The Arbitral Tribunal of the World Bank’s settlement centre ICSID has rejected all the claims against Romania by Canada-registered Gabriel Resources, which accused the Romanian government of expropriating its investments in the Rosia Montana gold mining project and breaching two bilateral foreign investment agreements, with the UK and Canada.

Gabriel Resources sued Romania at the World Bank’s ICSID back in 2015, citing $4.4bn losses incurred as a result of Romania’s denial of the environmental documents necessary for the development of the project.

The ruling, adopted with a majority of two out of three votes, is final. 

Gabriel Resources also has to pay Romania nearly $10mn to compensate the country’s expenditures with legal fees.

“The tribunal took into account the multiple environmental, social, cultural and economic challenges faced by the mining project, finding that the Romanian authorities fulfilled their regulatory mandate ‘as best they could in these difficult circumstances’,” the team of lawyers who represented Romania explained.

The ruling in full is expected after some 20 days and Romanian Prime Minister Marcel Ciolacu insisted on full disclosure of non-confidential information related to the case.

One of the members of the Romanian law firm defending the government, Leaua, Damcali, Deaconu, Păunescu (LLDP), Crenguta Leaua, said that the decision “confirms that Romania has observed its obligations towards the foreign investor, as provided by the mutual protection treaties of investments”. 

Another member of Romania’s team of lawyers, Veijo Heiskanen of Lalive Avocats, Switzerland, said that “justice was served” and as a result, Romania will be able to allocate some $6bn “to more sustainable and important issues”. 

Gabriel Resources reacts 

The chair of Gabriel Resources  Anna El-Erian, in his turn, said that the ruling was “deeply flawed”, pointed to the separate opinion expressed by the dissenting arbitrator and mentioned that “options will be evaluated”. 

“The company is analysing the tribunal's decision with its legal advisers to evaluate its options, including to challenge the decision through the annulment process prescribed by the ICSID Convention,” Gabriel Resources’ press release reads.

“We will be studying the Tribunal's decision in detail before evaluating our next steps," said Dragos Tanase, CEO of Gabriel Resources.

The expropriation was allegedly carried out through multiple actions, including the politicisation of the case, Gabriel Resources claimed. 

Romania did not issue a recommendation on the Environmental Impact Assessment (EIA) for about nine years (2006-2015) and unnecessarily placed the area supposed to host the gold mine under UNESCO protection thus hindering the development of the project, Gabriel Resources claimed. Furthermore, the investor accused Romania of unnecessarily drafting and later not adopting in parliament a bill that would have accelerated the project. 

Romania answered in its defence that only Gabriel Resources and its project company are responsible for failing to obtain the environmental permit and the “social license” (public approval) for the project. 

Furthermore, according to the answer pleading quoted by CursDeGuvernare, Romania claims that none of its actions (and particularly placing the project’s location under UNESCO protection) hinders the investor’s capacity to request all the necessary permits. This in principle means that Gabriel Resources can go ahead with the project, if the mining license, which expires this year, is prolonged.

Rosia Montana's project timeline

The mining license was issued in 1999 with no competitive procedures to state-owned Minvest. Gabriel Resources is the majority owner (80%) of Rosia Montana Gold Corporation (RMGC), a joint company formed in the same year with Minvest, which holds 20%. Under the joint venture with Gabriel Resources, Minvest transfers the license to RMGC.

RMGC filed the project's Environmental Impact Assessment (EIA) in 2005. 

In 2007, then environment minister Attila Korodi suspended the issuance procedure for the permit requested by the company, because RMGC failed to submit the urban planning document (PUZ) for the area. Korodi was part of a government formed in 2007 by the Social Democrats (PSD) and Liberals (PNL) – thus with the same structure as the current (2024) ruling coalition.

The PUZ was suspended and later annulled by a court, after objections were made by green NGOs. 

Gabriel Resources sued Korodi and one of his subordinates for their actions but lost the case in court.

In 2013, the Romanian government, led by Social Democrat PM Victor Ponta, drafted a bill aimed at accelerating the Rosia Montana gold mining project. However, faced with massive protests organised by green NGOs, the bill was not endorsed by lawmakers.

In 2017, the technocratic Romanian government filed a request to place the Rosia Montana region including the mining site under UNESCO protection. The request was accepted by UNESCO in 2021.

Minister criticised 

Finance Minister Marcel Bolos claimed that the lawyers defending the Romanian government estimated the odds of a ruling in favour of Romania as “very slim”. 

His constant pessimistic comments doubled the price of Gabriel Resources’s shares on the Toronto Exchange, the opposition said – implying insider trading.

In the litigation initiated in 2015, Gabriel Resources asked for compensation of up to $6.7bn, Bolos announced in early February, quoting Romania’s lawyers, Lalive and LDDP.