An international arbitration center has ordered Venezuela to pay British cattle company Vestey Group nearly $100 million for the nationalization of cattle ranches, pilling fresh pressure on the cash-strapped leftist government.
Venezuela’s late president Hugo Chavez in 2005 sent in soldiers to seize major ranches and repopulate rural areas largely abandoned since Venezuela’s oil industry took off in the 1920s.
Chavez’s nationalization drive, which also included the energy and steel industries, has landed Venezuela in dozens of major arbitration disputes, many of which have come to fruition in recent years.
The latest decision by the International Centre for Settlement of Investment Disputes (ICSID) comes at a terrible time for the OPEC member, which is reeling from a tumble in oil prices.
ICSID ordered Venezuela pay $98 million plus interest, according to a copy of the award seen by Reuters. The award was not yet available on the center’s website.
Specialized site Investment Arbitration Reporter first announced the award.
Venezuela has sought to annul or challenge several recent arbitration disputes.
Diego Brian Gosis, a lawyer for Venezuela, said the next steps were still being analyzed, but that the most-likely option was that Venezuela would seek to annul part or all of the award.
Vestey Group, a meat products company owned by Britain’s Vestey family, began operations in Venezuela at the start of the 20th century.
Chavez handed a thousand farmers the vast nationalized cattle land, though many who came hoping to grow arable crops found their harvest wiped out by flooding. Critics of Chavez’s drive to break up big ranches say most of them are in swampy plains only suitable for cattle raising.
(Reporting by Alexandra Ulmer; Editing by Tom Brown and Alan Crosby).