Jamaica-Venezuela Petrojam Shares Dispute Still at Arbitration Phase at ICJ

  • The matter of how much Venezuela should be compensated for its 49% shares in Petrojam, Jamaica’s state-owned oil refinery, is now in arbitration before the International Court of Justice (ICJ).
  • Energy Minister Daryl Vaz provided the update last Friday as he responded to questions from Opposition Member of Parliament for Clarendon South-Western, Lothan Cousins, during the sitting of the Standing Finance Committee that examined the 2025/26 Budget.  Cousins wanted to know if Jamaica was prepared for an adverse ruling by the ICJ, which was asked to settle the matter in 2023 after Jamaica in 2019 moved to forcefully acquire the 49% stake held by Petróleos de Venezuela’s (PDVSA) in Petrojam.
  • In February 2019, Prime Minister, Dr. Andrew Holness tabled a bill in Parliament for the compulsory acquisition of the shares. The bill provides for the: Ownership of the applicable property to be vested in the Accountant General, in trust for the Government; and for compensation, to be paid to persons having an interest in the applicable property, under specified rules.
  • The bill’s “memorandum of objects and reasons” notes that the current ownership structure of Petrojam exposes the country to serious risks, which threatens its energy security and economic stability. “These risks have been exacerbated and made more imminent by sanctions imposed by third-party countries. As a result, a decision has been taken to enact legislation to provide for the compulsory acquisition of the shares held by the Petrojam Corporation of Jamaica,” the bill stated. The Government made the move out of concern that it could violate the United States’ sanctions imposed on the Maduro regime.
  • Cousins highlighted that “The issue with Venezuela is live and it’s something that must be contemplated at all times because there may be an adverse ruling based on how things transpire”. Vaz responded noting that “The issue of the Venezuela shares is in litigation, and the good thing is that the Government of Jamaica put the share value in escrow so the bottom line is that there is no issue.”, notwithstanding he admitted that the funds being held in escrow are based on Jamaica’s valuation of the shares.
  • Reports are that the Venezuelan Government is seeking US$85Mn. The ICJ is one of six ‘principal organs’1 of the United Nations. It is the only international court that adjudicates general disputes between nations. It often takes years before arriving at a ruling.

(Source: CariCris)

[1] A "principal organ" refers to one of the main governing bodies within an organization, particularly in the context of the United Nations, where it signifies the six key organs that are established by the UN Charter.