Who's suing Venezuela? A round-up of recent claims

September 05, 2012 10:35 AM

In the past month severla new ICSID claims have been registered against Venezuela– including one arising from an impromptu expropriation announced by President Hugo Chávez during a live television broadcast.

Two Venezuelan glass companies, Fábrica de Vidrios Los Andes and Owens-Illinois de Venezuela, saw their claim registered on 10 August. They were the owner-operators of two large bottle-manufacturing plants that were expropriated in October 2010.

President Chávez announced the expropriation live on television. The clip is viewable on YouTube.

The companies' majority shareholder, a Dutch subsidiary of US bottlemaker Owens Illinois, is pursuing a separate ICSID claim over the same affair, lodged last September.

Both claims are under the Netherlands-Venezuela bilateral investment treaty, which extends to non-Dutch companies that are under Dutch control. The claimants are using the same counsel in both cases – Volterra Fietta in London and Latham & Watkins LLP in the US.

Another claim under the same BIT by Dutch entity Venoklim Holding was registered on 15 August. This too stems from an October 2010 expropriation – this time of a motor lubricant producer, Venoco.

The company, which operates the country's largest petrochemicals plant in Guacara, has continued to use the Venoco name but is now controlled by state-owned petrochemicals company Pequiven and national oil company PDVSA.

Local press reports suggest Venoklim is controlled by Venezuelan businessman Franklin Durán, a former co-owner of Venoco who is serving a four-year prison sentence in the US after being convicted in 2008 of conspiring to act as an unregistered agent of the Venezuelan government.

Durán was accused of attempting to cover up the “suitcase scandal”, in which Buenos Aires airport staff intercepted a bag containing US$800,000 in cash from Venezuela, which US prosecutors said was intended to help fund the 2007 presidential campaign of Cristina Fernández de Kirchner.

Durán recently asked a US appeal court for a retrial on the grounds that the US government proffered false testimony from a key witness – his former business partner in Venoco and alleged co-conspirator, Carlos Kauffmann – but the request was denied last month.

Venoklim has instructed Colombian firm Jiménez & Liévano Abogados for the ICSID claim.

Luxembourg-based steel pipe manufacturer Tenaris and its Portuguese subsidiary, Talta, have also filed an ICSID claim against Venezuela, registered on 21 August – the second claim they have brought against the state in the past year.

The earlier claim, registered in September, is under Venezuela’s BITs with Portugal and the Belgium-Luxembourg Economic Union, and concerns the expropriation of a hot briquetted iron producer in Bolívar state, known as Matesi. A tribunal comprising ICC Court chairman John Beechey as president, US arbitrator Judd Kessler and British barrister Toby Landau QC is hearing that dispute.

The new claim relates to two other steel-sector expropriations, namely the Venezuelan steel producer known as Tavsa, and another hot briquetted iron producer known as Comsigua. Freshfields Bruckhaus Deringer LLP is acting for the claimants in both cases, along with Argentina’s Mitrani Caballero Ojam & Ruiz Moreno and Venezuela’s D’Empaire Reyna Abogados. Venezuela instructed a team from Foley Hoag for the claim filed last year, but the firm did not respond to an inquiry about their possible instruction in the second case.

Although the state's withdrawal from ICSID took effect on 25 July, the centre has so far registered eight cases that were filed but not processed before the deadline. Latin Lawyer has previously reported on five of these, brought by Barbadian car import business investor Transban, Barbadian cable-car investor Blue Bank, Luxembourgish steelmaker Ternium, Spanish banking investor Valle Verde and Canadian mining company Rusoro.

Venezuela now has 28 claims pending at ICSID, the largest number of any state. In second place is Argentina, with 22 pending cases.

Fábrica de Vidrios Los Andes CA and Owens-Illinois de Venezuela CA v Bolivarian Republic of Venezuela (ICSID Case No. ARB/12/21)

Counsel to Fábrica de Vidrios Los Andes and Owens-Illinois de Venezuela

Volterra Fietta
 
Partners Stephen Fietta and Robert Volterra, with associate Ernesto Feliz in London

Latham & Watkins LLP
 
Partner Doug Freedman in Chicago and associates Michelle Bradfield and Lucas Bastin in London
 
Counsel to Venezuela

Procuraduría General de la República in Caracas
 
Venoklim Holding BV v Bolivarian Republic of Venezuela (ICSID Case No. ARB/12/22)
 
Counsel to Venoklim Holdings

Jiménez & Liévano Abogados
 
Counsel to Venezuela

Procuraduría General de la República in Caracas
 
Tenaris SA and Talta - Trading e Marketing Sociedade Unipessoal Lda v Bolivarian Republic of Venezuela (ICSID Case No. ARB/12/23)
 
Counsel to Tenaris and Talta

Freshfields Bruckhaus Deringer LLP - Partner Nigel Blackabyand associate Caroline Richardin Washington, DC; counsel Lluis Paradell in Rome

Mitrani Caballero Ojam & Ruiz Moreno - Partner Cristian Mitrani in Buenos Aires

D’Empaire Reyna Abogados - Partners Fulvio Italiani and Jose Humberto Frias and associate Manuel Casas in Caracas
 
Counsel to Venezuela

Procuraduría General de la República in Caracas

(Source: LatinLawyer)

Note: The Dutch subsidiary of Owens-Illinois is OI European Group B.V.