Offshore ship owner Tidewater is eligible to collect a portion of a cash claim it made against Venezuela for the expropriation of its oilfield services business in 2009.
To remind the World Bank Tribunal in March 2015 ruled that Venezuela should pay $46.4 million plus interest to Tidewater regarding the expropriation of the company’s eleven vessels.
On July 9, 2015, Venezuela filed with the Secretary-General of the International Centre for Settlement of Investment Disputes (“ICSID”) an application for annulment of the award, and asked for a stay of enforcement of the award in full. Venezuela also requested that the stay be maintained until the ad hoc committee issued its decision on the application for annulment.
The ad hoc commitee was constituted September 2015, and was composed of Judge Abdulqawi Ahmed Yusuf (Somali) as President; Tan Sri Dato’ Cecil W. M. Abraham (Malaysian) and Professor Rolf Knieper (German), as Members.
In response to Venezuela’s request, Tidewater requested the committee deny Venezuela’s request for an unconditional stay on enforcement of the whole award and that “at a minimum, the Committee should lift the stay with respect to the portion of the award that Venezuela’s application does not dispute – specifically US$35.462 million, plus interest.”
The committee, however disagreed with Tidewater on the amount of unchallenged portion, saying that the amount undisputed by Venezuela was $27.407 million, and not $35.4 million as asserted by Tidewater.
In its ruling brought on February 29, 2016, the committee lifted the stay of enforcement on the undisputed portion of the damages awarded by the Tribunal, which, as recognized by Venezuela during the Stay Hearing, amount to $27.407 million.
In response to the ruling, Tidewater revealed that the enforceable portion including interest since the expropriation in May 2009, now amounts to $37.2 million.
As for the remaining amount, Tidewater said: “Enforcement on the remaining balance of the award ($28.2 million after including interest from the date of expropriation and reimbursement of legal and other costs) will remain stayed until the conclusion of the annulment proceeding, which the company anticipates will occur this calendar year.”
The New Orleans-based company said intends to take appropriate steps to “vigorously enforce and collect the award”, however, it added, even with the partial lifting of the stay of enforcement, “the company recognizes that the collection of the award may present significant practical challenges.”
“Because the award has yet to be satisfied and the annulment proceeding is pending, the net impact of these matters on the company cannot be reasonably estimated at this time and the company has not recognized a gain related to these matters,” Tidewater said.
Offshore Energy Today staff