Vannessa Ventures LTD v Venezuela (Award) (ICSID Additional Facility Rules, Case No ARB (AF)/04/6, 16 January 2013)
(2014) 15(1) The Journal of World Trade and Investment 305-313
9 Pages Posted: 25 Dec 2013 Last revised: 21 Apr 2015
Date Written: December 22, 2013
This case note examines the January 2013 arbitral award in Vannessa Ventures v Venzuela. Vannessa Ventures claim alleging expropriation of its investment in a mining joint venture project was rejected by the Tribunal, which found that Venezuela's actions were legitimate responses to breaches of contract. The importance of the decision stems from the Tribunal’s treatment of a challenge to jurisdiction brought by Venezuela on the basis that Vannessa Venture's investment did not qualify for protection under the relevant bilateral investment treaty (‘BIT’) as it was not made in good faith. The majority of the Tribunal adopted a narrow reading of the BIT and found that good faith was not relevant to the meaning of ‘investment’ and thus to the question of jurisdiction. This looser definition of investment leaves states vulnerable to legal manoeuvres and technical transfers to facilitate claims under BITs, notwithstanding an ‘investor’ lacking any intention to make a profit or enterprise from the subject matter of the claim. Further, the Tribunal itself was divided on this point, demonstrating the lack of clarity that exists in relation to this area of investment arbitration law.
Keywords: jurisdiction, notion of investment, purchase of legal claim, good faith, expropriation
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