Vannessa Ventures Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)04/6
ICSID · Investment (ICSID and treaty) · Venezuela · 16 Jan 2013
Why it matters
This award is notable for its detailed analysis of the 'in accordance with host State law' requirement in BIT definitions of investment. The Tribunal joined the legality objection to the merits, ultimately finding that the investment was not made in accordance with Venezuelan law, thus denying protection. It also clarified the high threshold for finding a denial of justice or violation of fair and equitable treatment due to judicial delays.
Summary
Vannessa Ventures Ltd., a Canadian company, brought an ICSID claim against Venezuela under the Canada-Venezuela BIT, alleging expropriation and unfair treatment regarding its investment in the Las Cristinas gold and copper mining project. The project was originally owned by Placer Dome, which entered into a joint venture with Venezuela's state-owned CVG. Vannessa acquired Placer Dome's shares in 2001. Venezuela argued that the acquisition violated Venezuelan law, including public procurement rules and Decree 2095 on mining concessions. The Tribunal first decided on jurisdiction, joining the legality objection to the merits. On the merits, the Tribunal found that Vannessa's acquisition of shares was not 'in accordance with the laws of Venezuela' as required by Article 1(f) of the BIT, because the transfer of shares was subject to restrictions under Venezuelan contract law and public policy, and Vannessa failed to obtain necessary approvals. Consequently, the investment was not protected under the BIT. The Tribunal also rejected claims of expropriation, fair and equitable treatment, and full protection and security, finding no violation. The award was unanimous on the merits, with a majority on jurisdiction. The case illustrates the importance of complying with host state law when making an investment under a BIT.
The detail
Parties: Vannessa Ventures Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)04/6
Case number: italaw/cases/1146
Outcome: The Tribunal dismissed all of Claimant's claims under the Canada-Venezuela BIT. Each party bears its own costs and half of the Tribunal and ICSID costs.
Applicable law: Canada-Venezuela BIT (1996); ICSID Additional Facility Rules; Venezuelan law
Issues in play: The case involved the definition of 'investment' under the BIT, specifically whether the claimant's acquisition of shares complied with Venezuelan law (Article 1(f) of the BIT). Also at issue were expropriation, fair and equitable treatment, and full protection and security standards.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.