Venezuelan Oil Minister Rafael Ramírez this weekend announced his country’s intention to withdraw from the World Bank’s Washington DC-based International Center for Settlement of Investment Disputes (ICSID). If carried out, Venezuela’s decision will affect the claims of nearly 20 foreign firms with cases pending before the ICSID worth an estimated total of $40 billion.
Ramírez’ announcement follows weeks of political posturing by the Venezuelan government in the wake of a $908 million judgment against Venezuela in a case brought by energy giant Exxon Mobil. In explaining his government’s position, Ramírez claimed in an interview that Venezuela “does not accept impositions and we are going to rescue our national sovereignty.”
It remains to be seen how the planned withdrawal will affect Venezuela’s agreements with other investors since international arbitration is contractually obligatory under virtually every bilateral investment agreement between Venezuela and foreign firms.