- South American Oil Nations Rejecting Arbitration Pacts
- February 18, 2015
- Law Firm: Sally Fitch LLP - Boston Office
Businesses with global aspirations depend on international arbitration venues to ensure that their investments have a stable foundation. Knowing where and under what rules commercial disputes with foreign contractors or vendors will be resolved can help a business assess risks with better accuracy.
This is true whether the dispute is with a company in the U.S., China, the European Union or the Middle East. For suppliers, manufacturers and contractors who do business in South America, recent news regarding Argentina and Venezuela has presented some questions about the dependability of arbitration agreements with parties in Caracas, Buenos Aires and other cities.
Venezuela announced earlier this year that it would withdraw from the International Center for Settlement of Investment Disputes (ICSID), the World Bank's international arbitration body based in Washington, D.C. President Hugo Chavez said in January that the Venezuelan government will ignore future decisions involving business disputes that arise in his country, citing Venezuelan sovereignty.
Legal commentators have noted the financial value of many disputes currently before the ICSID involving Petroleos de Venezuela, the country's national oil company. An ISCID arbitration between Petroleos and Mobil that was filed in 2007 involved a damages claim of $12 billion for government appropriation of assets during Venezuela's period of nationalization.
Only Argentina, which has also refused to pay on any ICSID judgments, has more cases pending before the international commercial disputes tribunal. One common thread: Spanish oil company Repsol has been unable to collect on a $10.5 billion judgment against the Argentine government for asset seizures.
Advising Business Clients About International Commercial Disputes, Whatever the Stakes
For most enterprises that do business around the globe, the amount of disputed losses does not start with a "B," but their interests are just as vital. Whether a client needs to review the terms of a contract with an international business lawyer or seeks the services of a litigator to handle an appeal of a judgment in the courts of another country, access to dependable forums for dispute resolution is the keystone of effective commerce.