Gold Reserve Inc. v. Bolivarian Republic of Venezuela
146 F. Supp. 3d 112
| D.D.C. | 2015Background
- Gold Reserve petitions to confirm an ICSID Paris Award against Venezuela under the New York Convention and FAA.
- BIT between Canada and Venezuela governed the arbitration; Gold Reserve Inc. (Canadian) owned Venezuelan assets via subsidiaries.
- Tribunal awarded about $713 million in damages plus fees for alleged FET violations; proceedings spanned 2012–2014 in DC and Paris.
- Venezuela challenged, arguing lack of investment eligibility, improper award to the US parent rather than the Brisas entity, and due-process/public-policy defects.
- Court applies deferential standard, concludes the Award may be confirmed and enforced in the United States; stay denied.
- Waiver issue: Venezuela waived challenge to the proper award recipient by not raising it clearly during arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitral scope/deference governs arbitrability. | Gold Reserve argues Tribunal properly ruled on competence. | Venezuela contends award exceeded submission scope. | Tribunal’s scope must be given deference; no exceedance established. |
| Whether Gold Reserve Inc. qualifies as BIT investor. | Gold Reserve Inc. satisfied BIT investor definition and jurisdiction. | Gold Reserve Inc. not bona fide; lacks BIT investor status. | Tribunal properly held Gold Reserve Inc. is an investor; jurisdiction affirmed. |
| Who is the affected enterprise for award entitlement. | BIT permits award to investor for its own losses; waiver occurred. | Award should be to Brisas Company, the indirectly owned enterprise. | Court finds waiver; damages awarded to Gold Reserve Inc. proper. |
| Whether due-process was violated in the damages proceedings. | Tribunal conducted fair hearing; no denial of due process. | Disparate time, damages methodology, and post-award corrections violated due process. | No due-process violation; tribunal’s procedures and weight given to evidence upheld. |
| Whether public-policy or stay concerns defeat enforcement. | Public policy and stay concerns do not warrant non-enforcement; speedy relief needed. | Award could contravene public policy by punitive damages or improper recipient. | Enforcement affirmed; no public-policy violation; stay denied. |
Key Cases Cited
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (deference to arbitrator on arbitrability where parties clearly delegated)
- Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L’Industrie Du Papier, 508 F.2d 969 (2d Cir. 1974) (court should not second-guess arbitrator’s interpretation of agreement)
- Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614 (1985) (emphatic federal policy favoring arbitration)
- Belize Social Development Ltd. v. Government of Belize, 668 F.3d 724 (D.C. Cir. 2012) (limits on grounds to deny enforcement under NY Convention)
- DynCorp Aerospace Tech. v. DynCorp International, 763 F. Supp. 2d 12 (D.D.C. 2011) (NY Convention confirmations are generally summary, with narrow grounds for denial)
- Zeiler v. Deitsch, 500 F.3d 157 (2d Cir. 2007) (brief discussion of limited grounds for non-enforcement under NY Convention)
- Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F.2d 334 (5th Cir. 1976) (limits on due-process/public-policy defenses in NY Convention context)
- Ottley v. Schwartzberg, 819 F.2d 373 (2d Cir. 1987) (waiver and argument development relevance in arbitration challenges)
- Rive v. Briggs of Cancun, Inc., 82 F. App’x 359 (5th Cir. 2003) (ability to present case; heightened standard for denial of enforcement)
- Paterson-Leitch Co., Inc. v. Massachusetts Mun. Wholesale Elec. Co., 840 F.2d 985 (1st Cir. 1988) (requirement to present arguments clearly; waiver considerations)