## Facts

- ExxonMobil-affiliated companies invested in two Venezuelan oil projects, Cerro Negro and La Ceiba, under arrangements with the State or state-controlled entities.
- Beginning in 2004, Venezuela imposed fiscal measures (including increased royalties and taxes) that materially affected the projects.
- In 2005–2006, after the fiscal measures but before nationalization, the investor group restructured ownership to insert a Dutch holding company (Venezuela Holdings, B.V.) to obtain protection under the Netherlands–Venezuela bilateral investment treaty (BIT).
- In January 2007, Venezuela decreed nationalization of the projects and later took control of the investments, generating disputes over legality and compensation.
- In September 2007, the claimants commenced ICSID arbitration, invoking (1) Article 22 of Venezuela’s Investment Law and (2) Article 9 of the Netherlands–Venezuela BIT as jurisdictional bases.
- Venezuela objected to jurisdiction, arguing (among other points) that Article 22 lacked ICSID consent and that the restructuring was an abuse of right, particularly as to disputes arising before restructuring.

## Issues

1. Whether Article 22 of Venezuela’s Investment Law constitutes clear and unequivocal consent to ICSID arbitration.
2. Whether Article 9 of the Netherlands–Venezuela BIT confers jurisdiction over the claimants’ asserted direct and indirect investments.
3. Whether restructuring to obtain BIT protection constituted an abuse of right barring jurisdiction, especially for disputes arising before the restructuring.

## Decision

- The tribunal held that Article 22 of the Investment Law did not contain Venezuela’s clear and specific consent to ICSID arbitration and could not independently establish jurisdiction.
- The tribunal found jurisdiction under Article 9 of the Netherlands–Venezuela BIT for the Dutch claimant (Venezuela Holdings, B.V.) and its covered investments, including indirect interests, subject to temporal limits.
- Applying the abuse-of-right doctrine, the tribunal declined jurisdiction over claims tied to measures and disputes that arose before the restructuring.
- The tribunal upheld jurisdiction over claims based on measures occurring after the restructuring, including the 2007 nationalization and related actions.

## Legal Principles

- A state’s consent to ICSID arbitration must be clear and unequivocal; general statutory references to “international arbitration” are insufficient absent specific ICSID consent.
- BIT protections may extend to indirect investments held through corporate chains when the treaty covers such forms of investment and the claimant qualifies as a covered investor by incorporation.
- Corporate restructuring to obtain treaty protection is permissible when undertaken before a dispute arises; restructuring aimed at converting an existing dispute into a treaty claim can constitute an abuse of right.
- Abuse of right may operate as a jurisdictional limitation by excluding claims relating to pre-restructuring disputes while permitting claims arising from later state measures.

## Conclusion

The tribunal rejected jurisdiction based on Venezuela’s Investment Law, sustained jurisdiction under the Netherlands–Venezuela BIT for the Dutch investor’s post-restructuring claims, and used abuse of right to bar treaty jurisdiction over disputes that had already arisen before the ownership restructuring.


Mobil Corp. v. Bolivarian Republic of Venez., ICSID Case No. ARB/07/27, Decision on Jurisdiction (June 10, 2010)