MONTERREY, Mexico, Dec 4 (Reuters) - Mexico’s Cemex (CMXCPO.MX)(CX.N), the world’s No. 3 cement maker, has begun arbitration proceedings against Venezuela after the country seized its assets, a source at the company said on Thursday.
Venezuelan President Hugo Chavez expropriated Cemex’s assets in August and rejected its call for $1.3 billion in compensation.
Cemex, unlike European rivals Holcim Ltd HOLN.VX and Lafarge SA LAFP.PA, did not enter into an agreement to sell its local assets to the Chavez government, which wants to control key industries in the country.
Monterrey-based Cemex, which operates in more than 50 countries, started the proceedings before the World Bank’s International Center for Settlement of Investment Disputes (ICSID) on Oct. 30, according to the center’s website.
“I can confirm that Cemex presented the arbitration request,” a source at the company told Reuters. “Now, representatives and the arbitrator must be chosen.”
Venezuelan ally Bolivia last year quit the World Bank body, saying its rulings were biased and it has urged Venezuela to do the same.
The Mexican government says Venezuela should keep negotiating with Cemex, which is counting on compensation money to help pay back some $6.6 billion in debt by the end of next year. (Reporting by Gabriela Lopez; Editing by Andre Grenon)