Tag Archives: arbitration

Jan
27
2012
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In Case You Missed It… Articles Roundup Week of 1/27/12

In this week roundup: Leopoldo López withdraws from the Venezuelan opposition primaries and throws his support behind frontrunner Henrique Capriles Radonski, a man who TIME speculates may be the one to defeat Hugo Chávez this fall. Meanwhile, Chávez formally requests to leave the World Bank’s international arbitration forum; rampant crime further dampens Venezuela’s business climate; rumors persist that Chávez has less than a year to live; and finally, President Chávez’s daughter ignites a social media uproar by posting a picture of herself posing with a wad of dollar bills.

And then there were five, The Economist

The campaign to decide who will square off against Hugo Chávez in Venezuela’s October presidential election has, for the most part, been as dull as ditchwater. With all six contenders vowing to support the opposition Democratic Unity (MUD) alliance and unite behind the victor of the primaries scheduled for February 12th, mutual politeness has left many voters struggling to distinguish between one contender and another.

Venezuela Candidate Backs Rival, Pressuring Chávez, The Wall Street Journal

Venezuelan opposition leader Leopoldo López, who was among the three top contenders hoping to face President Hugo Chávez in October elections, withdrew from the primary field on Tuesday, saying he will back front-runner Henrique Capriles Radonski.

Capriles Radonski and the New Venezuelan Opposition, Foreign Affairs

In October, Venezuelans will head to the polls for the fourth presidential vote since Hugo Chávez took power in 1999. With the announcement earlier this week by Leopoldo López that he is ending his candidacy and throwing his support to Henrique Capriles Radonski, the young and charismatic governor whom many expect to be Chávez’s main contender, the opposition is gradually consolidating its power.

Candidate Capriles: Could This Man Defeat Venezuela’s Hugo Chavez?, TIME

To explain why left-wing Venezuelan President Hugo Chávez has stayed in power for 13 years, fans and foes alike point out that he controls the western hemisphere’s largest oil reserves. But he’s also been blessed with what is arguably the most incompetent political opposition in Latin America.

Venezuela Formally Requests Exit From Arbitration Court, Bloomberg Businessweek

Venezuela’s government officially requested to leave the World Bank’s arbitration court yesterday as demands pile up from abroad for compensation following a decade of nationalizations under President Hugo Chavez.

HRW: Global community should oversee Venezuela’s election campaign, El Universal

The global community is strongly recommended to oversee the whole process of the election for president in Venezuela to ensure that in the event of voting results not favorable to the government of President Hugo Chávez, the “politicized” armed forces and the judiciary will be “forced” to accept the results, HRW said on Monday.

Venezuela Rebuffed by U.S. High Court on Bandagro Bond Suit, Bloomberg

The U.S. Supreme Court refused to block an Ohio investor group from suing Venezuela over potentially $900 million in bank notes that the South American country says are forgeries.

Venezuela: counting the cost of crime, The Financial Times

It is no secret that Venezuela is hardly the most business friendly country in the world, with a president who habitually takes pleasure in grabbing private property, while a maze of government regulations act as an added deterrent.

Chavez still battling cancer, Spanish newspaper says, CNN

Cancer has spread in Hugo Chavez’s colon, spine and bones, and the Venezuelan president could have only nine months to live, Spain’s ABC newspaper reported Monday, citing medical records provided by unidentified intelligence sources.

Hugo Chavez’s daughter Rosines sets off furor of social media mockery, The Washington Post

For most Venezuelans, obtaining U.S. dollars in a tightly regulated economy is a nightmare. Apparently not for President Hugo Chavez’s 14-year-old daughter, Rosines, who posted a picture of herself holding a wad of greenbacks.

 

 
Jan
17
2012
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ICYMI: Venezuela Tightens Control of Oil Industry

Venezuela tightens control of oil industry

Financial Times

By Benedict Mander in Caracas and Sylvia Pfeifer in London

Venezuela has made another push to increase control over its oil industry, announcing plans to leave the World Bank’s international arbitration body and potentially putting billions of dollars of foreign investment at risk.

Rafael Ramírez, the country’s oil minister, at the weekend confirmed plans to settle disputes with foreign companies within its own judicial system. The decision would affect more than 20 foreign companies that have unsettled disputes after private sector assets were expropriated by Venezuela’s socialist government as part of a drive to increase its control over so-called “strategic” industries that began in 2006. Analysts have estimated the outstanding compensation claims, largely by industrial groups including oil, could add up to as much as $40bn.

The decision could also undermine investor confidence in the country whose natural assets have attracted some of the world’s leading oil and gas groups, including Europe’s Repsol, ENI, and Statoil, as well as Chevron of the US. Despite tax increases and contract changes many companies have remained eager to invest in the country’s Orinoco extra heavy oil belt.

“The common sense approach would probably be one of wariness,” said an executive at one European energy group about the decision, declining to be identified.

“What is already a fairly complex process, looks like it will get even more so,” said Peter Hutton, analyst at RBC Capital Markets.

“We do not accept impositions and we are going to rescue our national sovereignty,” Mr Ramirez had said in a televised interview on Sunday, adding that Venezuela would seek to renegotiate dozens of international investment-related agreements.

The decision to withdraw from the International Centre for Settlement of Investment Disputes (ICSID), based in Washington, means that disputes with foreign companies, including an unsettled disagreement with ExxonMobil, will be heard by Venezuelan judges.

The news follows the announcement on January 1 of a settlement at the Paris-based International Chamber of Commerce (ICC) which awarded Exxon a net payment of only $747m, substantially less than the $6.5-7bn it was said to be seeking, after its assets in Venezuela were expropriated in 2007.

Venezuela appears to have accepted the ruling by the ICC, where only the contract was in dispute, but has said it will not respect any decision at the ICSID, where it is the violation of a bilateral investment treaty that is being disputed, which is far broader in scope.

At stake for Venezuela is the appetite of foreign oil companies to invest in extracting the extra-heavy crude from the Orinoco Belt. Venezuela’s proved oil reserves exceed 200bn barrels but it produces fewer than 3m barrels per day. With the help of foreign investment, Venezuela hopes to double production in the coming years. Exxon declined to comment on Monday. So did Total, Repsol and ENI.

Venezuela’s allies Bolivia and Ecuador also recently withdrew from the organisation. Argentina has so far remained within it, although industry-watchers pointed out that this has not prevented the country from disagreeing with ICSID rulings.

 
Jan
10
2012
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Chávez Threatens Pre-Emptive Strike on International Arbitration Body

In a move that may deprive businesses and investors of the most important international venue for securing compensation for expropriated property, Venezuelan President Hugo Chávez said Sunday that he “will not recognize” decisions issued by the World Bank’s International Center for the Settlement of Investment Disputes (ICSID). The announcement bodes ill for Exxon Mobil, Helmerich & Payne and many other companies that have seen their Venezuelan assets seized by the Chávez government.

“We have to get out of that ICSID. And I’ll go ahead and say it: We won’t recognize any of ICSID’s decisions,” Chávez said in a television address.

Disavowing ICSID’s authority will be difficult, as multiple treaties that bind Venezuela to the court remain in force. Experts have also suggested that rejecting the body’s rulings could hurt Venezuela’s ability to obtain credit as well as prompt companies to freeze Venezuela’s foreign assets. Nonetheless, a defiant Chávez said he will not recognize the panel’s rulings and may withdraw Venezuela from the forum altogether.

In his announcement, Chávez referred to a $900 million award that Exxon Mobil recently won in another arbitration case before the International Chamber of Commerce. ExxonMobil is one of more than a dozen companies seeking compensation from Venezuela before the ICSID, which is considered the world’s preeminent forum for settling disputes between investors and sovereign states. The Caracas-based consulting firm Ecoanalítica estimates that the Chávez government has nationalized more than $33.7 billion in assets from private companies.

Chávez’s announcement suggests that companies seeking compensation from Venezuela have a difficult road ahead, including U.S. firms like Oklahoma’s Helmerich & Payne and Ohio-based bottle maker Owens Illinois, which have filed legal claims against Venezuela.

Chávez, who often offers nationalized companies little to no compensation, has ramped up expropriations over the past years. There are currently 17 pending cases against Venezuela before ICSID. If the government follows through with Chávez’s plan, all 17 may turn into protracted disputes that further blunt foreign investments in Venezuela and alienate the country from the international community.