ExxonMobil's US$1.4 billion claim against Venezuela: ICSID panel member Cecil Abraham's appearance of bias may be grounds for successful appeal.

by Ganesh Sahathevan

Venezuela shrinks nationalization payment to 

Exxon

This writer has previously noted of that prominent Malaysian jurist, Tan Sri Cecil Abraham:

Cecil is often in the news.Sarawak Report has the most recent report:
Murder Cover-Up Case Nets Najib, Rosmah and Lawyers Cecil Abraham & Shafee Abdullah

Having said that, Cecil has also been featured on the Global Arbitration Review new-site:

Cecil Abraham has been active on various International Centre for Settlement of Investment Disputes (ICSID) annulment committees in cases against Venezuela. He sat on panels that chopped US$1.4 billion from an award in favour of ExxonMobil; reduced an award in favour of oil services company Tidewater by US$10 million; and upheld the dismissal of a US$150 million claim concerning a fertiliser expropriation.


ExxonMobil has  appealed and on 26 October 2018 Global Arbitration Review reported:

ExxonMobil has resubmitted a claim against Venezuela to ICSID, after an annulment committee dramatically slashed US$1.4 billion from an award the oil group secured in 2014, concluding that the original tribunal had exceeded its powers.

However, tribunal member Cecil Abraham's entanglement with ex-PM Najib does bring him into the orbit of the 1MDB mess.Indeed, it was Cecil who so brilliantly put that highly creative, winning argument that Najib was not a public officer, in an 1MDB related matter brought by new PM Mahathir Mohamad.


Being entangled with Najib, it is now open to ExxonMobil to challenge the ICSID's  decision in favour of Venezuela on the additional grounds of Cecil's  appearance of bias, for Venezuela and Malaysia are linked by PetroSaudi, a company which is being sued by Venezuela for the recovery of millions of dollars lost 

in an oil services deal, which PetroSaudi financed out of  money  stolen from 1MDB. Malaysia and Najib did not need the complication of a massive decision against Venezuela , and had every reason to see that Venezuela kept whatever little money that socialist paradise turned nightmare retained in its treasury.That gives rise to an appearance of bias, and it  is probably sufficient to throw out Cecil's ICSID decision in favour Venezuela.

END 

Reference

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Venezuela Issues Criminal Prosecution Against Ex-Oil Minister Over PetroSaudi Contract....

• 27 January 2018
 
• 4

There has been a dramatic development in the on-going row between Venezuela and PetroSaudi over the off-shore oil contract that was funded by the 1MDB investment in the Saudi-owned company.

Late last week, the country’s top prosecutor issued criminal proceedings and applied for an international arrest warrant for the former powerful Petroleum Minister, Rafael Ramirez, for the “crimes of intentional embezzlement, money laundering and association”, specifically referring to the so-called “ghost ship” contract with PetroSaudi.

“Ramírez you have to answer to justice for this case, for the case of factor K, and the scrap ship Saturn belonging to the ghost company Petrosaudi,” The chief prosecutor  Tarek William Saab is reported as having demanded.

During a press conference, the prosecutor announced that they will request an arrest warrant, as well as Interpol’s red alert, against the former oil minister, Rafael Ramírez, for the “crimes of intentional embezzlement, money laundering and association.”Saab assured that Ramírez is involved in the case that they qualified as “the ghost ship”, making reference to the “vessel for offshore gas exploitation Petro Saudi Saturn”. He recalled that “the boat was rented in a closed contract for seven years, of which although 60% of the time it was inoperative. By the time it was stopped, a total of US$1,175,000 million 300 thousand dollars had been paid in rental costs, even though the boat did not work. The former president of PDVSA is linked to the case of the Office of Marketing Intelligence and Petroleum Policy, based in Vienna. [Translation]

According to the prosecutors the money lost through PetroSaudi was part of US$11 billion stolen from the state oil company PDVSA, of which Ramirez was also head, during his tenure.  Prosecutors say this was down to corruption, however Ramirez, who has fled the country and is believed to be hiding in the United States, is putting the matter down to his political rivalry with the current President Maduro.

Venezuela has put out a request to Interpol and is believed to be waiting on their response.  Meanwhile, the court filings of the US Dept of Justice made clear last year that none of the profits accrued by PetroSaudi from this unequal deal were returned to 1MDB, which had put in the original investment as part of an alleged joint venture and then series of loan arrangements to the company.

Likewise it has emerged that the two dud drill ships owned by PetroSaudi were the sole assets on which 1MDB’s alleged $2.3 billion Cayman Island investment portfolio was based, thanks to criminal over-valuations procured on behalf of the Malaysian fund by Najib’s advisor Jho Low and a ring of collaborators based at BSI Bank (now closed following investigations into the scandal in Switzerland and Singapore).

With a court battle now underway the full details of the once secretive dealings between PetroSaudi and Ramirez’s team at PDVSA are likely to be laid bare in open court, which should provide even more details for Malaysians about where all their money went.

After all, Prime Minister Najib Razak continues to maintain there was “no wrong-doing”, 1MDB still claims it cashed out from the deal with a $2.3 billion sale of its interest and PetroSaudi has claimed that documents used by Sarawak Report to expose the thefts of hundreds of millions of dollars from 1MDB were ‘doctored’ and forged.