Last week, Honduran media reported that a divided Constitutional Chamber overturned the Honduran Supreme Court’s 2014 ruling upholding the constitutionality of the ZEDE investment framework. The 3-2 ruling reportedly disregards the settled Honduran legal doctrine of “acquired rights,” which protects all businesses and investors in Honduras from the retroactive application of changes in the law. The reported ruling is not yet public; and it cannot be legally effective unless it is adopted by a plenary session of the entire remaining Honduran Supreme Court.

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If reports are accurate, the divided Chamber’s preliminary 3-2 ruling contravenes a proud Honduran legal tradition, overturning dozens of longstanding court decisions previously upholding the non-retroactivity “acquired rights” doctrine (which, like the ZEDE framework, is rooted in the Honduran Constitution).

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The divided Chamber’s reported unprecedented attack on the settled Honduran legal doctrine of “acquired rights” gravely 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 U.S. investors Honduras Próspera Inc. (US-Delaware), the promoter and organizer of Próspera ZEDE, and its affiliates St. John’s Bay Development Company LLC (US-Delaware) and Próspera Arbitration Center LLC (US-Texas) (“Honduras Próspera”). Indeed, far from providing Honduras with a defense against the pending arbitration proceeding, such a ruling merely underscores the State’s disregard for its own law and undertakings, and will only strengthen the case brought by Honduras Próspera under international law. Wisdom and prudence should lead plenary jurists to join the dissenters in rejecting the Chamber majority’s threat to legal stability, thousands of well-paying Honduran jobs, hundreds of businesses, and more than $150 million in ZEDE investments.

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The deciding vote in the Chamber may have been cast after the International Centre for Settlement of Investment Disputes (“ICSID”) rejected a challenge by the Honduran Government to an arbitrator appointed in the international arbitration brought by Honduras Próspera. According to the Chairman of ICSID, and an independently consulted legal expert, the government’s dilatory challenge was baseless; and its misinterpretation of the applicable treaty was unsound.

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Rejecting the Constitutional Chamber’s similarly unsound divided decision and reaffirming the settled Honduran doctrine of non-retroactivity and acquired rights is critically important for the future of Honduras. Doing so would keep the door open to billions of dollars in foreign direct investment to Honduras to generate hundreds of thousands of well-paying jobs and opportunities for Hondurans. Failing to do so risks relegating Honduras to pariah state status.

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Reasonable people must prevail for the good of Honduras. Honduras Próspera yet again reiterates its openness to exploring the possibility of an amicable resolution. But an amicable resolution is impossible if a radical anti-investment ruling destroys the possibility of legal certainty in Honduras, as would be the consequence of overturning the doctrine of acquired rights.

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Together with the thousands of Hondurans and hundreds of businesses and investors who have made Próspera ZEDE possible, Honduras Próspera remains fully committed to defending the rule of law and property rights so that our shared vision of a prosperous Honduras will be achieved.

Contact: media@prospera.hn

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