Constitutional Chamber of the Supreme Court

Decision dated October 28, 2005

Revision Request to the decision of the Political Administrative Chamber of the Supreme Court
imposing trial costs to MINCA in relation to the Arbitration request Not admitted
by the Political Administrative Chamber

Motivation to Decide

"… In the first place, the Chamber must determine its competence to hear the case of record, for which purpose it is noted that the review of a decision issued by the Political-Administrative Chamber of this Supreme Court was requested. Thus, according to the provisions of Article 336.10 of the Constitution of the Bolivarian Republic of Venezuela, and Article 5.4 in accordance with the first paragraph thereof, the organic text that governs the functions of this Maximum Court, this Chamber is competent to resolve upon the request for review that is the subject matter hereof. And so it is declared.

Having determined its competence, this Chamber proceeds to decide regarding the consequences of the petition for arbitration made by the parent company of Minera Las Cristinas, C.A. named VANESSA VENTURES, LTD., before the International Center for the Settlement of Controversies related to Investments, regarding the review that is the subject matter of this record, and in this regard, it should be stated that two points of view have been brought forth in this regard.

On the one hand, the company alleges that this arbitration would deal with the alleged infractions committed by the Republic regarding the contracts for the exploration, development and exploitation of alluvial and vein gold in an area named Las Cristinas 4, 5, 6 and 7, located in Sifontes Municipality of the State of Bolivar, and that, in this case, the review relates to a matter that is alien to said controversy, as would be the admissibility of the sentence to pay court cost by the Political-Administrative Chamber of this Maximum Court against the challenging party, when dismissing the formalization of arbitration filed by it against Corporación Venezolana de Guayana.

On the other hand, it is inferred from the allegations posed by the substitutes of the Solicitor General of the Republic who have acted in this proceeding, as well as the attorney-in-fact of Corporación Venezolana de Guayana, that the implementation of said arbitration mechanism implies the waiver by MINERA LAS CRISTINAS, C.A. to even this review, because it is related to the core of the controversy at issue.

In this regard, the Chamber must note that Article XII (3)(c) of the Agreement between the Government of the Republic of Venezuela and the Government of Canada for the Promotion and Protection of Investments, signed in Caracas on July 1, 1996, and incorporated to our legal system through the corresponding approbatory law (Special O.G. No. 52207 of 01.21.98) "an investor may submit a controversy [...] to arbitration according to paragraph (4) if: [...] (b) the investor has waived its right to bring or continue any proceeding regarding the measure that it purports to be a default on this agreement before the courts by the contracting party or in any type of proceeding for the settlement of disputes".

Having seen the contents of that rule, this Chamber deems that it cannot be sustained that the revision requested is in no way related to the controversy arisen with regard to the exploration, development and exploitation of alluvial and vein gold in the area named Las Cristinas, between the parent company of the plaintiff and the Republic and Corporación Venezolana de Guayana, because the sentencing to pay court costs that is now being impugned had its origin, precisely, on a request for formalization of arbitration regarding the same dispute, but made to our national jurisdiction by way of the Political-Administrative Chamber of this Supreme Court.

From this perspective, the Chamber cannot make a thorough examination regarding this review, not assessing the fairness of the monetary sentence against the petitioner, because by having requested the International Center for the Settlement of Controversies regarding Investments to settle the conflict arisen, it undoubtedly waived filing or continuing any proceeding related –either indirectly or directly- to the so-often referred to controversy. For this reason, this Chamber must declare that it dismisses the review requested. So it is decided".