Order for Venezuela to pay Exxon $1.4 billion in damages overturned: lawyer

Thu Mar 9, 2017 9:08pm EST
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By Alexandra Ulmer

CARACAS (Reuters) - A World Bank tribunal's order for Venezuela to pay $1.4 billion in damages to Exxon Mobil Corp over nationalizations has been annulled, a lawyer for the Venezuelan government said on Thursday.

The case at the World Bank's International Centre for Settlement of Investment Disputes is one of many arising from nationalizations during late President Hugo Chavez's 1999-2013 rule of the South American OPEC member country.

"We were confident all along that our position was correct and are very pleased that the annulment committee agreed," Venezuela's lawyer George Kahale said.

A reduction to the overall $1.6 billion award would be welcome news to President Nicolas Maduro's cash-strapped government as it faces heavy foreign debt repayments amid a deep economic recession that has led to widespread shortages.

The ICSID ruling, dated Thursday, said "portions of the award" were annulled but did not give a breakdown of figures.

A spokesman for the U.S.-based oil company, Todd Spitler, did not confirm financial details, but said: "Exxon Mobil will continue to evaluate its legal rights and determine next steps."

Venezuela had challenged the 2014 award with various arguments, including that a previous decision from Paris-based International Chamber of Commerce to award Exxon $908 million should be deducted from the ICSID award.

Chavez, the firebrand socialist leader whose rule was cut short by death from cancer, nationalized a range of oil ventures, including the Cerro Negro heavy crude project and a smaller project called La Ceiba, both operated by Exxon.   Continued...

FILE PHOTO - The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York, New York, U.S. December 30, 2015.  REUTERS/Lucas Jackson/File Photo