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Editorial Commentary
VenEconomy:
Desperation, cynicism or ignorance?
Last week, the National Assembly rejected the alleged “action of economic and judicial terrorism” that, according to its members, ExxonMobil (and its “accomplices”) is taking against PDVSA. It also requested that lawsuits be filed against former parliamentarians and government officials who approved the contracts signed as part of the opening up of the oil sector in the 90s, calling them “traitors.”
The majority of government spokesmen, and many outside the government, are calling the signing of agreements and alliances with foreign investors that included clauses providing for the settlement of disputes before international courts and arbitration centers acts of treason.
Those who adopt this position reveal either their total shamelessness or crass ignorance, to say the least.
It is very difficult for anyone not to know that, today, no foreign company anywhere will run the risk of signing agreements or contracts in Venezuela unless they include clauses that guarantee their investments against possible disputes or future lawsuits. It is more than evident that foreign investors will only come to the country if there are sufficient guarantees to protect their capital.
Much less can anyone be unaware that only impartial, objective courts are capable of handing down fair decisions for all parties involved in litigation. And it cannot be ignored that, in Venezuela, it is practically impossible to find a court that is allowed to act impartially in cases against the Chávez administration.
That being the way things are, anyone who maintains that submitting contractual disputes to the decisions of international arbitration courts is treason is either a cynic or a loudmouth.
Not only that, those who now criticize and condemn arbitration clauses, forget that it was this same Chávez administration that promulgated the Law on Foreign Investments in Venezuela, which guarantees investing companies the right to settle any disputes they may have with their Venezuelan partners before international courts.
These gentlemen also forget that these guarantees are a two-way street, because, just as they protect foreign companies, they could also protect Venezuelan companies and the Venezuelan Government should they wish to enforce a court decision abroad at some future date.
Apart from that, they also seem to forget that all the bonds of the Republic of Venezuela issued in recent years include clauses that say, “Venezuela agrees to submit to the justice of the Federal Court of the United States, the State Court of New Cork, and the courts of England” and that it relinquishes “some (other) immunities and defenses.”
And most important of all, they forget that Venezuela is part if a community of countries with which it seeks and needs to trade and that, therefore, it is imperative that it respect the game rules that have been agreed, if it does not want to be abominated by that same community
VenEconomy is a Venezuela's leading specialized publisher in the economic and financial area. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.
Editor's Note: This commentary was originally published by VenEconomy, on 02/20/2007. Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 02/21/08
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