Living up to its reputation as possibly the world’s worst-managed economy, the Venezuela government is appealing the US$1.6billion settlement against Exxon by the World Bank’s International Centre for Settlement of Investment Disputes, or ICSID.
Exxon had originally wanted $20 billion out of the deal; arbitrators awarded it just $1.6 billion, $600 million of which had already been paid.
The country must honor ICSID rulings to avoid default of sovereign bonds; by having the ICSID provisionally stay the enforcement of the award, Venezuela buys time.
Francisco Toro speculates,
One of two things is going on here. Either the super-fancy and well-worth-top-dollar New York Law Firm representing Venezuela at ICSID, Curtis Mallet-Prevost, has persuaded Ramírez they can get an even better settlement on appeal or the government is now so strapped for cash they’re willing to try any delaying tactic to avoid having to pay up right away.
I don’t know which one it is.
I don’t either, and considering how Nicolas Maduro opened his campaign by saying he talked to Chavez, who is now a bird , maybe he (and his cohorts) went by Chavez’s 2012 promise that Venezuela will not recognize World Bank ruling in the Exxon case.
All you can be sure of is that law firm Curtis Mallet-Prevost will make money out of this, and, as I said last month, that Venezuela has no intention to pay Exxon.