World Bank scraps order for Venezuela to pay $1.4 billion

WASHINGTON: 

A World Bank panel has overturned part of a ruling ordering Venezuela to pay $1.4 billion to ExxonMobil in compensation for nationalising a company project 10 years ago.

In an 85-page ruling, the Washington-based International Centre for Settlement of Investment Disputes (ICSID) agreed with Venezuela’s argument appealing the amount of compensation to the US oil giant, and overturned that part of its 2014 decision.

The ICSID ruling was dated Thursday, but was released on Friday.

ExxonMobil originally had sought $12 billion in compensation over the loss of what it said it had already invested and what it expected to reap from the Cerro Negro project, which was nationalised in 2007.

In October 2015, the three-member ICSID arbitration panel rejected ExxonMobil’s arguments that Venezuela’s action represented an illegal expropriation, but awarded the company payment as “just compensation” under an international investment treaty.

The ruling released on Friday cancels the portion of the original award that dealt with compensation for the Cerro Negro project.

“As far as we know, this is the largest annulment in ICSID history,” said George Kahale III, who represented Venezuela.

ExxonMobil did not immediately respond to AFP requests for comment.

Published in The Express Tribune, March 12th,2017.