The Venezuela Awards: Tribunals Should Not Rule Out Expropriation Risk

12 Pages Posted: 27 May 2017

Date Written: April 28, 2017


This paper is a commentary to Marcos García Domínguez, Calculating Damages in Investment Arbitration: Should Tribunals Take Country Risk into Account? 34 ARIZ. J. INT’L & COMP. L. 93 (2017), where the author reached the conclusion that arbitral tribunals in investor-state arbitrations should include the country risk premium discount as part of the equation for determining the quantum of damages but should never include the risk of expropriation sub-component of country risk. This commentary agrees with the first part but argues that there is little legal or doctrinal support for the second and most radical assertion.

At the root of the problem are a number of awards from the late part of 2014, all involving expropriations in Venezuela (the “Venezuela Awards”), where the tribunals adopted seemingly dissimilar approaches regarding the issue of inclusion/exclusion of expropriation risk from country risk analysis. For some in the arbitration community, the different conclusions reached in the Venezuela Awards regarding the allocation of expropriation risk are simply irreconcilable because the factual similarity present in the three cases should have led to similar outcomes.

While this commentary agrees that the tribunals missed the opportunity to provide clear reasoning in support of their conclusions on the issue of expropriation risk, I argue that the holdings in the Venezuela Awards, if read in conjunction with the specific facts of each case, can indeed shed some light over the tribunals’ lines of reasoning.

Keywords: Damages, Investment Arbitration, Expropriation, Country Risk

Suggested Citation

Bergolla, Luis, The Venezuela Awards: Tribunals Should Not Rule Out Expropriation Risk (April 28, 2017). 34 ARIZ. J. INT’L & COMP. L. 123 (2017), Available at SSRN:

Luis Bergolla (Contact Author)

Stanford Law School ( email )

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Stanford, CA 94305-8610
United States
+12022859787 (Phone)

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