Tribunal Grants Six-Year Concession Extension to Lima Expresa
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Compass Lexecon experts Marcelo Schoeters and Ariel Medvedeff were retained by Lima Expresa S.A.C. (LIMEX), VINCI’s road concessionaire in Lima, Peru, in arbitral proceedings initiated by the Metropolitan Municipality of Lima (MML).
In 2009, LIMEX and MML entered into a concession agreement for the Línea Amarilla Project, which included both a brownfield component and a greenfield component, covering its construction, operation, and maintenance.
MML claimed that since inception, the economic-financial equilibrium of the concession was breached, that the imbalance was exacerbated by the signing of the addenda, and that both should be declared null due to corruption. LIMEX denied these allegations and presented counterclaims related to cost overruns and lost revenue.
Mr. Schoeters and Mr. Medvedeff provided expert analysis on three key areas: the restitution in case of annulment of the concession and the addenda, the alleged economic-financial imbalance, and LIMEX’s counterclaims.
The Tribunal initially issued a partial award that dismissed MML’s claims and upheld most of LIMEX’s counterclaims. In its final award, the tribunal granted LIMEX six additional years on its highway concession and ordered MML to pay $10 million in costs.
The Tribunal relied on Mr. Schoeters’ and Mr. Medvedeff’s valuation model to determine the necessary extension of the concession period to compensate LIMEX, drawing on their valuation of the counterclaims, their calculation and use of the weighted average cost of capital as the appropriate discount and update rate, and their application of a discounted cash flow methodology.
Compass Lexecon’s expert team was supported by Ariel Seidenfeld, Juan García, and Milagros Neumann. Compass Lexecon worked with a legal team led by Roberto Aguirre Luzi and Renzo Seminario Córdova of King & Spalding (US), María del Carmen Tovar and Javier Tovar of Estudio Echecopar (Peru), and Luis Marcelo de Bernardis and Santiago Carrillo of Miranda & Amado (Peru).