A Foley Hoag LLP legal team has turned aside a billion-dollar claim against Venezuela by Vannessa Ventures, a Canadian mining company that alleged Venezuela violated its investment treaty with Canada by, among other actions, refusing to approve Vannessa’s 2001 purchase of Venezuelan mining company MINCA and rescinding Venezuela’s contract with MINCA for the development of a gold and copper mine in Venezuela.
The decision ends more than eight years of arbitration which began in July 2004, when the International Centre for Settlement of Investment Disputes (“ICSID”) received a request from Vannessa Ventures for arbitration against Venezuela under ICSID’s Additional Facility Rules.
Foley Hoag partner Ronald E.M. Goodman, leader of Venezuela’s defense since 2004, headed the legal team from the firm’s International Litigation and Arbitration Department that included fellow partners Paul Reichler, Janis Brennan and Mélida Hodgson, and counsel Alberto Wray.
Goodman commented, “This is a very significant triumph for Venezuela and its people. While Venezuela has had a number of prior victories, this was its first victory on the merits in a major investor-State case. The case has significance for other cases involving the protection of sovereign rights over natural resources.”
The Claimant’s subsidiary MINCA had contract rights to develop the Las Cristinas gold and copper mine, which is located in the Venezuelan state of Bolívar. Venezuela owned a minority share of MINCA and objected when MINCA suspended without government approval its work on the mine for more than a year and when then-majority owner Placer Dome, a major Canadian mining company, sold its interest in MINCA for $50 to Vannessa, a junior mining company without significant experience in mining. Venezuela acted to terminate MINCA’s contractual rights and to take back the Las Cristinas mine. The three-member Tribunal unanimously rejected Vannessa Ventures’ arguments that its assets had been discriminated against, expropriated or treated unfairly and inequitably.