A Short Version of a Long Tale: Investment Arbitration in Venezuela
In this, the last of seven podcasts on international arbitration in Latin America from Baker McKenzie and Trench Rossi Watanabe, Maria Eugenia Salazar and Eugenio Hernández-Bretón, partners in the Baker McKenzie Caracas office, discuss the vital importance of always being prepared to defend an investment in Venezuela.
Eugenio Hernández Bretón
Ranked in 3 departments in Chambers Global 2022
The rapidly changing legal landscape in Venezuela has left investors in a difficult position
In the 1990s, when Venezuela became a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), as well as part of more than 20 bilateral investment treaties, it was difficult to predict that, 20 years later, the interests of foreign investors in Venezuela would have been expropriated by the Venezuelan government.
The importance of careful examination of foreign investments
Venezuela has bilateral investment treaties in force with only a limited number of countries (a little over 20). This means the origin of investments made in Venezuela needs to be examined carefully.
Some clients believed that because their investments came from abroad, they were protected; that was not the case. Protection is granted only in limited situations and under specific circumstances.
Staying aware of developments in this area of law
This is especially important in light of the many arbitral awards that are made each year.
How must an investment be evidenced? Do the funds invested in the host state need to be transferred from abroad and deposited in a bank account or are there other forms of investment that qualify?
Baker McKenzie
