http://www.americasdebate.com/forums/index...mp;#entry237847

In the above subject, it was targeting a possible embargo against the US by Venezuela. I was very curious about this issue- as the US seems to have a carte' blanche exemption from being sued for wrongdoing we have commited on other nations soil.

This question puzzled me, as Exxon, whose board of directors should be in jail instead of allowed to walk among humans - is attempting to seize Venezuelan assets in other countries. I was suprised that they were even allowed to bring suit against a nation, much less get around the usual diplomatic immunity and immunity from civil lawsuits that most countries have against this type of thing.

Should a corporation be able to bring suit against a soveriegn nation for actions taken on the soveriegn nation's home soil?

For instance- should guatamala be able to sue Chiquita banana and the US in all non-US countries and sieze all our assets for our interference in that countries affairs, causing the deaths of hundreds of thousands of native guatamalen's?

Should every company in the world that has some problems with one goverment or another be allowed to sue a soveriegn country for actions taken inside that country- that involve property laws in that country?

It all depends on the laws of the country you are talking about.

In America, you can sue the government IF the government has said you can do so. Your redress against government wrongdoing is often spelled out very specifically in the applicable laws. Foreign nationals and organizations can use this country's courts if they have a connection - for instance, doing business in the jurisdiction. And once they have that connection, they can be sued as well.

Governments allow themselves to be sued in their own courts to attract business (among other things) - if you have no redress against the government when they seize your assets to, say, nationalize their oil industry, you are going to make adjustments to your business plans, or simply avoid doing business in that country. Sometimes, you will find it easier to go after their assets in a third country with a more reasonable legal system. But you will have to do it within the boundaries of that country's laws.

So to answer your question, Guatemala can sue Chiquita banana in any country where they have wronged Guatemala and there is a basis for a real lawsuit. They can't just take us on in French courts because we both have a connection to France - you would have to use French law, and France would have to be the proper jurisdiction in which to bring a case. If Chiquita execs bribed a Guatemalan official in Paris, you have that connection, and could probably proceed, depending on French law. You would then be able to reach Chiquita's assets in France, and possibly assets in other countries that have such agreements with France.


Disclaimer: I did not feel like cracking a law book and spending hours to answer this question, so it may not be perfectly accurate.

I am following you- then what jurisdiction and reason does Exxon have in seeking redress in foriegn courts for activities in Venezuela?

Sorry, CR, I should have looked up this case. This was actually an arbitration decision through ICSID, the International Centre for Settlement of Investment Disputes, not a bunch of normal lawsuits.

ICSID has 155 countries signed on, including (for the moment) Venezuela. Sign on, and you are bound by the results of arbitration by this body, and if the terms of the convention say so (and I'll bet that they do), that decision is valid and enforceable in all of the signatory countries. So with their arbitration case won and a judgment in hand, I think all Exxon has to do is find some signatory countries that are holding a lot of Venezuelan assets, start a simple lawsuit to have their arbitration decision recognized in that country, then have those assets frozen. They did it in London (financial center), Amsterdam (financial center), and the Dutch Antilles (big offshore banking business there), just to reach Venezuelan assets held in those jurisdictions. That's the jurisdiction part of your question.

It is still a big deal for banks to cooperate with these orders - it's not good for the banking business if they hand over those assets too easily. That's why people with something to hide like to bank with those little countries and islands that specialize in offshore banking so much - their banking business is such a big part of their economy that they protect it more than a normal country would. Secrecy and discretion is their biggest selling point. So I'm a little surprised to see that the Dutch Antilles was a part of this. Logic says that they should put up a fight to avoid having to freeze Venezuela's assets.

The reason Exxon is in those venues is probably because they aren't going to make much headway in Venezuela itself. Those courts and those banks are the least likely to cooperate.

Never. The purpose of a corporation is to make money. In a perfect world, a nation exists to secure freedom and provide order. The two have no common-ground in a court of law. Corporations may be beneficial for some nations, that is not in dispute. Perhaps a bit ideally, it can be said that corporations seek to take advantage of resources, people, etc. in a country whereas the country can only defend those people. Courts of law cannot be battlegrounds for corporations trying to take advantage of a nation's defense of its people.

Of course they do. Even using your definitions, that nation's freedom and order should have value, which then equates to money. Also, what about the corporations freedom to exist? By taking that away, the nation loses its own purpose for existence, again using your definition. Also, the corporations provide the economic well being of the nation, helping to promote freedom. There's lots of common ground in a court of law.

It also seems you have a predisposition here to assume the nation is benign--that is generally not the case in these situations. What is usually the case is that the nation seeks to use its power to usurp the profitable corporation---and for one reason and one reason only: money. The nation is therefore no different than the corporation.

Okay then Hobbes- on that line of thinking, shouldn't every country we have wronged be able to sieze our assets in countries other than America?

I believe what we are really seeing here is "might makes right"- Exxon is a run away rogue nation unto itself, and should never be allowed to interfere with internal decisions in another country- it would be one thing if Venezuela blew up a refinery in, oh, nigeria- but we are talking internal nationalizing of property- not that much different than eminent domain or various war time powers acts.

Should companies in Iraq harmed by our bombing campaign be able to sieze American assets worldwide?

Nicaruagua has already won thier judgement in world court- but it simply doesn't have the strength to take on the US I believe, though they are certainly owed a lot more than money for our terrorist campaigns there-

Dont you think this is setting a dangerous precedent for the US in the future?

If we nationalized that industry here, seizing their assets and developments with no compensation, sure! The problem is, we don't do that.



No, NOT doing it would be setting a dangerous precedent. Again, I think people have the chicken-egg argument backwards here. It was Chavez who initiated this by seizing Exxon assets. All Exxon is trying to do is defend its property.


Hindustan Times

So, the real question here is why shouldn't a corporation who has made substantial investments in an area be compensated when those assets are seized? US Foreign policy is not even relevant to this discussion...this is a domestic policy issue.

I think it is not the "why" of the decision, but that there is a decision at all that can force a soveriegn nation to pay something in another country for a corporation- Lets say some country or company in a country obtains a decision for a 200 billion dollar civil law suit- they can just go to other countries and sieze the US foriegn assets?

There are enough bad things in this world to get a decision against the US that follows the same laws of siezure that are being used against Venezuela.

So you do realize that some judgement (forget about nationalization for a minute) that is against the US in the right jurisdiction could be used against us in the same manner?

Should a corporation be able to bring suit against a soveriegn nation for actions taken on the soveriegn nation's home soil?

Absolutely yes.

What is a government? In some countries it is a representation of the people of its country. But in many countries, it is simply an individual who sits atop the government. Why shouldn't such a person be subject to the law?

Because that is what we're talking about: whether or not a government should be subject to the law.

How can someone claim they are in any way libertarian and say that a government should be above the law?

In this case, Venezuela nationalized Exxon's facilities in that country. It seized private property and, by its own laws must pay fair compensation. Exxon and Venezuela could not agree on what "fair" compensation was and so it sued to get renumeration. The same thing could happen here and in fact has.

In Kelo v New London, the plaintiffs sued that the eminent domain use was illegal. When that failed, they sued again arguing that the compensation received was not fair. The fact that the city of New London wanted to charge the (previous) owners five years worth of rent for the time between they took the property and the time the owners moved out only poured salt onto the wounds.

Ironically, the New London project hasn't really proceeded and the whole thing was a horrible misuse of government power which resulted in no gain for the government.

The same thing is happening here between Exxon and Venezuela. Let the courts decide the issue.

Then what recourse do you suggest for a corporation that has its foreign assets seized by that country's government?



Then why aren't they? Certainly, one would want to get hundreds of millions or billions of dollars that were owed to it, so there would be no shortage of incentive.



Yes. These decisions were not rendered by the US...they were rendered in international courts around the world. As such, there's been nothing preventing just exactly that from happening all along. That would indicate that we probably haven't been conducting similar actions. About the only similar thing I could even imagine happening would be if we seized all the foreign automobile plants operating here, which I don't see happening. We simply don't do these types of things.

As a precedent, yes corporations should be able to sue governments for breach of contract in the same manner in which individuals can sue government for rights violations. If a sovereign government enters into a contract with a private entity (which happens often), then both sides of the obligation should be met. If the private entity fails in its obligations, should not the government have legal recourse? The same applies to the government.

The real problem is an enforcement body. Such a thing depends on an independent judiciary. Since there is no legitimate supranational authority above the nation-state, the grievances of private individuals or groups can go on deaf ears.