Summary

FINAL AWARD (QUANTUM)

ARBITRAL TRIBUNAL:
H.E. Judge Peter Tomka (Presiding Arbitrator)
The Honourable L. Yves Fortier PC CC OQ QC
Professor Marcelo Kohen

TABLE OF CONTENTS

I. THE PARTIES
II. OVERVIEW OF THE DISPUTE
III. PROCEDURAL HISTORY
IV. RELEVANT LEGAL PROVISIONS
V. REQUESTS FOR RELIEF
A. CLAIMANT'S REQUEST FOR RELIEF
B. RESPONDENT'S REQUEST FOR RELIEF
VI. ISSUES ON QUANTUM
A. CAUSAL LINK
1. Claimant's Position
a) The Respondent's breach of the Treaty
b) The damages that flow from the Respondent's breach
2. Respondent's Position
a) The Respondent's breach of the Treaty
b) The damages that flow from the Respondent's breach
3. Tribunal's Analysis
B. PRE-AWARD INTEREST
1. Claimant's Position
2. Respondent's Position
3. Tribunal's Analysis
C. INTEREST RATE
1. Claimant's Position
a) Interest rate equivalent to Petroritupano's cost of equity
b) Alternative interest rates
2. Respondent's Position
a) Interest rate equivalent to Petroritupano's cost of equity
b) Alternative interest rates
3. Tribunal's Analysis
D. COMPOUND INTEREST
1. Claimant's Position
2. Respondent's Position
3. Tribunal's Analysis
VII. TAXES
VIII. COSTS
1. Claimant's Position
a) Allocation of costs
b) Amount of costs
2. Respondent's Position
a) Allocation of costs
b) Amount of costs
3. Tribunal's Analysis
IX. DECISION..................................................................................................................................38

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II. OVERVIEW OF THE DISPUTE

3. This arbitration concerns a dispute between the Claimant and Venezuela arising out of the Claimant's investment in the mixed company Petroritupano S.A. ("Petroritupano"), submitted to arbitration on the basis of the Agreement between the Government of Barbados and the Republic of Venezuela for the Promotion and Protection of Investments (the "Treaty"), and the Arbitration Rules of the United Nations Commission on International Trade Law, 15 December 1976 (the "UNCITRAL Rules").

4. In its Partial Award on Jurisdiction and Liability, dated 5 February 2021 (the "Partial Award"), the Tribunal unanimously decided that, for the reasons set out therein:

1. The Tribunal has jurisdiction in the present case;

2. The Bolivarian Republic of Venezuela breached its obligation under Article 2, paragraph 2, of the BIT by carrying out discriminatory measures impairing the Claimant's enjoyment of its investment;

3. The Bolivarian Republic of Venezuela is liable to pay compensation to the Claimant for the breach committed in an amount to be determined in the subsequent stage of the proceedings;

4. All other claims are rejected;

5. The decision on costs is reserved for the final stage of the proceedings; and

6. The Tribunal shall issue, after ascertaining the views of the Parties, directions for the further conduct of the proceedings relating to the quantum.

5. This Final Award determines the amount of the compensation to be paid by the Respondent as a result of the breach committed.

6. The Interim Award on Jurisdiction, issued by the Tribunal on 26 July 2016, and the Partial Award (Jurisdiction and Liability), issued by the Tribunal on 5 February 2021, constitute an integral part of this Final Award.

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IX. DECISION

107. For the reasons set forth above, the Tribunal decides that:

1. The Respondent, the Bolivarian Republic of Venezuela, shall pay compensation to the Claimant, Venezuela US, S.R.L, in the amount of US$ 58,870,898;

2. The Respondent shall pay to the Claimant interest on the amount awarded under sub-paragraph 1 above, accrued between 31 May 2011 and the date of this Final Award, in the amount of US$ 46,624,436;

3. The Respondent shall pay to the Claimant interest on the amounts awarded under sub-paragraphs 1 and 2 above, from the date of this Final Award until the date of full payment of these amounts, at the rate of twelve-month USD LIBOR plus a margin of four percent (4%) with annual compounding of the accrued interest;

4. Should, for any reason, twelve-month USD LIBOR cease to be operative while any amount remains outstanding under sub-paragraphs 1 to 3 above, the interest due shall be calculated from that date onward on the basis of whatever rate is generally considered equivalent to twelve-month USD LIBOR plus a margin of four percent (4%) with annual compounding;

5. If, within two months following the date of this Final Award, the Claimant is paid by Petroritupano or CVP the amounts due under sub-paragraphs 1 to 4 above, the Claimant shall be prevented from seeking enforcement of these amounts;

6. Upon compliance by the Respondent with this Final Award, the Claimant shall be precluded from requesting from Petroritupano or CVP the payment of the amounts determined in sub-paragraphs 1 to 4 above;

7. The Respondent shall pay the Claimant EUR 615,056.47 for the costs of this arbitration borne from the deposit held by the PCA and US$ 3,215,534.99 for the costs of legal representation and assistance incurred by the Claimant, plus simple interest at a rate of six percent (6%), from the day one month following the date of this Final Award until the date of full payment of these amounts;

8. All the above payments to the Claimant by the Respondent shall be free of any taxation in the Bolivarian Republic of Venezuela; and

9. All other claims by the Parties are rejected.

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Arbitrator Professor Marcelo Kohen makes the following declaration:

"Without prejudice to my positions taken in the two prior Partial Awards, I subscribe to the decision of the Tribunal on quantum because I consider that the solution chosen is one among those that are possible under the circumstances of the case and in line with its precedent awards. Indeed, contrary to aspects of jurisdiction or the merits, in matters of reparation the Tribunal disposes of some margin of discretion in order to decide which are the consequences arising from the commission of an internationally wrongful act. "