The U.S.-backed developers of the Próspera charter city claim at ICSID that Honduras expropriated their investment by repealing its ZEDE special economic zone regime in 2022. The tribunal has rejected Honduras’s preliminary objections and its request to bifurcate. On October 7, 2026, four admitted amici curiae filed written submissions, and no award has issued.
Latest development Oct 7, 2026
On October 7, 2026, the four non-governmental organizations admitted as amici curiae filed their written submissions in the arbitration. They filed under Article 10.20.3 of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and ICSID Arbitration Rule 67.
Why it matters
The case tests whether a state can dismantle a private-governance zone without paying treaty damages to its investors. The tribunal’s ruling that the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) excused exhaustion of local remedies affects investors and states under that treaty.
Background
Próspera is a private, U.S.-backed charter city project on the Honduran island of Roatán. It was built under Honduras’s 2013 ZEDE (Zona de Empleo y Desarrollo Económico) law. That law allowed semi-autonomous special economic zones with their own courts, regulations, and taxation. After a change of government, the Honduran Congress repealed the ZEDE legal framework in 2022. The Próspera developers say the repeal destroyed a business built on that regime’s guarantees.
The claimants are Honduras Próspera Inc., St. John’s Bay Development Company LLC, and Próspera Arbitration Center LLC, entities tied to the project and its founders. On September 16, 2022, they served notice of intent to arbitrate under the investment chapter of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). On December 19, 2022, they filed a request for arbitration with the International Centre for Settlement of Investment Disputes (ICSID), registered as ICSID Case No. ARB/23/2. The claimants originally sought more than $10.7B, an amount widely reported as roughly two thirds of Honduras’s annual GDP.
Honduras contested the tribunal’s jurisdiction on several grounds, including failure to exhaust local remedies. It denounced the ICSID Convention in 2024, citing this and other investor claims as a reason. It also proposed disqualifying the arbitrator appointed by the claimants, but the Chair of the ICSID Administrative Council dismissed that proposal on August 7, 2024. In February 2025, the tribunal rejected Honduras’s preliminary objections. It found that CAFTA-DR’s parallel-litigation waiver provision excused exhaustion of local remedies and that pursuing them would have been futile in any event.
In October 2025, the claimants filed their memorial on the merits, seeking restitution and, in the alternative, about $1.63B in damages plus $1M for moral harm. The tribunal declined Honduras’s request to bifurcate the proceeding on March 19, 2026, and ruled on amicus curiae applications on May 6, 2026, inviting non-disputing party submissions. After a change of government, Honduras rejoined the ICSID Convention with effect from August 16, 2026. On September 26, 2026, the tribunal admitted four amici curiae: a think tank, two indigenous community advocacy groups, and a sustainable investment researcher. The amici filed their written submissions on October 7, 2026, and the arbitration continues on the merits with no award issued.
Timeline 13 events
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FilingApproved amici file written submissions in Próspera arbitration
The four non-governmental organizations granted amicus curiae status on September 26, 2026, filed their written submissions under CAFTA-DR Article 10.20.3 and ICSID Arbitration Rule 67.
Case Details - Honduras Próspera Inc. et al v. Republic of Honduras (ICSID Case No. ARB/23/2)Honduras Próspera v. Honduras, Procedural Order No. 8, 9 Sept 2026
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OrderTribunal grants four amicus curiae applications
The ICSID tribunal admitted a think tank, two indigenous community advocacy groups and a sustainable investment researcher as amici curiae, allowing them to file submissions on the $1.63B claim.
Concerned Parties May Weigh In On Charter City's $1.6B Claim Against HondurasICSID tribunal in Próspera v. Honduras allows four amicus submissions
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OrderHonduras’s ICSID re-accession takes effect
Honduras’s return to the ICSID Convention, ratified after a change of government, took effect, reversing its 2024 denunciation that was driven partly by this case.
Honduras Rejoins ICSID, Deepening Exposure to Multi-Billion Dollar Claims
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OrderTribunal rules on amicus curiae applications and invites submissions
The tribunal issued Procedural Order No. 7 on applications to intervene as amicus curiae, inviting non-disputing party submissions under CAFTA-DR.
[Updated] ICSID tribunal in Prospera v. Honduras invites amicus curiae applications under DR-CAFTAProcedural Order No. 7 (On Applications to Intervene by Amicus Curiae)
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OrderTribunal declines to bifurcate the proceeding
The tribunal issued Procedural Order No. 6, declining Honduras’s request to bifurcate the arbitration into separate jurisdiction and merits phases.
ICSID tribunal declines to bifurcate Prospera v. Honduras arbitrationProcedural Order No. 6 (Decision on Bifurcation)
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FilingClaimants file memorial, cut alternative damages claim to $1.63B
In their memorial on the merits, the claimants sought restitution as their primary remedy. In the alternative, they quantified damages at about $1.63B, 85% below the original $10.775B claim, and sought $1M for moral harm.
Próspera reduce a $1,630 millones su reclamo contra Honduras ante el CiadiHonduras Prospera Inc Clarifies Information on ICSID Arbitration CasePróspera Critics Allege Modern Coup Against HondurasClaimants' Memorial on the Merits, Oct 15, 2025 (PDF)
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OrderTribunal dismisses Honduras’s exhaustion-of-local-remedies objection
The tribunal issued its Decision on Preliminary Objections under CAFTA-DR Article 10.20.5. It found that the treaty’s parallel-litigation waiver excused exhaustion of local remedies and that pursuing local remedies would have been futile in any case.
Analysis: ICSID tribunal finds that Honduras waived exhaustion of local remedies requirementDecision on the Respondent's Preliminary Objections Pursuant to CAFTA-DR Article 10.20.5
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OrderTribunal rejects early amicus applications
The tribunal issued Procedural Order No. 3, rejecting non-disputing parties’ initial applications to intervene as amicus curiae as unhelpful to the preliminary objections then before it.
ICSID tribunal in Prospera v. Honduras rejects non-disputing parties' applications
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OrderTribunal issues Procedural Order No. 1
The tribunal composed of Juan Fernández-Armesto, David W. Rivkin and Raúl E. Vinuesa issued its first procedural order setting the framework for the case.
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OrderICSID Chair dismisses disqualification bid against Rivkin
The Chair of the ICSID Administrative Council dismissed Honduras’s proposal to disqualify arbitrator David W. Rivkin, allowing the case to proceed with the original tribunal.
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OrderIndependent expert recommends dismissing bid to disqualify Rivkin
Pierre-Marie Dupuy issued a recommendation on Honduras’s proposal to disqualify claimant-appointed arbitrator David W. Rivkin, addressing whether he should be removed from the tribunal.
Recommendation of Pierre-Marie Dupuy Addressing the Proposal to Disqualify David W. Rivkin
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FilingClaimants file request for arbitration with ICSID
Honduras Próspera Inc., St. John’s Bay Development Company LLC, and Próspera Arbitration Center LLC filed their request for arbitration against Honduras, opening ICSID Case No. ARB/23/2.
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FilingClaimants file notice of intent to arbitrate
Honduras Próspera Inc. and affiliated entities served notice of intent to submit claims under Article 10.16 of CAFTA-DR, represented by White & Case LLP.
Notice of Intent to Submit Claims to Arbitration Pursuant to Article 10.16 of the CAFTA-DR
Experimental AI forecast
How it is madeWill the Próspera v. Honduras ICSID arbitration end in a settlement or discontinuance, or a final award, by September 30, 2028?
- Próspera and Honduras settle36%
- Still pending on September 30, 202832%
- Tribunal grants Próspera relief20%
- Tribunal dismisses Próspera’s claims12%
- Resolves by
- Sep 30, 2028in 23 months
- Record confidence
- Medium
Settlement or discontinuance is the most likely result by September 30, 2028, at 36%. Honduras’s new government rejoined ICSID, and Próspera’s claim was cut to $1.63 billion. Both signal room for a deal, but the merits schedule could still push any award past the deadline.
How it resolves. Resolves “settle” if, by September 30, 2028, ICSID records or party statements show the case was discontinued, settled, or suspended under an announced settlement. Resolves “relief” if the tribunal issues an award granting Próspera any damages or restitution. Resolves “dismisses” if the award declines jurisdiction or rejects all claims. Resolves “pending” if none of these has occurred by that date. Annulment proceedings after an award do not change the result.
Reasoning
Starting point. ICSID treaty arbitrations at the merits stage after preliminary objections are rejected: About 30% to 35% of ICSID cases settle or discontinue. Investors win some damages in roughly half of merits awards. Median duration is about four years.
About a third of ICSID cases settle or discontinue, and investors recover something in roughly half of merits awards. Posture favors Próspera on procedure. The tribunal rejected Honduras’s preliminary objections, denied bifurcation, and the disqualification bid failed. Honduras’s re-accession to ICSID after a change of government suggests a more investor-friendly policy, which raises settlement odds. The claimants’ 85% cut in quantified damages and their primary request for restitution give both sides a negotiating path. Against that, no hearing date is on record. Amicus submissions just arrived, so a hearing may come in 2027 and an award 12 to 18 months later. That leaves a large chance the case is still open on September 30, 2028. If an award issues, an investor win is more likely than a dismissal given the posture, though open jurisdiction issues and causation remain real defenses. The October 7, 2026, amicus filings were expected procedural steps and moved no outcome by five points.
Honduras’s new government rejoined ICSID, signaling openness to resolution · No hearing date on record, so award timing is uncertain · Preliminary objections and bifurcation rejected, favoring Próspera · Reduced $1.63 billion claim and restitution request ease settlement · Political sensitivity of ZEDEs and indigenous amici raise settlement costs
Generated automatically by Claude Opus 5.5 on Oct 14, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made