Holcim initiates arbitration proceedings against Venezuela

03.23.2009
 
 

Holcim Ltd has initiated international arbitration proceedings against the Republic of Venezuela before the International Centre for the Settlement of Investment Disputes ("ICSID") in Washington D.C. The Group seeks full compensation for the expropriation of its subsidiary, Holcim Venezuela, by the Venezuelan Government.

 

On April 3, 2008, the President of Venezuela publicly announced that the Government would nationalize the cement industry in Venezuela. On May 27, 2008, the President issued a Decree nationalizing Holcim Venezuela and the two other foreign-owned cement companies. The Nationalization Decree became effective on 18 June 2008.

 

Pursuant to the terms of the Nationalization Decree, the Venezuelan Government invited Holcim to negotiate the compensation for its nationalized assets. In the interest of reaching an amicable resolution, Holcim accepted the Government's invitation. On August 18, 2008, Holcim and Petróleos de Venezuela S.A. (PDVSA), acting on behalf of the Venezuelan Government, signed a Memorandum of Understanding by which they agreed in accord with the Nationalization Decree to proceed to negotiate an agreement that would effect the transfer from Holcim to PDVSA of 85 percent of the shares in Holcim Venezuela.

 

In accord with the Memorandum of Understanding, the parties proceeded to negotiate the terms of a share purchase agreement, but in October 2008 the Venezuelan Government ceased communications. No agreement was ever signed, and Holcim has received no compensation for the expropriated assets.

 

In its filing with ICSID, Holcim contends that Venezuela has breached its obligations to Holcim, under the Agreement between the Republic of Venezuela and the Swiss Confederation on the Reciprocal Promotion and Protection of Investments, dated November 18, 1993, by failing to pay the compensation required under those treaties for the expropriated assets. In the arbitration proceedings, Holcim intends to seek relief in the form of compensation equivalent to the full fair market value of all assets at the time of the nationalization, an amount substantially greater than the value placed on Holcim Venezuela for purpose of the transaction contemplated by the Memorandum of Understanding.

 

* * * * * * *
Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in more than 70 countries on all continents.
* * * * * * *

 
 
Didn't find what you were looking for?

Didn't find what you were looking for?

If you are interested in content published before 2011, please contact the Corporate Communications team at LafargeHolcim.

E-Mail