WASHINGTON, D.C. -- The International Center for the Settlement of Investment Disputes (ICSID) -- the World Bank's arbitration forum -- has ordered Venezuela to pay oil services firm Tidewater $46.4 million plus interest and partial legal costs for the expropriation of Tidewater's business and ships in Venezuela in 2009.

Tidewater, a 55 year old U.S. company based in New Orleans, Louisiana, that is a provider of larger offshore service vessels to the oil and gas industry, had been working in Venezuela for over 50 years through its Semarca subsidiary.

The 3 judge arbitration panel was made up New Zealand's Campbell Alan McLachlan (who acted as President), Spain's Andrés Rigo Sureda (appointed by Tidewater), and Brigitte Stern (appointed by Venezuela).

The award was seen by experts as a win for Venezuela's lawyer George Kahale of Curtis, Mallet-Prevost, Colt & Mosle, as Tidewater was originally seeking $234 million and Venezuela owed the company $45 million in unpaid invoices alone at the time of the expropriation.

"Venezuela's positions on the central issues of the legality of the nationalization, the appropriate valuation date for determining compensation, and the appropriate discount rate for calculating compensation were all accepted by the tribunal," Kahale told Reuters.

"Kahale successfully got many of the expropriated ships outside of the consideration of the court by arguing that they were not protected by the investment treaties, so that Tidewater got screwed," said international lawyer Russ Dallen, who follows the ICSID cases. "Then he got the panel to use a high discounted cash flow rate of 14.75% to value the remaining expropriated assets because Venezuela was a dicey place and might expropriate your assets."

In 2013, Venezuela was successful in getting part of Tidewater's case -- a portion over the seizure of 15 ships -- dismissed because the ICSID arbitration panel found that the vessels were not covered by Article 22 of a 1999 Venezuela law for the Promotion and Protection of Investments.

The ICSID panel found that it did have "jurisdiction over the claims of Tidewater Barbados and Tidewater Caribe pursuant to Article 8 of the Barbados Bilateral Investment Treaty to the extent that such claims concern alleged breaches of the obligations of the Respondent under that Treaty arising after 9 March 2009" when Chavez expropriated Tidewater's operations in Venezuela.


Last week, ICSID ordered Venezuela to pay bottle-maker Owens-Illinois $455 million for the expropriation of their business in Venezuela.

Including the $455 million for Owens-Illinois, in the past 6 months, Venezuela has been ordered to pay almost $3 billion for a rash of expropriations by Venezuela's former leader Hugo Chavez, including $1.6 billion to ExxonMobil, $750 million to Gold Reserve, and $35 million to Swiss/Chilean airport operator Flughafen .



After a rash of expropriations and nationalizations by Chavez, Venezuela has 25 cases pending against it at ICSID -- the most of any nation in the world. Faced with the cases, Chavez withdrew Venezuela from ICSID jurisdiction in 2012, but pending cases and new cases brought under bilateral investment treaties and contracts continue to give ICSID jurisdiction to settle the arbitrations.

Other companies with pending ICSID arbitrations against Venezuela include mining and smelting companies Anglo American, Rusoro Mining Ltd., Crystallex International Corporation, Highbury International and Tenaris SA; food industry companies Gruma, Polar, Longreef, and Vestey; and oil industry companies Williams Cos. Inc., Koch Industries Inc., and ConocoPhillips.

Venezuela filed to Revise and Annul the $1.6 billion ExxonMobil judgment in February, essential staying the judgment so that Venezuela doesn't have to pay it unless the Tribunal rules again that they do.

In October, an ICSID arbitration panel awarded ExxonMobil $1.6 billion in its case against Venezuela for the 2007 expropriation of Exxon's investments in the Orinoco oil region.

The month before, in September, an ICSID panel awarded Gold Reserve Inc. $740.3 million for Venezuela's expropriation of Gold Reserves mining operations in the country. Venezuela is currently challenging Gold Reserve who is trying to begin enforcement of the award.

ICSID is an autonomous international institution established in 1965 under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID or the Washington Convention) with over one hundred and forty member States. The primary purpose of ICSID is to provide facilities for conciliation and arbitration of international investment disputes. ICSID judgements are automatically enforceable in any member state.