National Report for the Venezuela (2020)

This National Report describes the legal framework of domestic and international arbitration in the Bolivarian Republic of Venezuela (“Venezuela”). It includes the most relevant and recent case law, and other important aspects that have shaped the development and use of commercial and investment treaty arbitration in recent times. This Report also discusses the regulation and use of mediation/conciliation given its distinction – alongside arbitration – as a non-judicial form of dispute resolution. The description offered here also considers the social, economic and political context insofar it is relevant to the discussion about arbitration in Venezuela. This Report is divided into nine chapters, including this introduction (Chapter I). Chapters II to VII cover different aspects of commercial arbitration, from the arbitral agreement to the means of recourse against the award. Chapter VIII discusses the current state of mediation/conciliation in Venezuela, and Chapter IX addresses the main issues involving investment treaty arbitration. An unofficial English translation of the Commercial Arbitration Law of 1998 (Ley de Arbitraje Commercial, “CAL”) is included as Annex I. Venezuela modernized its arbitration legislation in the late twentieth century with the ratification of five major treaties, the enactment of a special commercial arbitration statute, and the inclusion of a constitutional provision granting arbitration – and other alternative dispute resolution mechanisms – a preeminent place in the country's legal system. (1) In addition – during the nineties – Venezuela entered into a number of bilateral investment treaties (“BITs”) with other countries, which included arbitration provisions as the exclusive means to resolve any disputes arising between foreign investors and Venezuela as a host state. As we will explain later, some of these BITs, noticeably the ones with The Netherlands, Canada and Spain, served as the basis for a number of investor-state arbitration claims brought against Venezuela during the last decade. Most of the cases arose from the expropriations of assets by the Venezuelan government, which affected both domestic and foreign investors and garnered the attention of the international arbitration community. Predictably, after the initial upsurge of claims logged against Venezuela, the government terminated the BIT with the Netherlands, denounced the ICSID Convention, and took other protective measures to prevent future claims. We discuss some of the issues surrounding investment arbitration in Chapter IX. Since the majority of this report is focused on commercial arbitration, the following chapter describes laws adopted, and the most relevant judicial decisions that have contributed to shape the development of arbitration in Venezuela. The subsequent parts if this report will delve into other important features of this dispute resolution mechanism, thus offering a comprehensive picture of its current status.

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