Court rules in favor of Cemex Venezuela trial

The court unanimously decided: Who has jurisdiction over claims filed by Cemex Cemex Caracas Caracas I and II as the same are based on alleged breaches of the Agreement on the Promotion and Protection of Investments held on October 22, 1991 between the United of the Netherlands and Venezuela.

Wednesday January 5, 2011 11:13 PM

. Mexico .- After two years of litigation in the international court of the World Bank, Cemex won the first "round" the government of Hugo Chávez for the expropriation of its cement plants in Venezuela, receiving a unanimous favorable decision for two companies established in the Netherlands, owned by Mexican cement giant, claiming violation of the investment protection agreement signed Venezuela and the Netherlands in 1991, according to review the web site El Semanario.

""The court (arbitration) unanimously decided (...) that has jurisdiction over claims filed by Cemex Cemex Caracas Caracas I and II as the same are based on alleged breaches of the Agreement on the Promotion and Protection of Investments held on 22 October 1991 between the Kingdom of the Netherlands and the Republic of Venezuela ", decided the International Centre for Settlement of Investment Disputes (ICSID).

. The ICSID is the World Bank tribunal rule that handles the differences between States and private investors in countries serve as foreign companies.

. The unanimous ruling "on jurisdiction" of Dutch companies owned by Cemex to demand protection agreement signed by Venezuela and the Kingdom of the Netherlands was issued on 30 December.

In August 2008, the "armed forces" of Venezuela took control of three of Cemex cement plants (and other Mexican assets) resulting from a decree of expropriation as well as the Mexican also affected the two largest cement World: France's Lafarge and Switzerland's Holcim.

In October 2008, the company "Cemex Caracas" which owned 75.7% of the shares of all assets in Venezuela, presented the request for arbitration at the ICSID, because Venezuela is not the company compensated for the assets nationalized.

According to the court's ruling, "the applicants (Cemex Cemex Caracas Caracas I and II) and indirect investors in Cemex Venezuela, did not have any investment in the territory of Venezuela that gave rise to the obligations allegedly breached by the Republic."

. Above, arguing that "Cemex Caracas I" was established in 1999 as a Besloten Vennootschap (BV) (limited liability company) in Holland. SAB. Firm is a wholly owned subsidiary of Cemex Spain, which, in turn, is an indirect subsidiary of Cemex SAB.

"Cemex Caracas II" was also incorporated in the Netherlands in 2001 as a BV, which is a wholly owned subsidiary of "Cemex Caracas I". Donde "Cemex Caracas II" es la propietaria del 100% de una empresa radicada en las Islas Caimán denominada Vencement Investments (Vencement), que a su vez es la propietaria del 75,7% de Cemex Venezuela (CemVen). Where "Cemex Caracas II owns 100% of a company based in the Cayman Islands called Vencement Investments (Vencement), which in turn owns 75.7% of Cemex Venezuela (CeMV).

However, before these arguments and invoking the jurisprudence of the International Court of Justice, also remember the military intervention of Germany, Italy and United Kingdom to Venezuela of the last century to ensure compensation to foreign creditors accepted the jurisdiction of the ICSID .

The tribunal was chaired by French Judge Gilbert as the Egyptian referee Georges Abi-Saab (appointed by Venezuela) and American Robert von Mehren (appointed by Cemex). Las audiencias se llevaron acabo en Washington, DC. The hearings were held in Washington, DC.

. Cemex seeks to dispute that the government of Hugo Chávez returns control of the company expropriated or payment for the expropriated assets, updated amount from the takeover to date of full settlement with an interest rate of not less than Libor. In 2008, some analysts estimate that Mexican Cemex's assets in Venezuela were worth 1,400 million dollars.

. He also hopes that the government of Venezuela to pay all costs associated with arbitration, including legal fees Cemex Caracas, experts' costs, administrative fees, and fees and expenses of the arbitral tribunal.

In this regard, last week the court noted that "it reserves all matters relating to costs and expenses of the Tribunal and the costs of the parties to be decided later."

Oh Boy! There goes Citco. GRZ looking preety damn good. How many more on the way? Chavez better be pumping more oil. OR, Mine the gold, pronto.