Betancourt said arbitration cases initiated in the ICSID must continue its course and "the state should enforce the arbitration awards, but as sovereign, may invoke the impossibility of complying with the ruling."

He noted that most of them are related "expropriated or what they call nationalization", as in the case of Cemex or Exxon Mobil.

He said the arbitration through the ICSID are extremely expensive, so that the Venezuelan state would be better "to resolve disputes through an agreement."

EL UNIVERSAL

Hernando Díaz Candia Hernando Diaz Candia

Much has been said about Venezuela's withdrawal from ICSID. For some, it tried to regain sovereignty being attacked by an overwhelmingly favors transnational foreign private interests. For others, it was a political maneuver to avoid paying compensation for companies that have been expropriated or nationalized, which in itself will drive away foreign investment. None of the above positions is correct.

The international system of protection of foreign investments has its foundation in bilateral investment promotion and protection, which provide substantive protection standards, such as non-discrimination in legal treatment, the prohibition of unfair or inequitable treatment, and the closure of expropriation without adequate compensation. The ICSID is a center for conciliation and arbitration is the best known, but not the only investment arbitration forum, ie a place to file a claim in arbitration against a State if the investment does not receive the treatment provided in a bilateral treaty.

ICSID is false that overwhelmingly favors private interests abroad. Primero, el Ciadi, en sí mismo, no decide casos. First, the ICSID, in itself, does not decide cases. The cases are decided by the arbitrators appointed by or with the control of, the parties, including the respondent State. Second, studies with quantitative and statistical significance indicating that the awards in the context of ICSID have been, overall, balanced between cases that have favored investors and states.

It is also true that Venezuela could avoid adverse international awards to its withdrawal from ICSID. Under the ICSID Convention, a multilateral treaty, all cases presented to the July 24, 2012 shall be conducted, to the possible enforcement of an award against Venezuela and abroad, under the Convention. El asunto es menos claro para casos presentados luego de dicha fecha. The issue is less clear for cases filed after that date. The important thing is to review the bilateral investment treaty that applies to determine whether the same is expected or not different arbitration forums ICSID and whether these alternatives are set in order of priority. It is seriously argued that if the ICSID is the only mechanism of arbitration under relevant bilateral treaty, the jurisdiction of ICSID shall extend for the duration of the bilateral treaty.

There are very respectable reasons for a state decides not to join or withdraw from ICSID. One would be to seek arbitration awards that run under the New York Convention of 1958-which is another multilateral treaty, which allows the public policy exception to refuse enforcement of an award. Another reason would prefer that the awards can be challenged in courts. The ICSID Convention does not provide the aforementioned public policy exception and enacts a special system, administered by the same ICSID, contest awards.

Ecuador y Bolivia se retiraron de Ciadi recientemente. Ecuador and Bolivia recently withdrew from ICSID. Several developed countries like Canada, and others such as Brazil, Mexico and Russia are not members of ICSID. We respect the decision of Venezuela having denounced the ICSID Convention, but would have preferred that the reasons given for withdrawal had been different from those put forward by the chancellor in his note of last January 24, 2012, which referred to the alleged bias of the system .

In any case, remember that respect for the rules, legal certainty and predictability in government action are much more important to attract foreign investment to a nominal membership ICSID. Será posible para Venezuela reingresar a Ciadi en el futuro. Is it possible to reenter Venezuela ICSID in the future. This would require that the Executive signing a new accession to the ICSID Convention and the same is approved by the National Assembly.

PhD in law mention, arbitration specialist.

Hernando.Diaz @ WDAlegal.com