Venezuela held liable in island airport claim

Venezuela held liable in island airport claim - Law firm features - Latin Lawyer
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Venezuela held liable in island airport claim
Wednesday, 26 November 2014 (Yesterday) by Kyriaki Karadelis
An ICSID tribunal has ordered Venezuela to pay around US$34 million to investors in a Caribbean island
airport after holding the state liable for expropriation and denial of justice.
In a Spanish-language award on 18 November, the tribunal
upheld claims brought by Swiss airport services company
Flughafen Zurich and its Chilean partner, Gestión e Ingenería
IDC, under Venezuela’s bilateral investment treaties with
Switzerland and Chile, as well as customary international law.
Credit: Puerto Cruz beach,
Margarita (Credit: Enano275)
Spain’s Juan Fernández-Armesto chaired the tribunal, which
also included Canada’s Henri Alvarez QC, appointed by the
claimants, and Argentine-Spanish arbitrator Raúl Vinuesa, who
was appointed by the state. Vinuesa issued a partial dissent .
The dispute dates back to 2005, when the government of the
Venezuelan state of Nueva Esparta cancelled the claimants’ contract to expand and run an airport on the island
of Margarita in the Caribbean Sea, and later took control of the airport facilities.
Following conflicting decisions by state and federal courts in Venezuela regarding the validity of the contract, the
matter came before Venezuela's Supreme Court, which ruled in 2009 that the management of the airport should
be put in the hands of the central government until the dispute was resolved by the federal courts, where the
matter is still pending.
The claimants turned to ICSID in 2010.
In last week’s award, Fernández-Armesto joined with Alvarez in concluding that Venezuela had committed a
direct expropriation under the BITs through the actions of the Nueva Esparta government and the Supreme
Court. The majority also concluded that the Supreme Court’s actions amounted to a denial of justice.
Vinuesa agreed in his dissent that the state was liable for expropriation but argued that this was consummated in
a 2009 decree by the central government putting the airport under state control. The Supreme Court’s actions
did not bring about the expropriation and also did not meet the high threshold for a denial of justice, he argued.
The tribunal unanimously ordered the state to pay over US$19 million plus interest from the date of the
cancellation of the contract in 2005. Chilean newspaper El Mercurio reports that the total damages and interest
amount to around US$34 million.
In addition, Venezuela has been ordered to pay US$2.4 million towards the claimants’ legal fees and
US$525,000 to cover their share of the arbitration costs.
The claimants were represented in the arbitration by Chilean law firm Bofill Mir & Alvarez Jana Abogados, with
the team led by partner Andrés Jana in Santiago.
Venezuela relied on Guglielmino & Asociados in Buenos Aires, the law firm set up by Osvaldo Guglielmino, the
former head of the Argentine government’s ICSID defence team, with the team including of counsel Diego Gosis
in Miami.
Venezuela initially appointed Arnold & Porter LLP in Washington, DC as counsel, but the firm ceased acting in
the case in 2011.
Flughafen Zürich AG and Gestión e Ingenería IDC SA v Bolivarian Republic of Venezuela (ICSID Case No
ARB/10/19)
http://latinlawyer.com/features/article/47583/venezuela-held-liable-island-airport-clai... 27-11-2014
Venezuela held liable in island airport claim - Law firm features - Latin Lawyer
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Tribunal
Juán Fernandez Armesto (Spain) (President)
Henri Alvarez QC (Canada)
Raul Vinuesa (Argentina)
Counsel to Flughafen Zurich and Gestión e Ingenería IDC
Bofill Mir & Alvarez Jana Abogados
Partners Ándres Jana and Rodrigo Gil and counsel Johanna Klein Kranenberg in Santiago
Counsel to Venezuela
Procuraduría General de la República in Caracas – procurador general Manuel Galindo
Guglielmino & Asociados in Buenos Aires (from late 2011)
Partner Osvaldo Guglielmino, international lawyer Facundo Pérez Aznar and of counsel Diego Gosis (who is
also of counsel at Gomm & Smith in Miami)
Arnold & Porter LLP in Washington, DC (until November 2011)
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