Important facts:
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ICSID accepted Prospera’s request for international arbitration in its dispute with the government.
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Prospera’s legal team assures that the decision taken by the government is invalid.
Within the framework of the conflict facing Honduras with the Bitcoiner stronghold of Prospera, the government of Xiomara Castro received the support of a group of 85 economists who are members of Progressive International, an organization that includes progressive and left-wing activists. This, while the project’s legal team considers the government actions “void”.
Economists and activists from several countries included in the group signed a document In support of the decision taken a few weeks ago by the Government of Honduras Of withdraw from agreement Signed with the International Center for Settlement of Investment Disputes (ICSID).
it’s about a International Court of Arbitration that depends on the World Bank And it establishes a legal framework for the resolution of disputes between foreign investors and host states.
It should be remembered that even before ICSID, Prospera investors had sued Honduras for US$10.7 billion in 2022. They complain of the government’s intention to eliminate the law that allows the creation of Employment and Development Zones (ZEDEs), which are the regulations governing the citadel and which were introduced by former President Juan Hernández (2014–2022). was promulgated.
Based on the above, Prospera’s Zade, located on the Caribbean island of Roatan, is in legal limbo after Congress voted against the law, Although the revocation has not yet been confirmed,
In that sense, Progressive International think over The Bitcoin Citadel lawsuit “represents a powerful case of corporate abuse that seeks to obtain two-thirds of the country’s annual budget as compensation for repealing a law that handed over Honduran territory to foreign corporations.” They describe Prospera investors as “crypto millionaires.”
So they raise questions in that area are private cities that operate autonomously from the governmentAnd the amount is claimed which they term as “undue”.
The conflict has been worsening since last February, when ICSID formally registered and approved Request submitted by Prospera Against the Republic of Honduras.
The next step will be the appointment of a referee. A situation that did not please the Government of Honduras, which proceeded to make a “written declaration of complaint” against ICSID. The country announced that His departure from the organization at the end of August this year,
However, according to José Luis Moncada, former director of Honduras’s financial control agency, Honduras “will be obliged to respect the outcome of the arbitration and any other decision submitted before September.”
country after that date shall not be subject to the provisions of ICSID Regarding resolution of investment disputes. Which increases the uncertainty around Prospera’s claim.
Prospera will draw on other international frameworks
In defense of the Citadel, Jorge Colindres, Prospera’s technical secretary, sent Cryptonoticias an analysis conducted by the Foundation for Economic Freedom of Honduras.
In the document, a group of lawyers point out that the decision of the executive branch was made without consultation or prior approval by the National Congress of the Republic. What makes an action to withdraw from a treaty void?,
«For Honduras to withdraw from international conventions and treaties to which it is a party, the authorization of both the executive branch and the legislative branch is required, for the simple reason that the approval of both branches is necessary to comply with the treaty or agreement. State,” says the group of lawyers supporting Prospera.
The company managing the project says that, under these legal principles, the government cannot unilaterally denounce treaties or agreements. They also allege that the project is being patronized Multiple legal frameworks at national and international level,
According to statements by the Technical Secretary, the guarantees include the constitutionally acquired rights of investors, the 50-year legal stability agreement that guarantees investors, and the protections offered by international law through the Central American Free Trade Agreement. Bilateral investment treaty between the United States and Honduras.
“All these agreements contain provisions for investment protection and dispute resolution mechanisms, which can provide foreign investors A viable option in the absence of ICSID,
As Colindres points out, Prospera investors still hope to reach an agreement with Xiomara Castro’s government that is favorable to both parties. The idea is that the agreements signed regarding ZEDE operating in Honduras are recognized and investments in Prospera are protected.
Meanwhile, residents of Roatan have divided opinions regarding the conflict, and Bitcoiners who live on the island They continue their activities. Everyone is on alert regarding the incidents.
Citadel of Prospera launched in 2020 with the promise of a libertarian paradise. She has become famous in the ecosystem for her decision Declaring Bitcoin (BTC) a Legal Tender and Unit of Account, The charter city promises investors and island communities low taxes, job creation and cryptocurrency-friendly regulations.
