World Bank International Center for the Settlement of Investment Disputes (ICSID) has ruled that Venezuela must pay $740.3m to Gold Reserve for cancelling the Las Brisas gold project.

The three-member tribunal has asked Venezuela to pay the amount under the provisions of the Canada-Venezuela Bilateral Investment Treaty (BIT), which should be made immediately with any unpaid amounts accruing interest at Libor plus 2% per year.

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Following the evaluation, the ICSID ruled that $713m must be paid based on the project’s market value, as well as an additional $22.3m interest and $5m for the company’s legal and technical expenses.

"We feel vindicated by the tribunal’s clear conclusion that the Venezuelan Government acted unlawfully in terminating the Brisas project in direct violation of the BIT."

In 2009, Venezuela terminated the concession in one of Latin America’s gold deposits in an effort to enhance the state control of key economic sectors, following which Gold Reserve approached World Bank’s ICSID seeking $2.1bn in damages, Reuters reported.

Around $300m was spent on the project by Gold Reserve before the government revoked its permission for mine development.

Gold Reserve president Doug Belanger said: "We feel vindicated by the tribunal’s clear conclusion that the Venezuelan Government acted unlawfully in terminating the Brisas project in direct violation of the BIT.

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"We are gratified to know that all of our hard work prior to the unlawful termination of the project and subsequently in the execution of our claim against the Venezuelan Government has been rewarded.

"We are hopeful that Venezuela will satisfy its obligations to the company without delay and without any further legal proceeding.

"Should they fail to do so, we are prepared to pursue all available means to ensure that the amount awarded to the company is recovered in full."

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