Venezuela has withdrawn from a World Bank arbitration panel, the foreign ministry said on Wednesday, a move unlikely to help the South American nation avoid what could be billions of dollars in payouts for close to 20 arbitration proceedings against it.
The government of President Hugo Chavez said this month the country would pull out of the World Bank's International Center for Settlement of Investment Disputes, or ICSID, after a separate tribunal ordered Venezuela to compensate U.S. oil giant Exxon Mobil following a 2007 nationalization."The Constitution of Venezuela of 1999 invalidates, in spirit and letter, the conditions of this convention," the foreign ministry said in a statement, referring to the convention that created the ICSID.
The ministry said Venezuela signed this agreement in 1993 under a "weak transitional government... that was pressured by transnational sectors that participated in destroying Venezuela's sovereignty."
Analysts say it could take months or years for Venezuela to exit the tribunal, and that it will still have to pay any compensation ordered by the ICSID in pending cases mostly spurred by years of nationalizations led by Chavez.