Bribery claims, threats are part of arbitration case

Starting in December, if the case advances, an arbitration panel will consider, among other allegations, if the country is responsible if officials rebuffed in bribery attempts take revenge against a developer.

This is one of the many allegations brought by U.S. investors who seek more than $100 million for Costa Rica’s failure to protect investors, as required by the free trade treaty with the United States.

This is the case of  Condominio Horizontal Residencial Las Olas in Esterillos Oeste in the Municipalidad de Parrita. A three-person arbitration panel already has been formed through the World Bank’s International Centre for Settlement of Investment Disputes.

One of the principals in the Las Olas investment group is David R. Aven, who alleged in an arbitration filing that the government shut down the project in 2011 over claims that part of the property was a protected wetland.

Costa Rica has not yet replied to all the allegations, but the country’s lawyers in an initial filing said that the rationale behind the decision to suspend the project was based on environmental protection and not the developer’s nationality.

The Las Olas most recent filing, some 174 pages, suggests that nationality is a concern by some. It cites a series of email threats that have been entered into evidence. One said in part:

“Stop all your bizness in Costa Rica or no more luck for you and your friends. Get the message Gringo!”

Then there was the motorcycle assailants who put five shots into a car containing Aven and another investor, according to the filing.

That’s why he no longer is in Costa Rica.

Aven has been described as a hard-driving U.S. businessman who tries to cut through the Costa Rica red tape. The record shows that his project, condos, a hotel and a beach club, were fully approved before the municipality issued the stop-work order.

And while the project has been in limbo, squatters have moved onto the prime beach land, and there have only been sporadic efforts to dislodge them. The project’s local associate, Jovan Damjanac, estimates their number at about 40.

Basically, Aven says that environmental inspections of the property failed to locate any wetlands, but then other government agencies claimed the wetlands exits. The filing blames neighbors for opposing the project.

Wetlands or not, the case certainly is a swamp of allegations, contradictions and bad luck. The full filings are available HERE!

Aven and Damjanac have been accused of environmental crimes.  The filing maintained that their defense case was overwhelming, and that only an ailing judge prevented a decision and propelled the case into a new trial.  That is when Aven left Costa Rica.

For a time he was the subject of an Interpol red notice.

The arbitration filling presents a strong case, but Costa Rica, in a response probably will maintain as it has in the past that Aven broke the law involving wetlands.  Damjanac is accused of cutting down trees.

Aven’s allegations of bribe attempts by members of the municipality and a local environmental worker appear to have not generated a vigorous investigation.

For example, the filing said that a prosecutor closed one bribe case without informing Aven.

The filing also said:

“Notes on the file claimed that the prosecutor had repeatedly tried to contact Mr Aven. The prosecutor claimed to have asked Mr. Aven on November 4, 2011, to attend his office for an interview. Mr. Aven never received such a request. The file also noted that the prosecutor had requested evidence from Mr. Aven and that Mr. Aven had said he was not interested in pursuing the matter. As Mr. Aven states in his witness statement, this is simply not true. A third note on the file claimed that the prosecutor had attempted to place a call to Mr. Aven. Mr. Aven never received such call, nor was his attorney contacted by the prosecutor’s office.”

The filing also says that there have been no results of an investigation on who fired on Aven’s car.

Regardless of the outcome of the arbitration, the Las Olas case is not good public relations for Costa Rica.

The investment became a swamp.

The investment became a swamp.

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