Curazao Refinery di Korsou and Venezuela Oil Refinery are immersed in a new arbitration in which the Curazolean state company claims against the Venezuelan state company for failing to maintain the Isla oil refinery and for environmental damages resulting from its departure four years ago.- Translation provided by JIGGSLAW®.
The confidential arbitration filed by Curazao Refinery di Kòrsou (RdK) against Venezuela’s state-owned oil refinery (PDVSA in Spanish) is taking place in Switzerland and is worth around $1 billion. RdK claims the maintenance of the Isla Refinery in Curazao in addition to the environmental damages caused by PDVSA’s exit in 2019.
After months of unsuccessful negotiations between the parties, the state-owned RdK files an arbitration claim with the Swiss Arbitration Center. PDVSA also seeks compensation from the Curacao Refinery.
Environmental damage claims
Curacao’s inhabitants fought for many years for PDVSA to hand over the oil refinery after its contract term ended in 2019. The movement even made its way into politics, with a group formed specifically to seek the departure of the Venezuelan company.
A Curacao tribunal ruled in 2009 that PDVSA should be modernised in order to meet environmental standards. The Venezuelan company was accused of soil contamination, uncontrolled landfills, and poor waste management. (See “ENFOQUE-Refinería Isla, un huésped que incomoda en Curazao“, Marianna Párraga, Reuters, 16.03.2011).
The refinery’s contamination has been denounced for years due to the proximity of thousands of people’s living areas threatened by the emission of sulphur dioxide and other toxic materials.
The other arbitration between Rdk and PDVSA
In March 2020, RdK filed an arbitration request against PDSVA with the International Center for Dispute Resolution (ICDR) in the United States regarding the management of the Venezuelan refinery.
Curazao seized one of the PDSVA’s oil storage terminals on Bonaire in March in order to force overdue payment requests, maintenance costs, and environmental damages.
