Case Note: Gambrinus, Corp v Bolivarian Republic of Venezuela (Decision on Annulment)

Abstract

... During the 1990s, Venezuela sought private partners to participate in the development of a fertilizer production facility through a state-owned entity, Perquiman de Venezuela S.A. (‘Pequiven’) in order to increase its production of fertilizers. Consequently, Pequiven along with Inversiones Polar S.A. (‘Polar’), Koch Minerals S.a.r.l. (‘Koch’), and Snamprogetti B.V. (‘Snamprogetti’)1 concluded a Joint Investors Agreement on 8 April 1998 (JIA) setting forth the contractual framework for the construction, operation, and investment terms of four plants (the ‘Project’).2 The salient features of the investment by the four joint investors (also referred to as ‘Owners’ under the JIA) were as follows: ... On 21 January 2008, Polar decided to transfer all its interests in Fertinitro to Gambrinus Corporation (‘Gambrinus’). Polar notified the other Owners of its decision in accordance with section 6.2 of the JIA and section 12(b) of the articles of incorporation and by-laws of certain companies of the Fertinitro group (the ‘Fertinitro By-Laws’).6 Interestingly, Polar had requested the other Owners to waive the 30-day prior notice requirement contemplated under the JIA for transfers to affiliates, which was agreed to by the Owners.7 Accordingly, Polar and Gambrinus executed a share purchase agreement on 24 January 2008, pursuant to which Gambrinus would pay USD 80,000,100 for Polar’s 10 per cent equity interest in Fertinitro (‘2008 Transfer’). On the same date, the secretary of Fertinitro’s Board sent an e-mail to the Director stating that the 2008 Transfer complied with the requirements under the purchase and financing documents, including section 6.2 of the JIA.8