Summary

Source: icsid.worldbank.org

APPLICANT'S REPLY ON ANNULMENT

TABLE OF CONTENTS

I. INTRODUCTION
II. PERU HAS FAILED TO REBUT FREEPORT'S SHOWING THAT THE TRIBUNAL MANIFESTLY EXCEEDED ITS POWERS UNDER ARTICLE 52(1)(B) OF THE ICSID CONVENTION
A. Peru's Assertion that the Tribunal Denied Jurisdiction over the Royalty Penalties and Interest Claims Is Unsupported by the Award
B. Peru Misstates the "Manifest" Standard, and Its Position Fails Even on Its Own Terms
III. PERU HAS FAILED TO REBUT FREEPORT'S SHOWING THAT THE TRIBUNAL FAILED TO STATE REASONS UNDER ARTICLE 52(1)(E) OF THE ICSID CONVENTION
A. The Tribunal Provided No Reasons for Its Failure to Decide the Royalty Penalties and Interest Claims on the Merits
B. Even on Peru's Case, a Jurisdictional Dismissal of the Royalty Penalties and Interest Claims Would Result in Contradictory Reasons in the Award
IV. PERU HAS FAILED TO REBUT FREEPORT'S SHOWING THAT THE TRIBUNAL SERIOUSLY DEPARTED FROM A FUNDAMENTAL RULE OF PROCEDURE UNDER ARTICLE 52(1)(D) OF THE ICSID CONVENTION
A. Peru's Attempt to Recast the Tribunal's Glaring Omission as an Implicit "Decision" on the Royalty Penalties and Interest Claims Is Unsupported and Misconceived
B. Even on Peru's Case, the Tribunal's Decision would Constitute a Serious Departure from a Fundamental Rule of Procedure
C. The Tribunal's Departures Were "Serious."
V. THERE IS NO BASIS TO REFUSE ANNULMENT IF THE TRIBUNAL COMMITTED AN ANNULLABLE ERROR
A. Peru's Abuse of Process Allegations Are Baseless and Cannot Prevent Freeport from Exercising Its Right to Request Annulment
B. Peru Cannot Resort to Committee Discretion to Avoid Annulment
VI. FREEPORT IS ENTITLED TO COSTS
VII. REQUEST FOR RELIEF

1. Pursuant to Article 52 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the "Convention"), Rule 50 of the 2006 ICSID Rules of Procedure for Arbitration Proceedings (the "Arbitration Rules"), and Procedural Order No. 1 of the ad hoc Committee dated 12 February 2025, applicant Freeport-McMoRan Inc. ("Freeport" or "Applicant"), on its own behalf and on behalf of Sociedad Minera Cerro Verde S.A.A. ("SMCV"), hereby submits this Reply in response to Peru's Counter-Memorial dated 16 September 2025 (the "Counter-Memorial") in support of its Application for Partial Annulment of the award issued on 17 May 2024 in Freeport-McMoRan Inc. v. Republic of Peru, ICSID Case No. ARB/20/08 (the "Award").

I. INTRODUCTION

2. The Tribunal failed to decide Freeport's US$417 million claims for penalties and interest on the Royalty Assessments, after expressly confirming jurisdiction over them. This fundamental omission presents precisely the type of exceptional case in which partial annulment is warranted under Article 52 of the ICSID Convention. Annulment is justified on three independent grounds: (i) under Article 52(1)(b) because the Tribunal manifestly exceeded its powers by failing to decide Freeport's Royalty penalties and interest claims after affirming jurisdiction over them; (ii) under Article 52(1)(e) because the Tribunal's inexplicable omission constitutes a failure to state reasons; and (iii) under Article 52(1)(d) because the Tribunal's failure to decide claims submitted to it, despite Article 48's requirement that a tribunal address all questions before it, constitutes a serious departure from a fundamental rule of procedure.

3. Peru recognizes, as it must, that this type of glaring omission is precisely the kind of error prior committees have found justify annulment. To avoid that result, Peru attempts to recast the Award as denying jurisdiction over the Royalty penalties and interest claims under the TPA's tax exclusion. This is an impossible task. The Award's dispositif unambiguously denies jurisdiction only over the Tax penalties and interest claims and affirms jurisdiction over all other claims. The jurisdictional section reinforces this conclusion: it repeatedly and unequivocally confines the tax exclusion analysis to penalties and interest on the Tax Assessments alone. By contrast, there is not a single reference to--let alone exclusion of--the Royalty penalties and interest claims anywhere in that analysis, and nowhere does the Award state that those claims fall outside the Tribunal's jurisdiction.

4. To argue that the Tribunal intended the opposite of what it expressly and repeatedly held, Peru advances a series of contrived interpretations that find no support in the Award. Most strikingly, Peru attempts to sidestep the Tribunal's express jurisdictional ruling in the dispositif by labeling it as a mere "typographical or clerical error." This extraordinary contention itself exposes the untenability of Peru's position, which cannot even be reconciled with the Award's operative text. Peru then relies on the only two paragraphs of the Award that mention "penalties and interest" without expressly referencing the Tax Assessments, arguing that they demonstrate the Tribunal excluded all penalties and interest from its jurisdiction "as a general matter." But that argument ignores that every reference to penalties and interest in the Tribunal's tax exclusion analysis is expressly and exclusively limited to the Tax Assessments. That limitation conclusively disproves Peru's theory that the Tribunal found all penalties and interest claims-- including those on Royalty Assessments--fell outside its jurisdiction.

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VII. REQUEST FOR RELIEF

114. For the foregoing reasons, Freeport respectfully requests that:

(a) the Award's rejection of Freeport's Article 10.5 claims based on Peru's failure to waive the penalties and interest on the Royalty Assessments be annulled; and

(b) Freeport be reimbursed for all costs and expenses associated with the annulment proceedings, including professional fees and disbursements, with interest as of the date of the decision on annulment until full and final payment.

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