Luxembourg-based pipe producer Tenaris announced this week it was awarded a $165 million compensation for breaches, pre-award interest and legal fees in a dispute with the government of Venezuela.
According to Tenaris, the International Center for the Settlement of Investment Disputes (ICSID) ruled the pipe producer should be compensated by the Venezuelan government over the nationalization of Tubos de Acero de Venezuela (Tavsa), the sole producer of seamless steel tube products in the country, and Complejo Siderúrgico de Guayana (Comsigua), a producer of hot briquetted iron (HBI). Both companies, which used to be owned by Tenaris, are now state-run by Venezuela.
According to ICSID, Venezuela “expropriated their investments in Tavsa and Comsigua in violation of the bilateral investment treaties entered into by Venezuela with the Belgium-Luxembourg Economic Union and Portugal.”
As a result, the award granted Tenaris a $137 million compensation for the breaches, plus another $24.6 million in pre-award interest and a $3.3 million reimbursement for legal fees and ICSID administrative costs, totaling $164.9 million.
A similar decision in February this year, which involved a different Tenaris company, ruled the pipe producer should receive a $172.8 million compensation for the expropriation by Venezuela in the company’s subsidiary HBI producer Matesi.