300 F. Supp. 3d 137
D.C. Cir.2018Background
- Rusoro Mining Ltd., a Canadian gold-mining company, owned Venezuelan mining assets that were nationalized by Venezuela in 2011–2012 after regulatory measures restricting gold exports and FX. Rusoro claimed expropriation without compensation.
- Rusoro initiated ICSID Additional Facility arbitration under the Canada–Venezuela BIT and obtained a unanimous award (Aug. 22, 2016) finding treaty breach and awarding ~$966.5 million for expropriation plus costs.
- Rusoro filed in D.D.C. to confirm the arbitral award under the New York Convention; Venezuela moved to dismiss/deny confirmation arguing the tribunal exceeded its authority and alternatively sought a stay pending a Paris appeal.
- The arbitral tribunal used three valuation methods (weighted: Adjusted Investment 50%, Book 25%, Maximum Market 25%) to calculate “genuine value” as fair market value as of the expropriation date; Venezuela attacked use of pre-expropriation market figures and valuation methodology.
- The court evaluated (1) the deference owed to the tribunal on arbitrability (delegation clause in Treaty + ICSID Additional Facility Rule 45) and (2) whether any New York Convention Article V ground justified refusing confirmation, and then considered Europcar stay factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the tribunal had authority to decide its own jurisdiction (arbitrability) | Rusoro: Treaty and ICSID Additional Facility Rules clearly delegate arbitrability to the tribunal | Venezuela: Court should review jurisdiction de novo and not defer based on foreign positions | Court: Parties clearly and unmistakably delegated arbitrability; substantial deference owed to tribunal; no second-guessing |
| Whether the tribunal exceeded its scope by relying on valuations predating expropriation / improper damages methods | Rusoro: Tribunal used pre-2011 valuations only as inputs; selected reasonable mix of methods to reach fair market value as of expropriation | Venezuela: Use of 2008 market cap and adjusted investment inflated valuation beyond Tribunal's authority | Court: Valuation differences are mere disagreements over damages; tribunal did not exceed authority and award stands |
| Whether confirmation must be refused under New York Convention Article V | Rusoro: No Article V ground shown; narrow review favors confirmation | Venezuela: Award deals with differences outside submission to arbitration (Article V(1)(c)) due to valuation timing/methods | Court: Venezuela bears heavy burden and failed to establish any Article V ground; confirms award |
| Whether enforcement should be stayed pending French appeal | Rusoro: Opposes stay; long delay and policy favor immediate enforcement; hardship to claimant | Venezuela: Requests stay given pending Paris appeal that could set aside award | Court: Applied Europcar factors; weighed delay, status of foreign proceedings, hardship; denied stay and ordered confirmation |
Key Cases Cited
- BG Group PLC v. Republic of Argentina, 134 S. Ct. 1198 (U.S. 2014) (presumption of de novo review of jurisdictional issues unless clearly delegated)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (parties must clearly and unmistakably delegate arbitrability to arbitrator to trigger deference)
- Europcar Italia S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310 (2d Cir. 1998) (factors for whether to stay enforcement pending foreign set-aside proceedings)
- Kanuth v. Prescott, Ball & Turben, Inc., 949 F.2d 1175 (D.C. Cir. 1991) (review of arbitral damages awards is extremely limited)
- TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928 (D.C. Cir. 2007) (New York Convention limits grounds for refusing enforcement)
- Gold Reserve, Inc. v. Bolivarian Republic of Venezuela, 146 F. Supp. 3d 112 (D.D.C. 2015) (district court confirmation principles and deference to tribunal under similar BIT disputes)