Honduran Supreme Court to decide between vindicating rule of law or upholding sweeping anti-investment ruling
By Próspera Team3 min read
Last week, the Honduran media reported that a Honduran company, which was divided Constitutional Chamber overturned the Honduran Supreme Court's 2014 ruling upholding the constitutionality of the ZEDE investment framework.. The 3-2 ruling allegedly ignores the well-established Honduran legal doctrine of “acquired rights,” which protects all companies and investors in Honduras from retroactive application of changes in the law. The reported ruling is not yet public and cannot have legal effect unless it is adopted by a plenary session of the Honduran Supreme Court.
If the reports are accurate, 3-2 preliminary ruling by the divided Chamber contravenes a proud Honduran legal tradition, reversing dozens of long-standing court decisions that previously upheld the doctrine of non-retroactivity of “acquired rights”.” (which, like the ZEDE framework, is rooted in the Honduran Constitution).
The reported unprecedented attack by the divided Chamber against the consolidated Honduran legal doctrine of “acquired rights”.” severely threatens every job, business and investor in Honduras. There is nothing for the government of Honduras to gain from such a ruling.
It does not affect the validity of the international claims brought by the U.S. investors, Honduras Próspera Inc. (U.S.-Delaware), the promoter and organizer of Próspera ZEDE and its affiliates St. John's Bay Development Company LLC (U.S.-Delaware) and Próspera Arbitration Center LLC (U.S.-Texas) (“Honduras Próspera”). In fact, far from providing Honduras with a defense against the ongoing arbitration proceedings, such a ruling simply underscores the State's disregard for its own law and commitments., and will only strengthen the case presented by Honduras Prospera under international law. Wisdom and prudence should lead the plenary judges to join the dissenters in rejecting the threat that the Chamber's majority position represents to legal stability, thousands of well-paying jobs in Honduras, hundreds of businesses and more than $150 million in investments in the ZEDE.
The decisive vote in the Chamber may have been cast after the International Centre for Settlement of Investment Disputes (ICSID) rejected a challenge by the Government of Honduras to the international arbitrator appointed in the international arbitration brought by Honduras Prospera. According to the ICSID President and an independently consulted legal expert, the government's dilatory challenge was without merit and its misinterpretation of the applicable treaty was unsound.
Rejecting the equally untenable split decision of the Constitutional Chamber and reaffirming the well-established Honduran doctrine of non-retroactivity and acquired rights is of vital importance to the future of Honduras. Doing so would keep the door open to billions of dollars in foreign direct investment in Honduras to generate hundreds of thousands of well-paying jobs and opportunities for Hondurans. Failure to do so risks relegating Honduras to pariah state status.
Reasonable people must prevail for the good of Honduras. Honduras Prospera reiterates once again its willingness to explore the possibility of an amicable resolution. But an amicable resolution is impossible if a sweeping anti-investment ruling destroys the possibility of legal certainty in Honduras, as would be the consequence of overturning the doctrine of acquired rights.
Together with the thousands of Hondurans and hundreds of businesses and investors who have made Próspera ZEDE possible, Honduras Próspera remains fully committed to upholding the rule of law and property rights so that our shared vision of a prosperous Honduras becomes a reality.
Contact: medios@prospera.hn