Venezuela Holdings v Venezuela - ICSID Case No. ARB/07/27 - Decision on Annulment - Spanish - 9 March 2017
Country
Year
2017
Summary
Reproduced from www.worldbank.org/icsid with permission of ICSID. (Document, does not apply to summary and/or TDM IACL Case Report below).
Case Report (free download)
Case Report by Puneeth Ganapathy, Editor Diego Luis Alonso Massa
Summary
An ad hoc ICSID annulment Committee ruled on the application made by the Republic of Venezuela ('the Applicant') seeking the annulment of the award of damages made in the arbitral proceedings between Venezuela Holdings B.V. et al. ('Mobil') and the Bolivarian Republic of Venezuela.
The Applicant raised three broad grievances against the aforementioned award, invoking grounds under Art 52 (1(b), (d) and (e)) of the ICSID Convention. The Applicant argued that first, the award was to be annulled as the tribunal had erred in exercising jurisdiction despite the alleged 'abusive' restructuring employed by Mobil to gain access to ICSID arbitration. This grievance was raised in terms of two grounds, viz. 'manifest excess of powers' and 'failure to state reasons'. Second, that the order of the tribunal denying Mobil's application regarding document production constituted a 'serious departure from a fundamental rule of procedure'. Third, that the award in relation to the Cerro Negro Project had not adequately considered the special agreement between parties regarding compensation. This ground was canvassed in terms of both, 'manifest excess of powers' and 'failure to state reasons'.
With respect to the first two grievances, the Committee rejected the application for annulment. It found there to be no failure to state reasons or a manifest excess of powers with respect to the tribunals analysis of the issue concerning abuse of process and corporate restructuring. Regarding the non-production of certain documents, the tribunal stated that an annulment Committee could not judge the exercise of a discretionary power of the tribunal, and that in any case this was irrelevant, since there was no demonstrable harm caused from the non-production of the relevant documents.
On the issue of the damages calculation, the Committee found merit in the application and annulled the relevant parts of the award that errantly dealt with damages relating to the Cerro Negro Project. The Committee held that the tribunal's reasoning and analysis was unclear and that it did not consider or comprehend the principal submission of the Applicant regarding the calculation of damages being limited by agreement between parties. The Committee accordingly allowed the application for annulment in relation to this grievance on account of both 'manifest excess of powers' and 'failure to state reasons'.
Main issues
Applicable law, Compensation, Custom, Damages, Limitation of Liability
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