Resolves YES if either of these happens:
Prospera wins the suit above and is awarded a non-trivial amount ($400mm or above)
Honduras backs off and allows them to continue developing their city
EDIT: Clarification after question in the comments - Prospera has to actually get the money. If they win the case, but Honduras refuses to pay, this is not a Prospera win and will be resolved as NO.
If they reach an out-of-court settlement, I will try to use my best judgement to evaluate if Prospera achieved it's goals.
In the rare case where there is completely ambiguous information, I might resolve "N/A"
Context, from ACX:
Prospera Sues Honduras For 2/3 Of Its National Budget
To refresh: in the mid-2010s Honduras’ pro-market government created ZEDEs - businesses that bought up unoccupied land could start their own districts with their own preferred legal system in exchange for bringing in investment.
The government knew businesses wouldn’t invest long-term if the next government could just cancel the agreement and seize all of their stuff, so they fortified the law with as much protection as possible. It would take a long constitutional amendment process to repeal, and ZEDE investors might be able to object to any changes under international investment treaties. Lured by these protections, three companies started ZEDEs, including a big high-profile one called Prospera.
In early 2022, a socialist government took power, and started trying their best to destroy the ZEDEs. They started the constitutional amendment process (they seem to think they’ve finished it, but a Prospera rep I talked to believe they have to hold another vote by the end of this year, something I see no signs of them doing) and have been harassing and stonewalling existing ZEDEs. One ZEDE, Orquidea, shut down immediately. A second, Ciudad Morazan, seems to still be operating but I cannot figure out exactly how or why. Prospera has been most vocal in its opposition, and sued Honduras for $11 billion in the World Bank’s court of investment arbitration.
(Prospera has only spent about $100 million so far, so it’s unclear why they deserve 100x that in penalties. Also $11 billion is “two-thirds of the 2022 Honduran national budget”, and forcing Honduras to pay it would cause national catastrophe. This might be more of a highball offer than a number they actually expect to get.)
This article (poorly translated from Spanish, sorry) has the most information. It suggests Honduras believes they signed onto the investment treaties “with reservations”, ie conditional on being allowed to do things like shut down ZEDEs, and that therefore the suit is meaningless and they will not defend themselves. Although the magazine is on the government’s side of the overall issue, it suggests they didn’t actually sign on with reservations, that the country’s lawyers might just have no idea what they’re talking about, and that their bold strategy of refusing to defend themselves will not pay off. In contrast, Prospera has prestigious lawyers specializing in exactly this area, so things aren’t looking good for the government.
Honduras seems to recognize this and is threatening to withdraw from ICSID, the international investment treaty that governs such disputes. This wouldn’t be completely unprecedented - Venezuela, Bolivia, and Ecuador have also done this. But ICSID rules say that withdrawing from ICSID, while it might help prevent future cases against you, doesn’t cancel existing cases, and wouldn’t protect Honduras against Prospera’s claim.
(How would ICSID collect against Honduras if they lost? I don’t know, but I assume the global financial order has some way to make your life worse if you defy it.)
I think everyone is hoping Honduras realizes that cancelling a flourishing economic zone that’s bringing lots of investment into the country at no cost to them - just isn’t worth taking an $11 billion loss, cancelling international treaties, and scaring off future investment. But who knows how these people think?
Related questions
@BrunoParga good question!
This covers the case where Honduras loses, but decides to throw a hissy fit and refuses to pay. In my opinion, following the spirit of the question, this is not a win for Prospera - they get no money and no city. If it seems likely that this will be the case if Prospera wins, I will take a bit of time to see if Honduras intends to pay, then use my best judgement.
@PeterBuyukliev a pretty big part of being a sovereign state, which Honduras is, is that they cannot be forced to repay their debts. North Korea owes Sweden €234M for 1,000 Volvos that were exported in the 70s and never paid for – and never will be.
Honduras rejecting jurisdiction – which is actually a valid move in international law in general, although it does seem it's illegal for Honduras in this particular case – is a pretty good indicator it will never pay a dime.
@BrunoParga Okay, in that case this feels like Prospera not winning the fight against Honduras, but a lose-lose. So that will be resolved as NO.
