Decision ID: 000979

In February 1999 the 1971 Fund Executive Committee considered a request by Petroleos de Venezuela SA (PDVSA) that the 1971 Fund should pay the balance of the assessed amount of its claim for clean-up costs against a bank guarantee, even though payments were at the time were being pro-rated at 25% of the assessed amounts. The Committee recalled that in the Haven and Aegean Sea cases the Fund had made payments of the balance of certain claims against bank guarantees including, in the Aegean Sea case, to a major oil company. The Committee decided not to accept PDVSA’s request on the grounds that such payments could be seen as giving preferential treatment to claimants who had the financial resources to provide bank guarantees, that in any event it would be necessary to know the details of any proposed bank guarantee to ensure that only first class banks acted as guarantors, and that the Fund could face potential practical difficulties if a large number of claimants offered such guarantees in cases where payments were pro-rated.

Date: 01.02.1999
Category: Compensation payments
Subject: Payments against bank guarantees