Latin America Herald Tribune |
Tea Party Koch brothers sue Venezuela over $400 million expropriation
After years of litigation at the World Bank’s International Center for the Settlement of Investment Disputes arbitration panel (ICSID), the Koch Brothers — stalwarts of the Tea Party — have filed suit in Federal District Court in Washington, D.C., to collect a $409 million ICSID award against Venezuela.
Venezuela President Hugo Chavez had expropriated the fertilizer and chemical plant FertiNitro in 2010. Koch had a 25% interest in the venture through its Swiss subsidiary Koch Minerals Sarl. Another Koch Swiss entity Koch Nitrogen International had contracts to buy the resulting ammonia and urea at a discount because of the investment as part of the deal and the investment was protected by a bilateral Swiss-Venezuela Investment Treaty.
The Koch entities filed suit against Venezuela at ICSID in 2011 after not being compensated for the expropriation and the three judge ICSID arbitration panel awarded Koch $409 million, with a partial dissenting opinion from the Australian judge Zachary Douglas. Britain’s V.V. Veeder was the presiding judge. Canada’s Marc Lalonde was the other judge.
In addition to the award, the panel also awarded legal fees of $17 million and ICSID fees of $629,000 to Koch, a sign that Venezuela was clearly at fault.
"The Tribunal unanimously found that Venezuela unlawfully expropriated KOMSA’s interest in FertiNitro, and (by a majority) found that Venezuela unlawfully expropriated KNI’s interest in the offtake agreement," Koch says in the Originating Complaint. "The date of expropriation for both was October 11, 2010."
Koch is a closely-held corporation owned by the Koch brothers, stalwart funders of the right-wing US Tea-Party.
Costing $1.1 billion dollars to build, Fertinitro ranks as one of the world’s largest nitrogen-based fertilizer plants, with daily production capacity of 3,600 metric tons of ammonia and 4,400 metric tons of urea. Until the Chavez government expropriated it in October of 2010, Fertinitro was owned 25% by a Koch subsidiary, 35% by Venezuela state petrochemical company Pequiven, 20% by a Snamprogetti subsidiary of Italian oil company ENI, and 10% by Venezuela’s private food and beverage giant Polar.