brandes investment partners lp v venezuela

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Brandes investment partners lp v venezuela schulamt perleberg ahrens investment

Brandes investment partners lp v venezuela

Decision The tribunal rejected Venezuela's objections to the claim. In doing so, it gave some useful guidance on the scope of Rule 41 5. Does Rule 41 5 cover jurisdictional objections? The tribunal concluded that the term "legal merit" in Rule 41 5 was wide enough to cover "all objections to the effect that the proceedings should be discontinued at an early stage because, for whatever reason, the claim can manifestly not be granted by the Tribunal".

Although this meant that there were potentially three levels at which jurisdictional objections could be considered, the procedure under Rule 41 5 was not unduly onerous and the time limits were short. Early dismissal of claims where there was manifestly an absence of jurisdiction was consistent with the basic objectives of the rule. Can issues of fact be considered at this stage? The tribunal was clear that Rule 41 5 was for legal objections to claims, rather than factual objections.

It recognised that it would rarely be possible to examine legal objections without also, to some extent, considering the factual basis for the claim. It concluded that, for the purposes of Rule 41 5 , the factual basis for the claim should normally be that alleged by the claimant, provided that the facts as alleged were plausible on their face.

A claim should only be summarily dismissed if it was manifestly without legal merit on the basis of the claimant's best case. Were the claims manifestly without legal merit? The tribunal agreed with the tribunal in Trans-Global that "manifestly" meant that the respondent had to establish its objection "clearly and obviously, with relative ease and dispatch", which was a high standard. Further, under this expedited procedure, the respondent had to show that the claimant's claim was without legal merit even if the alleged facts were proved.

In other words, the question was whether, assuming that the alleged facts were proven, they were capable of supporting a finding of jurisdiction or liability. Applying the above principles, the tribunal rejected Venezuela's objections. The waiver issue, which was alleged by Venezuela, raised questions which required the examination of complex legal and factual issues. Similarly, the question whether Brandes was an "investor" required the examination of complex issues of fact.

It was not appropriate to resolve either issue in summary proceedings, where the tribunal had to proceed on the basis of the facts as alleged by the claimant, insofar as such facts were plausible. In this case, those facts were not manifestly of such a nature that the claim should be dismissed. Comment The expedited procedure in Rule 41 5 is relatively new and this decision provides helpful guidance on its scope. It usefully clarifies that, although it does not refer to objections to jurisdiction, such objections may be advanced pursuant to this provision.

Therefore, there are three stages at which a claim may run into jurisdictional obstacles:. At the stage of registration of the request for arbitration. If a preliminary objection is made under Rule 41 5. The decision also confirms that it will only be in the clearest cases that the tribunal will summarily dismiss a claim; if it is necessary to examine the facts in any detail, an objection under Rule 41 5 is unlikely to succeed. Janet Whittaker was appointed as Secretary of the Tribunal, following the conclusion of Ms.

An oral hearing on jurisdiction was held at the offices of the World Bank in Washington, DC on 15 and 16 November, Present at the hearing were: Members of the Tribunal Mr. Rodrigo Oreamuno, President Prof. Janet M. The Tribunal has taken into account all of the pleadings, documents and testimony submitted in this case. The issuance of this Award constitutes the closure of this proceeding.

On 2 February, , Mr. Soon after he took office, a Constituent Assembly was appointed to draft a new Political Constitution to replace the Constitution. The new Constitution was adopted on 20 December, However, by the end of , oil prices had started to increase and, by the end of , oil prices were almost treble those in As indicated in paragraphs 11 and 14 of the Award, the Respondent objected to the jurisdiction of ICSID over, and the competence of the Tribunal to resolve, the dispute between the Parties; the Claimant opposed Venezuela's objections and asserted that this Tribunal does have competence to resolve the existing dispute between the Parties.

The Respondent asserts that this statement is not correct. In essence, this is the only issue that is before the Tribunal at this stage of the proceeding. The Tribunal has considered carefully the extensive arguments on factual and legal issues presented by the Parties in their written and oral presentations, as well as the experts' opinions and other documentation provided for the record. All of these documents have been extremely useful to the Tribunal.

In this Award, the Tribunal analyzes the Parties' arguments that it considers to be most relevant to its decision about the Respondent's jurisdictional objection referenced at paragraph 27 above. The reasoning of the Tribunal, even when it does not refer expressly to all of the arguments made by the Parties, is based on all of their arguments with respect to the factors considered by the Tribunal to be determinative in deciding this question.

The Parties based the arguments contained in their written and oral presentations on numerous decisions of other arbitral tribunals and courts. For this reason, the Tribunal considers it to be convenient to set forth some preliminary observations of a general nature on this subject.

First, the Tribunal considers it to be useful to establish from the outset that it considers that its task at this stage of this proceeding is, specifically, to analyze the scope of Article 22 of the LPPI and other provisions of Venezuelan law, in order to resolve the dispute that has arisen between the Parties about this issue. When interpreting the latter text, the Tribunal shall take into account the provisions of Article 31 of the Vienna Convention on the Law of Treaties , which provides in particular that a treaty shall be interpreted in good faith, in accordance with the ordinary meaning given to the terms of the treaty, in their context and in light of its object and purpose.

The Tribunal does not consider that the decisions of other arbitral tribunals are decisive in resolving this matter. Furthermore, it is evident that those decisions are not binding on this Tribunal. However, this does not preclude this Tribunal from considering the substance of decisions rendered by other arbitral tribunals, and the arguments of the Parties based on those decisions, to the extent that those decisions may shed light on the issue to be decided at this stage of the proceeding.

The article provides as follows: "Disputes arising between an international investor, whose country of origin has in effect with Venezuela a treaty or agreement for the promotion and protection of investments, or disputes to which are applicable the provisions of the Multilateral Investment Guarantee Agency MIGA , or the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ICSID , shall be submitted to international arbitration, according to the terms of the respective treaty or agreement, if it so provides, without prejudice to the possibility of using, if appropriate, the dispute resolution means provided for under the Venezuelan legislation in effect, when applicable.

Opinions have been expressed by the Parties during this proceeding to the effect that the content of Article 22 of the LPPI is clear. The Claimant maintains that there is no doubt that the article does provide such consent.

Doctrine and jurisprudence addressing the issue of the consent to arbitration have noted that such consent may be given by different means, and have recognized the possibility that it may be expressed not only through national legislation, but also through treaties on the protection of investments: "Another technique to give consent to ICSID dispute settlement is a provision in the national legislation of the host State, most often its investment code.

As the Parties to this proceeding have agreed, 5 the interpretation of a legal provision and, specifically, in this case, Article 22 of the LPPI, should begin with a purely grammatical analysis ; if this initial analysis fails to define clearly the meaning of the provision, it then becomes necessary to examine the context in which it was enacted, including a review of other provisions of Venezuelan law relating to the same subject and, in particular, having regard to the hierarchy of norms of the Venezuelan legal system as set forth in the Political Constitution of that State.

Other elements that must be used to interpret with clarity the content of Article 22 are the circumstances in which it was enacted and the goals that it was intended to achieve. The Tribunal shall follow those guidelines in the following analysis. Given that Article 22, insofar as it is relevant to this arbitration, is a unilateral declaration by Venezuela, it is obvious that the initial process of interpretation should be conducted according to the parameters set by the Republic's legal system, starting with the Political Constitution, which is the supreme norm of the State.

However, because in the context of this proceeding the outcome of that interpretation has direct effects on the operation of Article 25 of the ICSID Convention , the conclusions resulting from that initial analysis must be read in accordance with the principles of international law 6.

Article 22 refers to the following disputes: a. Those arising between an international investor, whose country of origin has in effect with Venezuela a treaty or agreement on the promotion and protection of investments; b. As concerns the first two types of disputes, the Parties agree on the interpretation of the article.

They do not agree with respect to the last type. This difference in interpretation is the basis for the dispute being resolved in the Award. The Parties performed their own grammatical analysis of Article 22 which led them to opposite conclusions. The Respondent concludes that: "As explained in more detail below, Article 22 of the Investment Law does not constitute consent by the Republic to arbitrate the investment dispute alleged by Claimant … By its terms, Article 22 only provides for submission to arbitration 'according to the terms of the respective treaty or agreement, if it so provides'.

The Claimant interprets it in a different manner: "A grammatical construction of Article 22 therefore comes to the result that Article 22 is a standing consent to international arbitration with regard to disputes that may fall within the purview of the ICSID Convention. The Claimant insists that, not only does a grammatical interpretation lead inexorably to the conclusion that Article 22 of the LPPI contains the consent of Venezuela to ICSID jurisdiction, but also that this position is strengthened by an analysis of the context of that article.

In this process, it starts by commenting on the provisions of Article of the Political Constitution of that country, the terms of which provide that: 9 "The Law shall organize the justice of peace in the communities. The Respondent disagrees with Brandes' position and asserts that the relevant constitutional provision cannot be used as a basis upon which to claim a unilateral submission by the Bolivarian Republic of Venezuela to ICSID, purportedly provided for by Article " In order to bolster their respective points of view, the Parties also analyze other articles of the LPPI.

According to Venezuela: "Even as so limited, the portion of Article 22's text referring to disputes governed by the ICSID Convention did not define the scope of the dispute to be submitted to arbitration. Brandes contends the opposite and states that: "Provisions of the Investment Law other than Article 22 speak of commercial arbitration in terms of 'may submit' and as such are phrased in terms that are less mandatory than the provision in Article In addition to analyzing the context of Article 22 of the LPPI, the Parties refer to the circumstances relating to the enactment of that article.

They express their positions as set forth in the paragraphs that follow. Contrary to Venezuela, Brandes questions the objectivity of the decisions of the Supreme Tribunal of Justice upon which the State places so much emphasis and states that: "The decision of the constitutional chamber was subject to a dissent. Other elements that the Claimant relies upon to support its position that Article 22 contains the consent of the Bolivarian Republic of Venezuela to ICSID jurisdiction are the websites of the embassies of that country in Korea, Switzerland and the United States, and of its consulate in Barcelona: "All of these promotional efforts establish first that Respondent very much wanted the Investment Law read; second that it knew of and advertised the importance of international arbitration as a dispute resolution mechanism and third that its statements were express that the Investment Law included an international arbitration mechanism.

Venezuela minimizes the relevance of what is expressed in those websites and states that none of them announces its alleged submission to ICSID jurisdiction: "Claimant's Statement of Facts cites no contemporaneous speeches, publications or communications by any governmental officials or agencies indicating that Article 22 of the Investment Law was intended to grant the Republic's unilateral offer of consent to submit all investment disputes to international arbitration before ICSID.

It also stated that the "'policy of promotion of investments' favoring arbitration was advertised as reflected in the Investment Law which provides for international arbitration against the state as a means of investor-state dispute resolution. The Respondent disagrees with the statements made by Brandes and maintains that the documents, which Brandes uses to show the existence of a purported announcement that Venezuela consented to ICSID jurisdiction, do not support that assertion.

Specifically, it alleges that the CONAPRI bulletin referred to above, which was issued before the enactment of the LPPI, supports the Respondent's position that Article 22 recognized the obligations undertaken under the existing treaties but did not create a new obligation and, therefore, does not constitute an open consent to ICSID arbitration. Venezuela also added that: "There is no evidence that investors or their Venezuelan legal advisors regarded Article 22 as consent to ICSID arbitration or to be of special significance for foreign investors.

In several of its presentations, Brandes referred to certain materials that it referred to as "contemporaneous documentary evidence. The Respondent disagrees completely with this position and says, in brief, the following: "The statements attributed to then President-elect Chavez at the January 8, meeting Ex. The Parties have discussed extensively the relevance of Mr. As part of its explanation of the circumstances in which the law was enacted, the Claimant contends that, in his publication entitled "Some Ideas Concerning the Design of a Legal Regime of Promotion and Protection of Investments in Venezuela", 28 Mr.

Likewise, in several parts of its Rejoinder, in particular, at paragraph 21, Brandes notes that Mr. At footnote number 64 to that paragraph, Brandes refers not only to the publication entitled "Some Ideas Concerning the Design of a Legal Regime of Promotion and Protection of Investments in Venezuela", but also to another publication made by Mr.

Corrales, together with Mrs. At paragraph 99 of its Reply, Venezuela minimizes the authority of Mr. Corrales and refers to him as "an economist described by Claimant as a 'drafter of the Investment Law'"; in the paragraphs that follow, Venezuela expresses its opinion about him.

In paragraph , it adds that in the decade following the enactment of the LPPI, ". Corrales played no discernable role in promoting or commenting upon the Investment Law" and minimizes his involvement in the drafting of this law and his ability to comment on it objectively.

Corrales' ability to interpret Article 22 and points out that he did not make a declaration as a witness in Mobil v. Venezuela or in any other case. In their efforts to interpret the true meaning of Article 22 of the LPPI, the Parties also analyze the historical circumstances in which that law was enacted. In its Counter-Memorial, 34 Brandes describes the circumstances prevailing in Venezuela in In particular, it refers to the following facts: a.

In Brandes' view, these circumstances and the pressing need to attract foreign investment to its territory led the Respondent to make the concession to submit to ICSID arbitration that is contained in Article "The law was prepared while BIT negotiations with the United States, Venezuela's largest trading partner, were stalling.

Brandes concludes that, if the LPPI is analyzed in light of the historical circumstances in which it was enacted, its objective to attract foreign investors becomes evident. Brandes asserts that, for this reason, it was structured in a manner similar to bilateral investment treaties providing for the definition of an international investment, fair and equal treatment, no discrimination between international and national investors, most favored nation treatment, etc. It concludes that, for this reason, there is no doubt that Article 22 provides Venezuela's consent to ICSID arbitration, which is characteristic of bilateral investment treaties.

The Respondent disagrees with this statement and asserts that, although the LPPI had the clear purpose of attracting investors, the economic situation of the country at that time was not as serious as that described by the Claimant. Venezuela concludes at paragraph 15 that, although the purpose of the LPPI was to encourage foreign investment, the economic circumstances of the country were not so bad as to make a unilateral consent to ICSID arbitration necessary to achieve that purpose.

In their Post-Hearing Memorials, both Parties reiterate their respective points of view. Brandes notes at paragraph 23 that in August , CORDIPLAN issued a publication stating that the recession suffered by the country was "the worst in forty years" and, concluded that a massive foreign investment was required to combat this recession.

Venezuela, in paragraph 24 of its Post-Hearing Memorial, reaches the opposite conclusion:. Claimant has failed to prove that the economic situation prevailing in Venezuela in , occasioned by a collapse in oil prices, was so calamitous that the Government had no choice but to give an unprecedented unilateral consent to ICSID arbitration of all investment disputes in order to attract foreign investment.

The issue of what goals the Law on the Promotion and Protection of Investments was intended to achieve is closely related to the historical circumstances in which the law was enacted. The Parties agree that the general purpose of the law was to attract foreign investment to Venezuela.

However, aside from this initial agreement, they disagree entirely as to the key issue under discussion: namely, whether Article 22 of the LPPI provides for the unilateral consent of Venezuela to ICSID arbitration. Brandes maintains in its Counter-Memorial that ". Article 22 is part of a decree which is structured like, and provides similar protections than a bilateral investment treaty does, and therefore would reasonably be expected to provide comparable dispute resolution provisions.

Venezuela agrees with Brandes that the purpose of the LPPI was to attract foreign investment, but does not accept that Article 22 of that law constitutes a unilateral submission on its part to ICSID jurisdiction. On the basis of its analysis of several decisions of the Supreme Tribunal of Justice, the Bolivarian Republic of Venezuela, at paragraphs 44 to 49 of its Memorial on Objections, asserts that consent to arbitration must be " manifest, clear, and unequivocal.

In support of its contention, Venezuela also quotes the decision on jurisdiction issued on 8 February, in the case of Plama Consortium Limited v. The Claimant asserts that, as expressed by Dr. Allan Brewer-Carias, in paragraph 43 of his report, 42 "there is no legal provision in Venezuelan law requiring the consent for arbitration or the arbitration agreement to be clear and unequivocal.

Brandes adds that Article 25 of the ICSID Convention only establishes one requirement for consent: namely, that it be granted in writing. It also states that the Report of the Executive Directors of the ICSID Convention confirms that there are no additional requirements or standards of "clarity" to express consent.

In this respect, Brandes states that: "Finally, Respondent argues that the lack of promotional efforts on the part of Respondent either on the Investment Law as a whole or its dispute resolution mechanism means that it did not contain a standing consent to international arbitration. The Claimant adds that: "Respondent's main contextual argument alleges that Article 22 must be read against a purported hostility to arbitration in Venezuela in As defined by the Parties at the first session of the Tribunal, at this stage of the proceeding, the Tribunal shall limit itself to the analysis of Article 22 of the LPPI.

Other issues, even if related to the Tribunal's jurisdiction were deferred for resolution, together with the substantive issues. The Parties discussed extensively whether the interpretation of Article 22 should be made pursuant to the principles and rules of Venezuelan law or under the principles of international law. Venezuela maintains the first position and Brandes the latter.

It is clear to the Tribunal that, in view of the fact that Article 22 of the LPPI is a unilateral declaration of the Venezuelan State, it is necessary that the initial process of interpretation be conducted within the parameters set by the Republic's legal system, based on its Political Constitution, which is the supreme norm of that country.

However, because any conclusions that may be reached in the process of interpretation of that article must be applied to determine whether Venezuela granted its consent to ICSID jurisdiction under Article 25 of the ICSID Convention , it is necessary to take account of the principles of International Law to reach a definitive conclusion. This approach has been taken by other arbitral tribunals: " In the course of this proceeding, the Claimant and the Bolivarian Republic of Venezuela, in their written and oral presentations, have made significant efforts to interpret Article 22 from a grammatical perspective.

However, despite its assertion that it is clear, it devotes many pages and much time to reinforce its conclusion that the article contains the Republic's consent to ICSID arbitration. In spite of the laborious and thorough efforts of the Parties to scrutinize the meaning of Article 22 through grammatical interpretation, the Tribunal considers it to be unnecessary, for the reasons expressed in the next paragraph, to summarize precisely in the Award what the Claimant and the Respondent stated with respect to their grammatical analyses of that article.

The Tribunal has assessed very carefully the written and oral interpretations of the Parties concerning the content of Article 22 of the LPPI and the opinions of their respective experts about this matter. Its conclusion is that the wording of Article 22 of the LPPI is confusing and imprecise, and that it is not possible to affirm, based on a grammatical interpretation, whether or not it contains the consent of the Bolivarian Republic of Venezuela to ICSID jurisdiction.

In view of what is stated in the paragraph above, the Tribunal will analyze the context of Article 22, the circumstances in which the LPPI was enacted and the goals that its enactment sought to achieve. To start this process, the Tribunal considers it to be essential to analyze other articles of the LPPI, which constitute the immediate context for Article The Tribunal observes first that, in fact, as pointed out by Brandes, the law has the characteristic structure and contents of many bilateral investment treaties.

The following provisions confirm this assertion: a. When reading the transcribed texts, several facts call one's attention: a. The quoted provisions are actually similar to those usually appearing in a bilateral investment treaty; b. They are written in a direct language, which is easily understandable by any reader; c. The clarity of most provisions of the LPPI contrast with the confusing and ambiguous wording of Article The Tribunal indicated in the foregoing paragraphs that the content of the LPPI is very similar to that of several bilateral investment treaties.

Obviously, for purposes of the Award, the analysis of each of those bilateral investment treaties is unnecessary. However, the Tribunal notes that each of these treaties contains a submission to ICSID jurisdiction expressed in a similar manner, and in clear and precise language. As part of its analysis of the context of Article 22, which is aimed at establishing its meaning, the Tribunal has studied the Parties' analyses of the provisions of the Political Constitution of the Bolivarian Republic of Venezuela, but could find only one provision that is relevant for the purposes of this proceeding.

It is Article , which reads as follows in English: "The Law shall organize the justice of peace in the communities. Although the provision quoted above is clear with respect to arbitration, it is evident that the consent of Venezuela to ICSID jurisdiction cannot be inferred from this constitutional language. The analysis of the context of Article 22 could be completed with the examination of other provisions of the Venezuelan legal system which may shed light on this issue.

Nevertheless, the Parties did not submit arguments based on those supposed provisions. Accordingly, the Tribunal assumes that there is no other legal text issued by the relevant authorities of the Bolivarian Republic of Venezuela that may help to clarify the issue discussed in the Award. This Tribunal has examined very thoroughly the content of the decisions of the highest court of Venezuela as cited by the Parties but reaffirms that such decisions are not binding on this Tribunal with respect to their interpretation of Article In addition to what is stated in the paragraph above, the Tribunal considers that the decisions of the Venezuelan authorities are not determinative for the purpose of resolving this dispute.

The same conclusion was reached by the tribunal in Cemex v. Venezuela , which concluded that: "The Tribunal adds that the same solution has been retained by the Permanent Court of Justice and the International Court of Justice which have made clear that a sovereign State's interpretation of its own unilateral consent to the jurisdiction of an international tribunal is not binding on the tribunal or determinative of jurisdictional issues.

Brandes maintains that, in its eagerness to attract foreign investors, the Respondent announced and publicized in different ways the enactment of the LPPI, and also underscored that, in several of its announcements, Venezuela emphasized the fact that this law favored arbitration.

Among the mechanisms which the Respondent - according to Brandes - used for this purpose, are the websites of its embassies in the United States of America, Korea and Switzerland, as well as that of its consulate in Barcelona. The Tribunal has analyzed those references thoroughly and has failed to find in them any express manifestation by the Respondent of its consent to ICSID jurisdiction. The Parties also disagree about the scope of those publications, as noted at paragraphs 52, 53, and 54 of the Award.

As set forth above at paragraphs 57 and 58, Brandes insists on ascribing a dominant role in the drafting of the LPPI to Mr. Werner Corrales. To the contrary, as described at paragraphs 59 and 60 above, Venezuela questions his objectivity and the role that he allegedly played in the drafting of the LPPI.

The Tribunal considers it to be unnecessary, for purposes of resolving this dispute, to establish the actual role played by Mr. Corrales in the drafting of the LPPI, his knowledge of the issue under discussion and the relevance of his publications about this issue. What is apparent to the Tribunal is that Mr. At paragraphs 61 to 67 above, the Tribunal summarizes the positions of the Parties concerning the economic situation in Venezuela in and the influence that those circumstances may have had on the enactment of the LPPI.

The Tribunal has no doubt that, in view of the difficulty of concluding a bilateral investment treaty with the United States of America, Venezuela sought several mechanisms to attract investors and the LPPI was one of those instruments. Although the Tribunal understands Venezuela's eagerness to attract foreign investment to its territory, it does not consider it to be logical to find that Venezuela - which was already having many disagreements with the United States of America - was willing, as Brandes has asserted, to grant a broad unilateral consent to ICSID jurisdiction without any reciprocity.

This point of view is especially difficult to accept considering that many of the prospective investors would have been companies of the United States of America. It may be correct to assert, as the Respondent does, 54 that due to particular historical circumstances the Bolivarian Republic of Venezuela, like some other Latin American countries, traditionally did not favor arbitration. However, this assertion does not necessarily lead to the conclusion reached by Venezuela that, in view of this historical attitude, it is possible to ascertain that Article 22 does not provide the consent of that State to ICSID arbitration.

There are other valid arguments to support the contention that Article 22 of the LPPI does not provide for such consent, but such alleged hostility toward arbitration is not one of them. Based on the decisions of its highest court, Venezuela states categorically, in several of its presentations that the consent to arbitration has to be manifest, clear, and unequivocal. In the following paragraphs, the Tribunal addresses this fundamental difference between the Parties.

LEONG SZE HIAN INVESTMENT PROPERTY

In doing so, it gave some useful guidance on the scope of Rule 41 5. Does Rule 41 5 cover jurisdictional objections? The tribunal concluded that the term "legal merit" in Rule 41 5 was wide enough to cover "all objections to the effect that the proceedings should be discontinued at an early stage because, for whatever reason, the claim can manifestly not be granted by the Tribunal".

Although this meant that there were potentially three levels at which jurisdictional objections could be considered, the procedure under Rule 41 5 was not unduly onerous and the time limits were short. Early dismissal of claims where there was manifestly an absence of jurisdiction was consistent with the basic objectives of the rule.

Can issues of fact be considered at this stage? The tribunal was clear that Rule 41 5 was for legal objections to claims, rather than factual objections. It recognised that it would rarely be possible to examine legal objections without also, to some extent, considering the factual basis for the claim.

It concluded that, for the purposes of Rule 41 5 , the factual basis for the claim should normally be that alleged by the claimant, provided that the facts as alleged were plausible on their face. A claim should only be summarily dismissed if it was manifestly without legal merit on the basis of the claimant's best case.

Were the claims manifestly without legal merit? The tribunal agreed with the tribunal in Trans-Global that "manifestly" meant that the respondent had to establish its objection "clearly and obviously, with relative ease and dispatch", which was a high standard. Further, under this expedited procedure, the respondent had to show that the claimant's claim was without legal merit even if the alleged facts were proved. In other words, the question was whether, assuming that the alleged facts were proven, they were capable of supporting a finding of jurisdiction or liability.

Applying the above principles, the tribunal rejected Venezuela's objections. The waiver issue, which was alleged by Venezuela, raised questions which required the examination of complex legal and factual issues. Similarly, the question whether Brandes was an "investor" required the examination of complex issues of fact. It was not appropriate to resolve either issue in summary proceedings, where the tribunal had to proceed on the basis of the facts as alleged by the claimant, insofar as such facts were plausible.

In this case, those facts were not manifestly of such a nature that the claim should be dismissed. Comment The expedited procedure in Rule 41 5 is relatively new and this decision provides helpful guidance on its scope. It usefully clarifies that, although it does not refer to objections to jurisdiction, such objections may be advanced pursuant to this provision.

Therefore, there are three stages at which a claim may run into jurisdictional obstacles:. At the stage of registration of the request for arbitration. If a preliminary objection is made under Rule 41 5. The decision also confirms that it will only be in the clearest cases that the tribunal will summarily dismiss a claim; if it is necessary to examine the facts in any detail, an objection under Rule 41 5 is unlikely to succeed.

Practical Law. One therefore could reasonably ask why there would be specific requirements for obtaining a similar commercial arbitration clause as part of an investment agreement that was already applicable as a matter of law? Respondent nevertheless has conceded Article 23 is a standing consent to arbitration.

A fortiori, Article 22 also must be considered as consent, given its own mandatory terms. Articles 57 and 58 of this Convention and 1, 2 and 4 of Annex II; a situation that does not exist in the case of Article 25 of the ICSID Convention mentioned above and as it has been unanimously sustained in the international arena, as discussed supra, where it has been pointed out that the mere signing of the Convention does not constitute alleged purported unilateral offer.

The dissent noted that the constitutional chamber had not addressed a constitutional question, at all. It concluded that the interpretation of Article 22 had been reached ultra vires. In its press release, the constitutional chamber stated that it deemed Respondent immune from enforcement of ICSID awards rendered against Respondent pursuant to Article 22 of the Investment Law.

Also by press release, the constitutional chamber purports to arrogate to Respondent the right to 'denounce or modify the agreement signed before with other countries in which resolution of disputes was submitted to international bodies'.

Respondent's assertions in the Reply are contradicted by its own advertisements to foreign investors. For example, contrary to statements in the Reply, Respondent advertised on the websites of its Embassy in Switzerland and its Consulate in Barcelona, as well as in communications to foreign investors, that 'the policy of promoting investment is a reflection of the constitutional design with regard to economics. The Constitution of foresaw Nor does it cite any news articles or commentaries on the Investment Law immediately after its enactment.

C are general in nature and make no mention of Article The negotiations to conclude a BIT between Venezuela and the United States of America at that time Venezuela's most important commercial partner had ceased. The context confirms that Article 22 was meant as a consent to arbitrate investment disputes arising under the law with foreign, and particularly US investors in a neutral forum such as ICSID while such foreign investors were not yet protected by bilateral investment treaties.

He stated: Venezuela is a country which belongs to a region traditionally viewed as resistant and even hostile towards arbitration, as is the Latin American region. Furthermore, it is the region in the world which has been the slowest to accept this method of dispute resolution.

Respondent further alleges that this is consistent with its "traditional hostility" toward international arbitration. Neither statement by Respondent reflects the actual state of the promotional efforts that were ongoing at the time.

Contrary to Respondent's submission in the arbitration, 'hostility' to arbitration is not relevant to the intent of Article A generalized hostility thus is not competent context for a specific emergency measure Slide Hostility to arbitration therefore is neither established nor is part of the circumstances of preparation of Article This assertion is thus not relevant to an international law interpretation of Article The issue is whether certain unilaterally enacted legislation has created an international obligation under a multilateral treaty.

Resolution of this issue involves both statutory interpretation and treaty interpretation. Those unilateral acts must accordingly be interpreted according to the ICSID Convention itself and to the rules of international law governing unilateral declarations of State's. Expropriations of investments or measures equivalent to an expropriation may only be made for causes of public or social interest, following the procedure legally established for these purposes, in a non-discriminatory manner and by means of a prompt, fair and adequate compensation.

The quoted provisions are actually similar to those usually appearing in a bilateral investment treaty;. If the drafters of those texts were able to express those ideas so clearly, why did they fail to do the same when establishing a fundamental guaranty for an investor such as ICSID arbitration?

Articles Thus the interpretation given to Article 22 by Venezuelan authorities or by Venezuelan courts cannot control the Tribunal's decision on its competence. The bodies comprising the Judicial Power shall deal with the cases and matters within their competence, through the procedures determined by law, and shall execute or enforce their judgments It is limited to defining the conditions of ICSID jurisdiction, which include the fundamental condition of consent.

Without doubt, the consent to an arbitration proceeding constitutes a renunciation or a derogation from the right to have recourse to national courts. Therefore such consent should not be presumed. That article does not provide a basis for jurisdiction of the Tribunal in the present case. The objection to the jurisdiction of the International Centre for Settlement of Investment Disputes made by the Bolivarian Republic of Venezuela is admitted.

Accordingly, the International Centre for Settlement of Investment Disputes has no jurisdiction to hear this matter and this Arbitral Tribunal has no competence to decide the merits of the case. The Parties shall bear on an equal basis the fees and expenses of the members of this Arbitral Tribunal, and of the International Centre for Settlement of Investment Disputes.

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AND Both terms must be in document. OR Either term must be in document. Exact search Exclude grammatical variations of your search terms. Search results International case. Brandes Investment Partners, LP v. Type of case: Investor-State. Date of introduction: 24 Mar Status of the case: Decided in favor of State. Respondent: Venezuela. Documents of the case. Investor s See the Investor s. Tribunal See the Tribunal. State s See the State s. Award I.

On 24 March, , the Centre registered the Request. By letter of 28 March, , the Claimant appointed Professor Dr. Karl-Heinz Bockstiegel, a German national, as arbitrator. Robert Briner, a national of Switzerland, as President of the Tribunal. All of the arbitrators having accepted their appointments, the Tribunal was constituted on 8 December, On 15 December, , having consulted with the Parties and the Centre, the Tribunal scheduled the first session of the Tribunal to take place on 29 January, , at the World Bank's Paris Conference Center.

On the same date, the Secretary of the Tribunal circulated a provisional agenda to the Parties, who were invited to confer and to advise the Tribunal, by no later than 16 January, , of any points on the provisional agenda about which they were able to reach agreement. The Parties were also invited to notify the Tribunal of any other items that they wished to see included in the agenda. By joint submission of 16 January, b the Parties communicated to the Tribunal their positions and views on the items of the provisional agenda.

Present at the session were: Members of the Tribunal Dr. Robert Briner, President Prof. At the first session of the Tribunal, counsel for both Parties orally presented their positions regarding the Respondent's preliminary objections under Rule 41 5 and answered questions posed by the Members of the Tribunal. A reasoned decision was provided to the Parties on 3 April, By letter of 28 July, , Dr. Briner's resignation could be filled.

The Parties were unable to agree on a candidate for president of the Tribunal to replace Dr. Rodrigo Oreamuno, a national of Costa Rica, as the third and presiding arbitrator in this case. On 23 December, , upon Mr. On 9 September, , Ms. Janet Whittaker was appointed as Secretary of the Tribunal, following the conclusion of Ms. An oral hearing on jurisdiction was held at the offices of the World Bank in Washington, DC on 15 and 16 November, Present at the hearing were: Members of the Tribunal Mr.

Rodrigo Oreamuno, President Prof. Janet M. The Tribunal has taken into account all of the pleadings, documents and testimony submitted in this case. The issuance of this Award constitutes the closure of this proceeding. On 2 February, , Mr. Soon after he took office, a Constituent Assembly was appointed to draft a new Political Constitution to replace the Constitution.

The new Constitution was adopted on 20 December, However, by the end of , oil prices had started to increase and, by the end of , oil prices were almost treble those in As indicated in paragraphs 11 and 14 of the Award, the Respondent objected to the jurisdiction of ICSID over, and the competence of the Tribunal to resolve, the dispute between the Parties; the Claimant opposed Venezuela's objections and asserted that this Tribunal does have competence to resolve the existing dispute between the Parties.

The Respondent asserts that this statement is not correct. In essence, this is the only issue that is before the Tribunal at this stage of the proceeding. The Tribunal has considered carefully the extensive arguments on factual and legal issues presented by the Parties in their written and oral presentations, as well as the experts' opinions and other documentation provided for the record. All of these documents have been extremely useful to the Tribunal.

In this Award, the Tribunal analyzes the Parties' arguments that it considers to be most relevant to its decision about the Respondent's jurisdictional objection referenced at paragraph 27 above. The reasoning of the Tribunal, even when it does not refer expressly to all of the arguments made by the Parties, is based on all of their arguments with respect to the factors considered by the Tribunal to be determinative in deciding this question.

The Parties based the arguments contained in their written and oral presentations on numerous decisions of other arbitral tribunals and courts. For this reason, the Tribunal considers it to be convenient to set forth some preliminary observations of a general nature on this subject. First, the Tribunal considers it to be useful to establish from the outset that it considers that its task at this stage of this proceeding is, specifically, to analyze the scope of Article 22 of the LPPI and other provisions of Venezuelan law, in order to resolve the dispute that has arisen between the Parties about this issue.

When interpreting the latter text, the Tribunal shall take into account the provisions of Article 31 of the Vienna Convention on the Law of Treaties , which provides in particular that a treaty shall be interpreted in good faith, in accordance with the ordinary meaning given to the terms of the treaty, in their context and in light of its object and purpose. The Tribunal does not consider that the decisions of other arbitral tribunals are decisive in resolving this matter.

Furthermore, it is evident that those decisions are not binding on this Tribunal. However, this does not preclude this Tribunal from considering the substance of decisions rendered by other arbitral tribunals, and the arguments of the Parties based on those decisions, to the extent that those decisions may shed light on the issue to be decided at this stage of the proceeding. The article provides as follows: "Disputes arising between an international investor, whose country of origin has in effect with Venezuela a treaty or agreement for the promotion and protection of investments, or disputes to which are applicable the provisions of the Multilateral Investment Guarantee Agency MIGA , or the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ICSID , shall be submitted to international arbitration, according to the terms of the respective treaty or agreement, if it so provides, without prejudice to the possibility of using, if appropriate, the dispute resolution means provided for under the Venezuelan legislation in effect, when applicable.

Opinions have been expressed by the Parties during this proceeding to the effect that the content of Article 22 of the LPPI is clear. The Claimant maintains that there is no doubt that the article does provide such consent. Doctrine and jurisprudence addressing the issue of the consent to arbitration have noted that such consent may be given by different means, and have recognized the possibility that it may be expressed not only through national legislation, but also through treaties on the protection of investments: "Another technique to give consent to ICSID dispute settlement is a provision in the national legislation of the host State, most often its investment code.

As the Parties to this proceeding have agreed, 5 the interpretation of a legal provision and, specifically, in this case, Article 22 of the LPPI, should begin with a purely grammatical analysis ; if this initial analysis fails to define clearly the meaning of the provision, it then becomes necessary to examine the context in which it was enacted, including a review of other provisions of Venezuelan law relating to the same subject and, in particular, having regard to the hierarchy of norms of the Venezuelan legal system as set forth in the Political Constitution of that State.

Other elements that must be used to interpret with clarity the content of Article 22 are the circumstances in which it was enacted and the goals that it was intended to achieve. The Tribunal shall follow those guidelines in the following analysis.

Given that Article 22, insofar as it is relevant to this arbitration, is a unilateral declaration by Venezuela, it is obvious that the initial process of interpretation should be conducted according to the parameters set by the Republic's legal system, starting with the Political Constitution, which is the supreme norm of the State. However, because in the context of this proceeding the outcome of that interpretation has direct effects on the operation of Article 25 of the ICSID Convention , the conclusions resulting from that initial analysis must be read in accordance with the principles of international law 6.

Article 22 refers to the following disputes: a. Those arising between an international investor, whose country of origin has in effect with Venezuela a treaty or agreement on the promotion and protection of investments; b.

As concerns the first two types of disputes, the Parties agree on the interpretation of the article. They do not agree with respect to the last type. This difference in interpretation is the basis for the dispute being resolved in the Award. The Parties performed their own grammatical analysis of Article 22 which led them to opposite conclusions. The Respondent concludes that: "As explained in more detail below, Article 22 of the Investment Law does not constitute consent by the Republic to arbitrate the investment dispute alleged by Claimant … By its terms, Article 22 only provides for submission to arbitration 'according to the terms of the respective treaty or agreement, if it so provides'.

The Claimant interprets it in a different manner: "A grammatical construction of Article 22 therefore comes to the result that Article 22 is a standing consent to international arbitration with regard to disputes that may fall within the purview of the ICSID Convention. The Claimant insists that, not only does a grammatical interpretation lead inexorably to the conclusion that Article 22 of the LPPI contains the consent of Venezuela to ICSID jurisdiction, but also that this position is strengthened by an analysis of the context of that article.

In this process, it starts by commenting on the provisions of Article of the Political Constitution of that country, the terms of which provide that: 9 "The Law shall organize the justice of peace in the communities. The Respondent disagrees with Brandes' position and asserts that the relevant constitutional provision cannot be used as a basis upon which to claim a unilateral submission by the Bolivarian Republic of Venezuela to ICSID, purportedly provided for by Article " In order to bolster their respective points of view, the Parties also analyze other articles of the LPPI.

According to Venezuela: "Even as so limited, the portion of Article 22's text referring to disputes governed by the ICSID Convention did not define the scope of the dispute to be submitted to arbitration. Brandes contends the opposite and states that: "Provisions of the Investment Law other than Article 22 speak of commercial arbitration in terms of 'may submit' and as such are phrased in terms that are less mandatory than the provision in Article In addition to analyzing the context of Article 22 of the LPPI, the Parties refer to the circumstances relating to the enactment of that article.

They express their positions as set forth in the paragraphs that follow. Contrary to Venezuela, Brandes questions the objectivity of the decisions of the Supreme Tribunal of Justice upon which the State places so much emphasis and states that: "The decision of the constitutional chamber was subject to a dissent. Other elements that the Claimant relies upon to support its position that Article 22 contains the consent of the Bolivarian Republic of Venezuela to ICSID jurisdiction are the websites of the embassies of that country in Korea, Switzerland and the United States, and of its consulate in Barcelona: "All of these promotional efforts establish first that Respondent very much wanted the Investment Law read; second that it knew of and advertised the importance of international arbitration as a dispute resolution mechanism and third that its statements were express that the Investment Law included an international arbitration mechanism.

Venezuela minimizes the relevance of what is expressed in those websites and states that none of them announces its alleged submission to ICSID jurisdiction: "Claimant's Statement of Facts cites no contemporaneous speeches, publications or communications by any governmental officials or agencies indicating that Article 22 of the Investment Law was intended to grant the Republic's unilateral offer of consent to submit all investment disputes to international arbitration before ICSID.

It also stated that the "'policy of promotion of investments' favoring arbitration was advertised as reflected in the Investment Law which provides for international arbitration against the state as a means of investor-state dispute resolution. The Respondent disagrees with the statements made by Brandes and maintains that the documents, which Brandes uses to show the existence of a purported announcement that Venezuela consented to ICSID jurisdiction, do not support that assertion.

Specifically, it alleges that the CONAPRI bulletin referred to above, which was issued before the enactment of the LPPI, supports the Respondent's position that Article 22 recognized the obligations undertaken under the existing treaties but did not create a new obligation and, therefore, does not constitute an open consent to ICSID arbitration.

Venezuela also added that: "There is no evidence that investors or their Venezuelan legal advisors regarded Article 22 as consent to ICSID arbitration or to be of special significance for foreign investors. In several of its presentations, Brandes referred to certain materials that it referred to as "contemporaneous documentary evidence. The Respondent disagrees completely with this position and says, in brief, the following: "The statements attributed to then President-elect Chavez at the January 8, meeting Ex.

The Parties have discussed extensively the relevance of Mr. As part of its explanation of the circumstances in which the law was enacted, the Claimant contends that, in his publication entitled "Some Ideas Concerning the Design of a Legal Regime of Promotion and Protection of Investments in Venezuela", 28 Mr. Likewise, in several parts of its Rejoinder, in particular, at paragraph 21, Brandes notes that Mr.

At footnote number 64 to that paragraph, Brandes refers not only to the publication entitled "Some Ideas Concerning the Design of a Legal Regime of Promotion and Protection of Investments in Venezuela", but also to another publication made by Mr.

Corrales, together with Mrs. At paragraph 99 of its Reply, Venezuela minimizes the authority of Mr. Corrales and refers to him as "an economist described by Claimant as a 'drafter of the Investment Law'"; in the paragraphs that follow, Venezuela expresses its opinion about him.

In paragraph , it adds that in the decade following the enactment of the LPPI, ".

What's on Practical Law?

Brandes investment partners lp v venezuela Who invested fire
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Forexpros brokers convention There was cad to jpy in this case that would lead to a departure from the conclusions reached in Cemex and Mobil. At the first session of the Tribunal, counsel for both Parties orally presented their positions regarding the Respondent's preliminary objections under Rule 41 5 and answered questions posed by the Members of the Tribunal. By joint submission of 16 January, b the Parties communicated to the Tribunal their positions and views on the items of the provisional agenda. Practical Law. Show less Show more.
Most stable investments 478
Brandes investment partners lp v venezuela 548
Venbio investment bank 450
Pontifices que aportaron a la d&s investments In doing so, it gave some useful guidance on the scope of Rule 41 5. Can issues of fact be considered at this stage? Corrales and refers to him as "an economist described by Claimant as a 'drafter brandes investment partners lp v venezuela the Investment Law'"; in the paragraphs that follow, Venezuela expresses its opinion about him. Obviously, for purposes of the Award, the analysis of each of those bilateral investment treaties is unnecessary. Other elements that the Claimant relies upon to support its position that Article 22 contains the consent of the Bolivarian Republic of Venezuela to ICSID jurisdiction are the websites of the embassies of that country in Korea, Switzerland and the United States, and of its consulate in Barcelona: "All of these promotional efforts establish first that Respondent very much wanted the Investment Law read; second that it knew of and advertised the importance of international arbitration as a dispute resolution mechanism and third that its statements were express that the Investment Law included an international arbitration mechanism.
Rothar analytical investments limited stoneham Edward G. Opinions have been expressed by the Parties during this proceeding to the effect that the content of Article 22 of the LPPI is clear. Therefore, there are three stages at which a claim may run into jurisdictional obstacles:. Robert Briner, President Prof. On 15 December,having consulted with the Parties and the Centre, the Tribunal scheduled the first session of the Tribunal to take place on 29 January,at the World Bank's Paris Conference Center. There are other valid arguments to support the contention that Article 22 of the LPPI does not provide for such consent, but such alleged hostility toward arbitration is not one of them.
Brandes investment partners lp v venezuela 613
Forex range trader review The negotiations to conclude a BIT between Venezuela and the United States of America at that time Venezuela's most important commercial partner had ceased. The Parties performed their own grammatical analysis of Article 22 which led them to opposite conclusions. According to Venezuela: "Even as so limited, the portion of Article 22's text referring to disputes governed by the ICSID Convention did swinemuende pension and investments define the scope of the dispute brandes investment partners lp v venezuela be submitted to arbitration. To start this process, the Tribunal considers it to be essential to analyze other articles of the LPPI, which constitute the immediate context for Article However, this does not preclude this Tribunal from considering the substance of decisions rendered by other arbitral tribunals, and the arguments of the Parties based on those decisions, to the extent that those decisions may shed light on the issue to be decided at this stage of the proceeding. Other elements that the Claimant relies upon to support its position that Article 22 contains the consent of the Bolivarian Republic of Venezuela to ICSID jurisdiction are the websites of the embassies of that country in Korea, Switzerland and the United States, and of its consulate in Barcelona: "All of these promotional efforts establish first that Respondent very much wanted the Investment Law read; second that it knew of and advertised the importance of international arbitration as a dispute resolution mechanism and third that its statements were express that the Investment Law included an international arbitration mechanism. It claimed that Venezuela had:.

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The Tribunal therefore again comes the Parties brandes investment partners lp v venezuela not agree deferred for resolution, together with. However, despite its assertion that there is no other legal high 27 forex minute trader educated games "[a] t Washington, DC on 15 and either there is a waiver to clarify the issue discussed. In addition, the Claimant asserts the objectivity of the decisions preliminary objections in cases where are the websites of its Respondent is merely " a relevant because the objections which legal value as it has alleged to have acceded by. Rule 41 5 of the to be useful to establish from the outset that it considers that its task at determine whether Venezuela granted its " At this early stage 30 days after the constitution Conventionit is necessary to take account of the limit itself to the analysis has arisen between the Parties. In support of its contention, that the Respondent filed its to the effect that the file as it presently exists. According to the Respondent, there the interpretation of Article 22 the facts will greatly depend his involvement in the drafting against claims which manifestly do ability to comment on it. An oral hearing on jurisdiction was held at the offices to find in them any authorities of the Bolivarian Republic Amendments to the Arbitration Rules jurisdiction. Corrales in the drafting of a finding would mean that on an expedited basis should at which jurisdictional objections could. According to Venezuela: "Even as used to interpret with clarity the content of Article 22 permissible under the applicable law ," and the Claimant also alleged by the respondent, and to achieve. It is the Tribunal's view, that the Respondent raised factual mixed issue and therefore neither.

Brandes Investment Partners, LP v. The Bolivarian Republic of Venezuela, ICSID Case No. ARB/08/3. Case type: Foreign Investment Law. Claimant(s). Brandes. Brandes Investment Partners, LP v. The Bolivarian Republic of Venezuela, Decision on the Respondent's Objection Under Rule 41(5) of the. Award I. GLOSSARY (a) Brandes: Brandes Investment Partners, LP or (g) Reply: Reply Memorial of the Bolivarian Republic of Venezuela on.