Peru Faces $30 Billion in Arbitration Claims as New President Takes Office
Country Risk
Key Facts
—Total Exposure. Peru’s worst-case liability from pending investor-state claims and costs is roughly $30 billion, or 9.28% of GDP.
—Active Cases. Peru is the most sued state at the World Bank’s ICSID tribunal, with around 20 to 24 pending cases.
—Largest Claim. Canada’s Brookfield seeks approximately $2.7 billion over the Rutas de Lima toll-road concession.
—Unpaid Award. A final $40.4 million award for Lupaka Gold has grown to about $68.6 million with compound interest.
—Sector Risk. Eight of the pending cases target oil, gas and mining, while six involve transport infrastructure.
The next president will inherit a docket of Peru arbitration cases that poses a multi-billion-dollar fiscal threat and tests the country’s reputation with foreign investors.
A $30 Billion Fiscal Shadow
Peru’s Ministry of Economy and Finance (MEF) calculates that worst-case exposure from investor-state claims at the International Centre for Settlement of Investment Disputes (ICSID) plus arbitration costs reaches roughly $30 billion. That sum equals 9.28% of the country’s 2024 gross domestic product and reflects the combined impact if multiple large claims in mining, energy and infrastructure were decided adversely.
Peru has become the most sued state at ICSID in recent years, with about 20 to 24 pending cases. Many state contracts include clauses that send disputes over $20 million directly to ICSID, magnifying the country’s international legal exposure.
To understand why this matters, it helps to know that ICSID is not a commercial court but a specialised arbitration body housed within the World Bank Group. It was created to give foreign investors a neutral forum when they believe a host government has violated a treaty or contract.
For a country like Peru, whose growth depends heavily on foreign capital for mines, roads and ports, a growing stack of ICSID cases can act like a slow-moving credit-rating downgrade, raising the cost of future borrowing and making international partners more cautious.
Brookfield’s $2.7 Billion Toll-Road Claim
The single largest pending case was registered on 27 March 2025 by Canada’s Brookfield under the Canada–Peru Free Trade Agreement (FTA). The claim targets measures affecting the Rutas de Lima toll-road concession, including restrictions on toll collection that the investor alleges are expropriatory.
Public statements by the investor indicate damages of approximately $2.7 billion. Even a partial adverse award would create a multi-billion-dollar liability, significant relative to Peru’s annual infrastructure budgets.
The Rutas de Lima case is being watched closely beyond Peru because it tests how free-trade-agreement protections apply when a government restricts a private operator’s ability to collect user fees. A ruling against Peru could influence how other Latin American governments structure and regulate toll-road concessions, especially in urban areas where political pressure to freeze fares runs high.
Unpaid Awards and Enforcement Actions
Canadian miner Lupaka Gold won a final ICSID award on 30 June 2025 after a tribunal found Peru failed to protect its investment from indigenous community blockades. The tribunal ordered Peru to pay $40.4 million in compensation plus compound interest, and with no annulment request filed, the award became final and binding on 28 October 2025.
By March 2026, enforcement filings in Washington D.C. placed the total owed at about $68.6 million. Lupaka filed an enforcement action in the U.S. District Court for the District of Columbia on 27 February 2026, while Peru had earlier been declared “in default” by a U.S. Bankruptcy Court on 8 April 2025 in a separate enforcement proceeding for the Kuntur Wasi airport award.
Enforcement actions in US. courts are a serious step. When a country ignores a final ICSID award, investors can ask courts in jurisdictions where the state holds assets—such as bank accounts or receivables—to recognise and enforce the award like a domestic judgment.
A formal “default” notation in a US. court signals that Peru either did not appear or did not comply, which can complicate its access to international financial markets.
Mining Tax and Energy Disputes Add Pressure
Southern Peru Copper Corporation (SMCV) is pursuing a claim under the U.S.–Peru Trade Promotion Agreement and a 1998 Stability Agreement, alleging breaches of tax and royalty stabilisation. The company’s memorial requested damages to “wipe out all consequences” of Peru’s acts, valued at $909 million as of October 2021, with over $1 billion assessed in taxes, penalties and interest.
In the energy sector, Spain’s ENAGÁS won a $176.4 million award in November 2024 over a gas pipeline dispute, while a new case from Blue Water Worldwide over a $60 million electricity tax dispute was registered on 10 February 2026. These add to a pattern of energy-sector claims that may affect perceived risk for foreign utilities and infrastructure funds.
Stability agreements, like the one cited by Southern Peru Copper, are contracts that freeze a specific tax or regulatory regime for a set period in exchange for major investment commitments. When a government changes those rules mid-stream, the investor can argue the bargain has been broken.
Such agreements are common in capital-intensive industries where returns take decades to materialise, and disputes over them tend to be legally complex and slow to resolve.
Mixed Signals for Investor Confidence
Peru paid the $91 million Kuntur Wasi airport award in January 2026 and negotiated a settlement with Gramercy Funds in December 2024 that reduced a potential $1.8 billion bond claim to roughly $33 million. These actions are cited by commentators as positive signals that Peru can honour arbitral awards.
However, delays in paying Lupaka and enforcement defaults in U.S. courts risk damaging Peru’s image as a reliable host state. The incoming administration will need to balance prompt payment and settlements against the fiscal cost of a live docket concentrated in extractives and infrastructure, the very sectors that drive Peru’s growth model.
What to watch next is whether the new government moves quickly to clear the smaller, finalised awards or allows them to linger. Another open question is how the Brookfield case shapes negotiations over other toll-road and infrastructure contracts, where political sensitivity and legal exposure are both high.
Observers will also be tracking whether Peru’s credit outlook shifts if the total claimed amount continues to climb, and whether the concentration of cases in mining and energy prompts any broader review of the stability agreements that underpin those investments.
Frequently Asked Questions
What is ICSID and why does it matter for Peru?
ICSID is the International Centre for Settlement of Investment Disputes, a World Bank body that arbitrates disputes between foreign investors and host states. It matters for Peru because the country is currently the most sued state at ICSID, with around 20 to 24 pending cases that carry a worst-case fiscal exposure of roughly $30 billion, according to the Ministry of Economy and Finance.
How much does Peru currently owe from lost arbitration cases?
The largest unpaid award is the Lupaka Gold case, which has grown to about $68.6 million with compound interest as of March 2026. Peru paid the $91 million Kuntur Wasi award in January 2026 and settled the Gramercy bond case for roughly $33 million, but other enforcement actions, such as the Deviandes road concession case for about $85.8 million, are reportedly ongoing in U.S. courts.
Which sectors face the most arbitration risk in Peru?
Among the 24 ongoing ICSID cases, eight involve oil, gas and mining, six target transport infrastructure such as roads, metro and ports, and two concern power and energy. This concentration means arbitration outcomes are closely tied to Peru’s extractive industries and public-investment strategy.
Sources include Wolters Kluwer’s arbitration blog, the National Law Review, ITA Law, Daily Jus, and ISDS Bilaterals.
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