Peruvian Prime Minister Ernesto Alvarez speaks during a session at Congress in Lima, Peru, in October. A U.S. federal judge declared the state of Peru in default in a court proceeding to enforce a $91 million international arbitral award. File Photo by Paolo Aguilar/EPA
A U.S. federal judge declared the state of Peru in default in a court proceeding to enforce a $91 million international arbitral award after the country failed to respond or appear before the court within the required deadlines.
The decision stems from a lawsuit filed by concessionaire Kuntur Wasi, linked to the canceled Chinchero International Airport project in the Cusco region of southern Peru.
Peruvian daily La República reported the ruling was issued by Judge Richard León of the U.S. District Court for the District of Columbia.
“Peru never appeared nor filed an answer or any other submission,” the order said.
The judge confirmed the validity of a 2024 arbitral award issued by the International Centre for Settlement of Investment Disputes, which ordered Peru to compensate the concessionaire following the termination of the project’s concession contract.
The dispute dates back to the unilateral cancellation of the concession to build and operate Chinchero International Airport.
The contract was awarded in 2014 to Kuntur Wasi, a consortium formed by Peru’s Andino Investment Holding and Argentina’s Corporación América. In 2017, the Peruvian government terminated the agreement, arguing that the contract terms were unfavorable.
Kuntur Wasi took the case to the ICSID tribunal, which ruled in favor of the company and ordered compensation.
The default declaration does not require immediate payment or the automatic seizure of Peruvian assets, but it allows the court to proceed without the state’s defense and move toward a potential default judgment recognizing the award.
In May, the U.S. Bankruptcy Court for the District of Columbia had also declared Peru in default for failing to comply with the ordered payment, a decision that, according to local reports, enabled the claimant to pursue attachment or other legal measures against state assets.
Enforcement against a sovereign state, however, is constrained by legal limits, particularly those related to sovereign immunity and the nature of state property.
Arbitration specialist Adrián Simons told RPP TV that Peru must comply with its international obligation and pay the award. He cited the Washington Convention, to which Peru is a party, noting that Article 54 requires contracting states to recognize ICSID awards.
Simons added that in August a measure was published authorizing Peru’s Ministry of Transport and Communications to make budgetary adjustments to finance obligations arising from ICSID awards.
“Months have passed since this rule was published and the ministry has not adjusted its budget or made the payment,” he said, warning that interest continues to accrue and that each month of nonpayment costs the Peruvian state thousands of dollars.
