For nearly two decades, the Bolivarian Republic of Venezuela mandated that all disputes arising from hydrocarbon contracts with Venezuelan state and state-owned/affiliated entities must be resolved exclusively in Venezuelan courts. This legal regime effectively foreclosed international commercial arbitration at the purely contract level and forced investors in Venezuela to rely on bilateral investment treaties or multilateral investment instruments to pursue investment treaty arbitration—a much more limited remedy for aggrieved counterparties with Venezuelan State-Owned Entities in the hydrocarbon industry.

That legal landscape has now fundamentally changed on both the Venezuelan and U.S. sides of the contractual legal equation.

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