Fábrica de Vidrios Los Andes, C.A. & Owens-Illinois de Venezuela, c.a. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/21, Award, 13 November 2017

Abstract

In an ICSID decision dated 13 November 2017, the Fábrica tribunal took an approach on the interpretation of consent under Article 72 of the ICSID Convention contrary to other ICSID tribunals before it. The tribunal found that it lacked jurisdiction in the case despite the Claimants filing the application before Venezuela’s denunciation of the ICSID Convention was to take effect. The tribunal held that the Claimants had not satisfied the standard of consent and that consent under the ICSID Convention is not unilateral but must be perfected to establish jurisdiction under the Convention. Although other tribunals in contextually similar cases have instead interpreted Article 71 of the ICSID Convention to assert their jurisdiction, the tribunal in the present case differentiated between Articles 71 and 72 of the Convention to arrive at a contrary conclusion. The impact of this decision is likely to be extensive, as a State party has essentially been allowed to strategically withdraw from the ICSID Convention with immediate effect and without due regard to the six-month notice period. The success of the majority shareholders of the Claimant company in the parallel arbitration precludes the suggestion of a denial of justice. However, the tribunal’s decision on jurisdiction brings uncertainty to the formerly uncontested significance of observing the given notice period before a denunciation of the ICSID Convention can be effected.