Venezuela Ordered to Pay $46 Million to Tidewater Over Seized Vessels

By Alexandra Ulmer

CARACAS, March 15 (Reuters) – A World Bank tribunal has ordered Venezuela to pay oil service firm Tidewater round $46 million in compensation for seized vessels, in a call the South American nation hailed as a victory.

The declare, one in all many comparable circumstances, stems from the 14-year rule of late chief Hugo Chavez, who made sweeping nationalizations a cornerstone of his socialist administration.

However, this award is much smaller than the hefty arbitration selections which have hit cash-strapped Venezuela in current months.

Eleven Tidewater ships had been seized in 2009 by Venezuelan authorities after signing a regulation to nationalize them, in accordance with Tidewater.

“The much higher amounts claimed were rejected because the tribunal found that the nationalization was lawful,” lawyer George Kahale, who represented Venezuela within the case, instructed Reuters on Sunday.

“Venezuela’s positions on the central issues of the legality of the nationalization, the appropriate valuation date for determining compensation, and the appropriate discount rate for calculating compensation were all accepted by the tribunal in what is likely to be an important precedent for other cases,” added Kahale, of Curtis, Mallet-Prevost, Colt & Mosle LLP.

The award consists of some $44 million in invoices owed.

When requested whether or not the OPEC nation would possibly search revisions or the annulment of the award, Kahale mentioned the choice can be “carefully reviewed.”

Venezuela was this month ordered to pay U.S. bottle maker Owens-Illinois over $455 million. Last 12 months, the World Bank’s International Center for Settlement of Investment Disputes (ICSID) ordered it pay Exxon Mobil Corp $1.6 billion. (Editing by Alison Williams)