In a noteworthy decision, the Third Circuit Court of Appeals has reiterated its prior judgment allowing creditors of Venezuela who have obtained arbitration awards to lay claim on the U.S. assets of Petroleos De Venezuela, S.A. (PDVSA), Venezuela’s national oil company. This conclusion, accessible in detail via the following link,
Third Circuit Affirms Judgment Allowing Creditors to Attach U.S. Assets of Venezuela’s National Oil Company, brings relief to those creditors who have long been seeking a viable means to recover their dues.
This decision did not come about without its share of resistance. One of the primary points of contention was Venezuela’s assertion of sovereign immunity, asserting that it was exempt from the jurisdiction of foreign courts in this context. Furthermore, they argued the change in Venezuela’s government should negate the previous court’s holding wherein PDVSA was viewed as an alter ego of the Venezuelan government.
Nonetheless, the Third Circuit Court refuted both these claims. Their rationale was twofold: firstly, they affirmed that PDVSA could be considered as Venezuela’s alter ego, alluding to the substantial control the Venezuelan government maintained over the oil company. In effect, this significantly diminished the credibility of asserting sovereign immunity.
Secondly, the change in government, as per the court’s decision, did not warrant a different verdict than one previously concluded. This is certainly a judgement that sets a precedent and may lead to an array of similar future court decisions.
The full implications of this decision, however, are yet to be unearthed. Legal professionals, especially those dealing with international arbitration and foreign assets, should certainly be cognizant of the development and its wide-ranging consequences.