Tidewater Inc. v. Venezuela

A group of companies, including Tidewater Inc. and Tidewater Investment S.R.L. (SRL) (collectively, Tidewater) (plaintiffs) invested in maritime service companies in Venezuela (defendant). In February 2010, Tidewater filed an arbitration against Venezuela with the International Centre for Settlement of Investment Disputes (ICSID), alleging that Venezuela had unlawfully expropriated Tidewater’s investments without compensation. Tidewater asserted that the ICSID’s jurisdiction was based on Article 22 of Venezuela’s Investment Law, which Tidewater claimed constituted a standing consent to ICSID arbitration, or alternatively, that there was a bilateral investment treaty (BIT) between Venezuela and Barbados, both of which countries were parties to the ICSID Convention. SRL was formed under the laws of Barbados. Venezuela disputed the ICSID’s jurisdiction, arguing that Article 22 did not constitute a standing consent to ICSID arbitration and that SRL was incorporated for the sole purpose of gaining access to ICSID. Venezuela maintained that Tidewater’s invocation of the BIT was an abuse of the treaty. The ICSID’s arbitration panel (the tribunal) set a date to decide the jurisdictional issues. In the meantime, the parties agreed to use the discovery rules provided by the International Bar Association (IBA Rules) as guidance. The parties exchanged document requests and encountered disputes regarding whether production was required for certain requests. Among the disputed categories were Tidewater’s requests for documents related to the preparation and drafting of Article 22 and Venezuela’s request for documents related to SRL’s formation and service agreements supporting Tidewater’s claim of expropriation. The tribunal was called upon to resolve the discovery disputes prior to the resolution of the jurisdictional issues.