(Reuters, 18.May.2020) — The U.S. Supreme Court on Monday declined to hear Venezuela’s appeal of a lower court ruling allowing Canadian gold mining company Crystallex to seize shares in U.S. refiner Citgo to collect on an unpaid arbitration award.
That meant a 3rd U.S. Circuit Court of Appeals ruling from last year that Crystallex could seize the shares in Citgo would stand. Crystallex is going after Citgo, a subsidiary of Venezuelan state oil company Petroleos de Venezuela, to collect on a $1.4 billion judgment for expropriation of its assets under late socialist leader Hugo Chavez.
The decision marked a setback to Venezuelan opposition leader Juan Guaido, who is recognized as the country’s interim president by the United States and dozens of other countries and has focused on protecting PDVSA’s overseas assets from seizure by creditors or possible sale by President Nicolas Maduro.
But Crystallex still faces obstacles in its quest to seize Citgo shares.
The U.S. Treasury Department, which sanctioned PDVSA last year as part of the Trump administration’s efforts to oust Maduro, has said claimants against Venezuela cannot enforce arbitral awards by seizing property without specific permission.
“It is important to clarify that thanks to the actions of the legitimate government, the U.S. Treasury Department has implemented an order protecting the Republic’s assets, especially Citgo,” Guaido’s press team said in a statement.
A Crystallex spokesman did not immediately respond to a request for comment.
Guaido’s representatives took control of Citgo last year and have so far managed to stave off a number of parties seeking shares in the company as payment, including U.S. oil company ConocoPhillips and holders of PDVSA 2020 bond, which is backed by a 50% stake in Citgo.
Maduro, who has overseen an economic collapse of the once-prosperous OPEC nation and stands accused of rigging his 2018 re-election, in 2017 pledged the other 50% to Russia’s Rosneft as collateral for a loan. He retains control of Venezuela’s territory, and calls Guaido a U.S. puppet who “stole” Citgo.
— Reporting by Luc Cohen in New York Additional reporting by Lawrence Hurley in Washington Editing by Marguerita Choy