In Cemex v Venezuela, the claimants sought orders for provisional measures under the ICSID Convention. They sought to restrain Venezuela from its efforts to seize vessels which had been the subject of a transfer from their Venezuelan subsidiary, Cemex Venezuela, to a third party. Cemex argued that the seizures would increase their losses claimed in the arbitration and aggravate the dispute, given that Cemex Venezuela would then be liable to the third party for the value of the transfer. In the underlying proceedings, the claimants allege that between May and August 2008, in breach of the Netherlands-Venezuela BIT and of customary international law, they were deprived of their rights of ownership over Cemex Venezuela.

Article 47 of the ICSID Convention provides ICSID tribunals with authority to order provisional measures "which should be taken to preserve the respective rights of either party". In reaching its decision whether to exercise this authority, the tribunal examined past decisions of ICSID tribunals and the ICJ with respect to provisional measures (the latter being relevant given that Article 47 of the ICSID Convention was directly inspired by a corresponding provision in the ICJ Statute).

The tribunal identified that the ICJ had consistently found that provisional measures should only be granted where there was an urgent necessity to prevent irreparable prejudice to the rights which were the subject of the dispute. However, while ICSID tribunals had traditionally followed this standard of "irreparable harm", more recent decisions had applied divergent formulations of the test. Nevertheless, the tribunal was not of the view that the various formulations differed in substance. It considered that the relevant ICSID cases could be divided broadly into two categories:

  1. cases where the alleged prejudice could be readily compensated by awarding damages; and
  2. cases where the alleged prejudice entailed a serious risk of destruction of a going concern that constituted an investment (i.e. the prejudice, although capable of financial compensation, was such that compensation could not fully remedy the damage suffered).

The tribunal therefore saw no reason to deviate from the traditional formulation of the applicable test. On the facts, the tribunal held that the consequence to the claimants of the seizure of the vessels would be a financial loss, which loss could be readily compensated by an award for damages. The alleged prejudice did not therefore meet the requirements of urgency and necessity. Moreover, the application having failed on those grounds, it could not be sustained on the basis of aggravation of the dispute alone.

(Cemex Caracas Investments BV v Bolivarian Republic of Venezuela (ICSID Case No ARB/08/15))