CARACAS (Reuters) - Venezuelan opposition leader Juan Guaido will seek to annul an $8.7 billion arbitration award to U.S. oil producer ConocoPhillips as he moves to preserve foreign assets, Guaido’s chief legal representative said on Tuesday.
If accepted, the annulment request would halt enforcement of the award over the 2007 loss of Conoco’s projects in the South American country. It would follow a March decision by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) to impose the largest arbitration award against Venezuela.
Jose Ignacio Hernandez, whom Guaido has tapped as a special prosecutor, told Reuters his team separately has challenged the amount of the ICSID award, claiming “the methodology to determine the compensation was errant.”
Conoco would see no merit in a request for “annulment or rectification” and would “strongly defend” against such requests, company spokesman Daren Beaudo said.
George Kahale, a U.S. attorney who represented the Venezuelan government before the World Bank tribunal, did not immediately respond to a request for comment. Venezuela’s information ministry also had no immediate response to a request for comment.
An annulment would be a boost to Guaido, who in January invoked a constitutional provision to assume an interim presidency. Backed by the United States and dozens of other countries, Guaido argues President Nicolas Maduro’s 2018 re-election was illegitimate.
Hernandez has been assigned to protect Venezuela’s assets abroad from possible seizure by creditors.
Cash-strapped Venezuela has balked at paying in other arbitration cases. Conoco has used legal seizures of Venezuelan oil assets to enforce earlier claims. Other creditors are attempting to seize shares in U.S. refiner Citgo Petroleum, Venezuela’s prize overseas asset, to collect on debts.
It was unclear if Guaido’s representatives have standing to challenge the award since the World Bank has not recognized Guaido. An ICSID spokesman said the body was not in a position to provide any further information on the case.
David Malpass, the newly named president of the World Bank, said last week that recognition would be up to its shareholders.
Hernandez said Guaido’s legal representation “cannot be questioned.”
Last month, a U.S. judge ruled that Guaido’s representatives could present arguments in a court battle with Canadian mining company Crystallex, which is pursuing Citgo to collect on an arbitration award in compensation for Venezuela’s expropriation of a gold mining project.
Venezuela’s nationalization wave, led by late President Hugo Chavez as part of his Socialist project, led to more than 20 international arbitration claims, which remain mostly unpaid.
Additional reporting by David Lawder in Washington; editing by Gary McWilliams, Tom Brown and Dan Grebler