Elisabeth Eljuri quoted in Latin Lawyer article on Venezuela pulling out of Dutch Bit
Latin LawyerNovember 18, 2008
Elisabeth Eljuri, managing partner of Macleod Dixon's Caracas office, was quoted in an article for Latin Lawyer regarding Venezuela's recent withdrawl from the Netherlands bilateral investment treaty. The 15 year old treaty, which was used to launch a number of arbitrations against the South American country, was terminated last week.
Elisabeth Eljuir says the decision will not dramatically change Venezuela's foreign investment panorama. "Companies will consider other venues for incorporating the vehicles they will use to invest in Venezuela. There are other choices, both for tax and investment protection reasons, that also make sense."
The treaty stipulates that prior investments are protected for a 15-year period from termination. However Eljuri explains that the meaning of "prior investments" under international investment law is unlcear as treaty terminations or non-renewals are quite rare.
"There are many interesting scenarios that arise from the question of what is in fact covered as a 'prior investment.' For instance, what happens with profits that are reinvested by the shareholders into the Venezuelan projects after November 1? What happens to expansions of existing projects?" she asks.
The article summarizes in saying that 'Venezuela's move won't derail existing arbitrations, however unless a new treaty is agreed upon by the two governments, possible future investments into Venezuela from the Netherlands will not enjoy similar legal protection.'