Enforcing pacta sunt servanda? : Conoco-Phillips and Exxon-Mobil versus the Bolivarian Republic of Venezuela and Petróleos de Venezuela

Abstract

In 2007, the government of Venezuela decided to re-structure certain oil projects, known as Associations, so as to bring them in line with the 2001 Hydrocarbons Law. In response, ExxonMobil and ConocoPhillips decided to exit Venezuela. Supposedly motivated by a commitment to uphold the principle of sanctity of contract, the companies subsequently initiated a series of arbitrations involving some of the largest claims ever put before international tribunals. However, the bargains that the companies insist they are defending are not reflected in the agreements that they had actually signed. Thus, these arbitrations amount to an attempt on the part of these companies to use international arbitral tribunals to re-draft on their behalf the contracts they had negotiated, so as to secure a windfall (which they had never bargained for) upon their exit from Venezuela.