Wednesday April 14, 2021
  • Venezuela
  • Mexico
  • Colombia
  • Chile
  • Brazil
  • Argentina
  • Podcast
Versión Español
PanAm Post
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact
No Result
View All Result
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact
No Result
View All Result
PanAm Post
No Result
View All Result

Home » US Federal Court Declares Venezuela in Default over $740 Million Claim

US Federal Court Declares Venezuela in Default over $740 Million Claim

Pedro García Otero by Pedro García Otero
April 2, 2015

Tags: ICSID
0
0
SHARES
0
VIEWS
FacebookTwitterTelegramWhatsapp

EspañolThe US Federal District Court for the District of Columbia has entered a default ruling against Venezuela, after the South American country failed to respond in time to a demand introduced by Gold Reserve Inc. The Canadian gold mining firm is seeking to confirm a US$740 million arbitration made in its favor by the International Center for Settlement of Investment Disputes (ICSID) over the expropriation of its operations in Venezuela in 2008.

The Venezuelan defense has entered a plea for the court to request annulment of the ruling, after it failed to present any document in its defense in the 60 days given by the ICSID. Gold Reserve subsequently presented its counterarguments in March 30, and the court is to deliver a ruling “in the near future.”

RelatedArticles

Three Signs That Elon Musk Has the World at His Fingertips

Trump Against Suppression of Human Rights

February 1, 2021
Three Signs That Elon Musk Has the World at His Fingertips

15 Republicans Who Voted Against Trump Are Already Facing the Consequences

February 1, 2021
The nationalizing of gold mining projects in Venezuela has left investors in limbo.
The nationalizing of gold mining projects in Venezuela has left investors in limbo. (Oroyfinanzas)

Gold Reserve filed the claim against Venezuela on November 26, 2014, but there was no response from legal representatives from the country since then, according to news portal Business Wire, until the Venezuelan Foreign Ministry responded with a letter in late January raising “non-meritorious and irrelevant” objections.

Doug Belanger, president of Gold Reserve, stated that “this is another example of Venezuela being dilatory in its actions regarding the payment of the award.”

“The company will continue to pursue the collection of our award in a systematic and methodical way until Venezuela realizes that its needs to stop avoiding its international obligations and pay the award, sooner rather than later,” he added.

In 1992, the company acquired and began to develop the gold and copper mine now known as Proyecto Brisas. According to Gold Reserve, the mine contains 10.2 million ounces of gold and 1.4 billion pounds of copper.

In 2008, the Venezuelan government “arbitrarily revoked” Gold Reserve’s concession after it had already invested some $300 million in developing the site. The company introduced a demand before the ICSID and in September 2014 received a compensation order, which was ratified in December, despite Venezuela’s legal representatives refusing to accept service.

How Much Does Venezuela Owe?

Venezuela’s policy of expropriating private firms under the government of Hugo Chávez, especially during the 2007-2013 period, has led to massive international rulings by the ICSID, of which Venezuela is a member, just as Chávez’s successor President Nicolás Maduro faces a severe economic crisis due to the collapse of global petroleum prices.

Firms have filed 27 claims against Venezuela in the ICSID, making it the country with the most cases pending in the international tribunal. Five have already been resolved, involving a total payment of $2.12 billion.

After paying Exxon Mobil $747 million, the country will still owe $853 million, including the money it owes to Gold Reserve, and compensation for Chilean firm IDC to the tune of $33 million over the abrupt cancellation of its contract to operate an airport on Isla de Margarita in the Venezuelan Caribbean. US bottling firm Owens Illinois is expecting US$454 million after Chávez nationalized its operations on his Sunday television program, and an $46 million award to petroleum services firm Tidewater has already been ratified.

The demands are mounting still further. Adding to the total are US petroleum firm Conoco Phillips, which introduced a demand for $31 billion over the nationalization of its operations in the Orinoco oilfield (now renamed the Orinoco Hugo Chávez Oil Field).

Gold mining firm Rusoro has similarly presented a demand for $3.3 billion, and Argentina’s Grupo Techint has produced another for the nationalization of its operations in the steel sector. The total amount to be paid by Venezuela as a result of its nationalization policy, after negotiations with overseas claimants, could reach $20 billion.

Although Venezuela communicated to the World Bank in 2012 its withdrawal from the ICSID, those demands presented up until that point continue to be enforced by the institution.

Venezuelan Vice Attorney General Reinaldo Muñoz complained to state media that the ICSID rulings “seek to present Venezuela as an insolvent state with many debts to pay,” and that “these judgements are accelerating to give the impressions of a failed state with lots of debts.”

Nevertheless, Venezuela is not facing pressure to repay what it owes through ICSID alone.

Although Caracas was able to cancel its first quarter commitments to its international creditors, it’s debt to national and international private companies (over $13 billion) has led to a range of negative consequences. The supply of foodstuffs and medicines has been restricted, leading Venezuelans to line up around the block outside stores. Airlines are owed almost $3.5 billion, meaning air passengers can only pay for flights in dollars, and Venezuela’s debt to China is close to $50 billion.

The Venezuelan government’s total debt is some $125 billion, with the debt contracted by state petroleum firm PDVSA amounting to an additional $50 billion.

Venezuela will have to pay $25 billion just to service these commitments in 2015. “The government has a cash deficit that it can’t deal with, and it’s playing for time with counter-claims and temporary payments,” Venezuelan economist Asdrúbal Oliveros signaled.

Translated by Laurie Blair.

Tags: ICSID
Previous Post

Mexico’s Century of Crony Capitalism

Next Post

The Rise of Bitcoin in Argentina

Pedro García Otero

Pedro García Otero

Pedro García is the Spanish managing editor of the PanAm Post. He is a Venezuelan journalist with over 25 years of experience in local newspapers, radio, television, and online media.

Related Posts

Three Signs That Elon Musk Has the World at His Fingertips
Columnists

Trump Against Suppression of Human Rights

February 1, 2021
Three Signs That Elon Musk Has the World at His Fingertips
News

15 Republicans Who Voted Against Trump Are Already Facing the Consequences

February 1, 2021
Three Signs That Elon Musk Has the World at His Fingertips
Analysis

Three Signs That Elon Musk Has the World at His Fingertips

February 1, 2021
Three Key Moments to Remind Us That the UN Is a Nest of Oppressive Regimes
Analysis

Antiracist Baby: Netflix Series Loaded with Racially Indoctrinating Children

January 29, 2021
Three Key Moments to Remind Us That the UN Is a Nest of Oppressive Regimes
Asia

Chinese Regime Silences Relatives of COVID-19 Fatalities During WHO Visit

January 29, 2021
Three Key Moments to Remind Us That the UN Is a Nest of Oppressive Regimes
Analysis

Three Key Moments to Remind Us That the UN Is a Nest of Oppressive Regimes

January 29, 2021
Next Post
The Rise of Bitcoin in Argentina

The Rise of Bitcoin in Argentina

Discussion about this post

Subscribe free and never miss another breaking story

  • Venezuela
  • Mexico
  • Colombia
  • Chile
  • Brazil
  • Argentina
  • Podcast

© 2020 PanAm Post - Design & Develop by NEW DREAM GLOBAL CORP. - Privacy policy

No Result
View All Result
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact

© 2020 PanAm Post - Design & Develop by NEW DREAM GLOBAL CORP. - Privacy policy

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Privacy and Cookie Policy.