vale’s then CEO Roger Agnelli of giving false testimony to the London arbitration court. The allegation refers to the fact that the mining company’s then CEO allegedly knew that BSGR had acquired the Simandou rights irregularly.
The reply from the law firm defending Vale came on July 1. “His message represents the latest in a long series of cynical attempts by Mr. Steinmetz and his associates to deflect attention from their own culpability for the bribery and subsequent fraud perpetrated against Vale in relation to Simandou mining licenses.”
On July 8 came WilmerHale’s rejoinder, with confirmation that a new arbitration is being initiated.
Questioned, Vale said in a statement sent by its press office that the motion for a new arbitration by BSGR is “just another desperate attempt by Mr. Benjamin Steinmetz, whose outcome will be exactly the same as all previous ones, which not only culminated in his criminal conviction by the Swiss courts, but also in the liability of his company BSGR by London and New York courts.”