miércoles, 13 de agosto de 2008

Will TSJ have a flash of sanity?

VENECONOMY - Revealing its displeasure over the two arbitration cases before US courts filed by ExxonMobil in legitimate defense of its rights, the Bolivarian Government is trying to get its acolytes at the Supreme Tribunal of Justice (TSJ) to fabricate a “legal” solution that would eliminate the possibility of being brought before international arbitration courts in the future.This week it was reported that the legal advisors of PDVSA and the Ministry of Energy and Oil requested the TSJ for an interpretation of Article 258 of the Constitution (which promotes arbitration) and Article 22 of the Investment Promotion and Protection Law (which guarantees the right of investors to settle disputes via arbitration) .According to the complainants, neither of these articles constitutes an authorization for resorting to international arbitration. As they see it, international arbitration is not a substitute for the entities of Venezuela’s justice system, nor can it be considered to mean supranational courts. What they want, therefore, is for the TSJ to hand down a decision so that, henceforth, international arbitration may only be resorted to once a national court has expressly authorized it on a case-by-case basis.This legal contrivance that they are attempting to devise ignores the fact that, under no circumstances, would a foreign company expose itself by signing contracts or agreements in a country unless it is protected from the outset by a clause that guarantee its investments in the event of a dispute or litigation. And the possibility of that happening is much reduced in present-day Venezuela, where the branches of government barefacedly kowtow to the plans of the Executive.If the TSJ admits this request, from now on the country will find it even more difficult to attract foreign investment than it does now, which has contracted by 116.4% since 1999. In order to attract foreign capital, be it from the private or the public sector, Venezuela must play strictly by internationally accepted game rules and refrain from inventing legal loopholes to get around them, otherwise it will find itself blackballed.It is incongruent that the very government that enacted a foreign investment law that guarantees investors the right to settle disputes with their Venezuelan partners before international courts is now trying to restrict that right, which, apart from anything else, is guaranteed in practically all the bylaws of international authorities to which Venezuela is signatory.This request even runs counter to Venezuela’s proposal to create a regional arbitration body, approved at the Unasur Summit held a few months ago in Brazil, the intention of which is to replace the World Bank’s Centre for Settlement of Investment Disputes (ICSID).It would be logical to expect that the TSJ, in a moment of sanity, would tell PDVSA that its request has no merit so that, in the future, the country is not faced with having to pay the price of being unable to find sound, reliable partners for its development projects

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