REG-Smurfit Westrock plc Smurfit Westrock Announces ICSID Award in Dispute with Venezuela

Smurfit WestRockAnnouncement

29/08/2024 17:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240829:nBwbW6P58a&default-theme=true


Smurfit Westrock Announces ICSID Award in Dispute with Venezuela

 

Smurfit Westrock plc (NYSE: SW, LSE: SWR)(“Smurfit Westrock”) announces
that the arbitral tribunal (the “Tribunal”) constituted under the auspices
of the World Bank’s International Centre for Settlement of Investment
Disputes (“ICSID”) issued an award on August 28, 2024 granting Smurfit
Holdings BV (“Smurfit”), a wholly owned subsidiary of Smurfit Westrock,
compensation in excess of US$468.7 million, plus legal costs of US$4.5
million, plus interest from May 31, 2024 until the date of payment (the
‘Award’).

The Award was issued in relation to Smurfit’s arbitration claims against the
Bolivarian Republic of Venezuela (“Venezuela”) pursuant to the Agreement
on encouragement and reciprocal protection of investments between the Kingdom
of the Netherlands and the Republic of Venezuela (the “Treaty”), initially
filed in December 2018. As previously reported, following the August 2018
government occupation, Smurfit Kappa Group’s Venezuelan operations were
deconsolidated.

By majority, the Tribunal dismissed Venezuela’s objections to its
jurisdiction, and held that Venezuela breached the Treaty’s protection
against unlawful expropriation (Article 6), the Treaty’s protection against
unfair and inequitable treatment and arbitrary and discriminatory measures
(Article 3), and the Treaty obligation to guarantee the repatriation of
dividends without undue restriction or delay (Article 5). These breaches arose
from Venezuela’s seizure of Smurfit’s Venezuelan subsidiaries’
landholdings, Venezuela’s failure to issue VAT refunds to Smurfit’s
subsidiaries, Venezuela’s failure to permit the transfer of Smurfit’s
subsidiaries’ dividends without undue restriction and delay, and finally,
Venezuela’s seizure of Smurfit’s Venezuelan business in 2018. The Tribunal
majority concluded that Venezuela’s occupation of Smurfit’s Venezuelan
subsidiaries in 2018 “constitute s  an expropriation that was not taken in
the public interest and was not compliant with due process of law”.

Smurfit Westrock will now pursue the full value of the Award from Venezuela.

Tony Smurfit, Smurfit Westrock CEO, commented: “We are pleased with the
award of the ICSID tribunal. It validates our assertion that our Venezuelan
business was unlawfully expropriated in 2018. While the award cannot
compensate us for the full loss in relation to our operations in Venezuela,
including the significant impact it had on our people and the wider community
there, we will now pursue the full value of this award from the Venezuelan
government”.

Forward-Looking Statements

This press release contains forward-looking information that involves risks
and uncertainties, including relating to the pursuit of the Award from
Venezuela by Smurfit Westrock. Statements that are not historical facts,
including statements about the beliefs and expectations of the management of
Smurfit Westrock, are forward-looking statements. Words such as “may”,
“will”, “could”, “should”, “would”, “anticipate”,
“intend”, “estimate”, “project”, “plan”, “believe”,
“expect”, “target”, “prospects”, “potential”, “commit”,
“forecasts”, “aims”, “considered”, “likely”, “estimate”
and variations of these words and similar future or conditional expressions
are intended to identify forward-looking statements but are not the exclusive
means of identifying such statements. Actual future results, including whether
the Award will be recovered in part or in full, could vary from those
expressed or implied by the forward-looking information in this press release.
This forward-looking information is given as of the date of this press
release. Neither Smurfit Westrock nor any of its associates or directors,
officers or advisers provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any such forward-looking
statements will actually occur. You are cautioned not to place undue reliance
on these forward-looking statements. Other than in accordance with its legal
or regulatory obligations (including under the UK Listing Rules, the
Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation and
other applicable regulations), Smurfit Westrock is under no obligation, and
Smurfit Westrock expressly disclaims any intention or obligation, to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

About Smurfit Westrock

Smurfit Westrock is a leading provider of paper-based packaging solutions in
the world, with approximately 100,000 employees across 40 countries.



View source version on businesswire.com:
https://www.businesswire.com/news/home/20240829776994/en/
(https://www.businesswire.com/news/home/20240829776994/en/)

Ciarán Potts 

Smurfit Westrock

T: +353 1 202 71 27

E: ir@smurfitwestrock.com (mailto:ir@smurfitwestrock.com)

FTI Consulting 

T: +353 1 765 0800

E: smurfitwestrock@fticonsulting.com
(mailto:smurfitwestrock@fticonsulting.com)


Copyright Business Wire 2024