Venezuela Withdraws From ICSID: President Hugo Chavez Follows Through on Threats to Abandon the Widely-Used Investor-State Arbitral Forum

Sullivan & Cromwell LLP - January 27, 2012

On January 24, 2012, the Government of Venezuela formally denounced the ICSID Convention, triggering its withdrawal from the investor-State arbitration forum. Venezuela’s decision follows the withdrawal of Bolivia and Ecuador from the Convention in 2007 and 2009, respectively. Venezuela’s withdrawal will take formal effect in six months. While pending ICSID proceedings will not be affected by the decision, Venezuela’s denunciation carries important consequences for both current and prospective foreign investors in Venezuela.