Reproduced from www.worldbank.org/icsid with permission of ICSID.
I. Procedural Background
1. On 16 December 2019, the Centre wrote to the Parties in reference to "the Application for Annulment submitted by Mr. George Kahale on November 27, 2019, and by Dr.
Alfredo De Jesús O. on December 5, 2019, on behalf of the Bolivarian Republic of Venezuela." The Parties were informed that the Secretary-General "registered an Application for Annulment of the Award rendered on March 8, 2019" and that, pursuant to ICSID Arbitration Rule 54(2), "the enforcement of the Award [was] provisionally stayed" as requested by Venezuela.1
2. On 3 February 2020, the Committee was constituted, and the Parties were informed that the annulment proceedings were deemed to have begun.
3. On 4 February 2020, the Respondents on Annulment (hereinafter the "Conoco Parties"
or the "Claimants") opposed to Venezuela's request to continue the stay of enforcement.
4. On 18 February 2020, the Committee fixed 16 March 2020 for Venezuela's response on the stay of enforcement of the Award. The Parties were also informed that pursuant to Arbitration Rule 54(2), the Committee extended the stay of enforcement until the Committee had heard the Parties and it is in a position to reach a final determination on this matter.
5. On 16 March 2020, De Jesús and Curtis submitted each a response on Claimants' Opposition to Venezuela's request to continue the stay of enforcement of the Award.
6. Having considered the Parties' positions, the Committee invited the Parties on 3 April 2020 to elaborate upon the following six matters by 14 April 2020:
1) Have the Conoco Parties and Venezuela had any contact regarding the enforcement of the Award? What enforcement actions (if any) did the Conoco Parties take after the Award was rendered until enforcement was stayed by the Secretary-General of ICSID upon registration of the Application for Annulment? What are the prospects of enforcing the Award outside the United States?
2) Can any non-compliance be directly linked to economic difficulties and/or the US sanctions? Is this relevant for purposes of the Committee's decision on whether to maintain or lift the stay of enforcement of the Award?
3) What would be the specific prejudice of deferring enforcement of the Award to a later date having regard to Venezuela's alleged refusal or inability to honour any award presently and to the freezing of its assets in the US? Are there other creditors that enjoy priority of payment over the Conoco Parties?
4) What steps have the Conoco Parties taken to obtain such license and what is the likelihood that they may be granted one soon? What effect, if any, can have such sanctions on the Conoco Parties' ability to return any funds paid on the Award if annulled? Would the Conoco Parties be willing to give an undertaking that all amounts recovered as a result of enforcement actions will be placed in escrow or with a trustee that is not subject to the sanctions for the duration of the annulment proceedings?
5) What would be the precise impact of the Award's enforcement on Venezuela's State budget? What efforts, if any, has Venezuela taken to restructure its debt and how can this have an effect on Venezuela's ability to pay awards rendered against it?
6) What is the financial situation of the Conoco Parties at present? How does the outcome of this proceeding affect the Conoco Parties' accounts?
67. The Committee decides to discontinue the stay once it has been satisfied that all assurances have been given by the Conoco Parties that, should enforcement of the Award be possible under the OFAC sanctions regime, it can return any money collected under the Award to Venezuela in case of annulment. In fulfilment of this objective, the Committee requests that the Conoco Parties provide:
1) the authorization from OFAC to pay any amounts recovered into a segregated account and to repay any funds paid on the Award if annulled, and
2) the conditions for opening one or more segregated accounts for the funds collected outside of the US, and
3) a guarantee from ConocoPhillips that it will return to Venezuela any funds paid under the Award.
68. The Committee accepts that the authorizations from OFAC be submitted in redacted form.
69. All questions concerning the costs and expenses of the Committee and of the Parties in connection with this application are reserved for subsequent determination, together with the Application for Annulment.
Professor Diego Fernández Arroyo
Mr. Kap-You (Kevin) Kim
Judge Dominique Hascher