Case Law Chronicle #5: Is Sovereign Immunity a Defense to the Recognition of ICSID Award Against Venezuela?

April 7, 2016

Case Law Chronicle: In Amicus Brief to the Second Circuit, U.S. Government Weighs In On Whether Sovereign Immunity Is a Defense to the Recognition of ICSID Award Against Venezuela

By Gretta Walters, Chaffetz Lindsey LLP
April 6, 2016

This is the fifth installment in a regular series offered by NYIAC. Follow this series to learn about recent decisions by New York federal and state courts and for easy access to the full text of the decisions.

Introduction
NYIAC’s second Case Law Chronicle addressed the landmark decision of U.S. District Court for the Southern District of New York (Engelmayer J.) in Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 87 F. Supp. 3d 573 S.D.N.Y. 2015), in which ExxonMobil entities (“Mobil”) sought to enforce a USD 1.6 billion award obtained against Venezuela under the ICSID Convention by filing an ex parte petition to recognize the award as a precursor to enforcement against Venezuela’s assets. As described in the Case Law Chronicle, the Southern District of New York upheld a simple, mechanistic procedure for registering an ICSID award against a sovereign state, despite arguments based on sovereign immunity. Venezuela appealed that decision to the U.S. Court of Appeals for the Second Circuit, where proceedings are pending.

The U.S. Government recently filed an amicus curiae brief with the U.S. Court of Appeals for the Second Circuit in Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, Docket No. 15-707, ECF No. 87 (Mar. 30, 2016), arguing that the Foreign Sovereign Immunities Act (“FSIA”) provides the sole basis for subject matter jurisdiction to enforce an ICSID award against a sovereign state and that the U.S. District Court for the Southern District of New York erred in not following the FSIA’s procedures. The U.S. Government also argues that a federal district court may not modify the interest rate adopted by an ICSID panel. The U.S. Government’s brief requests the Second Circuit to overturn the district court’s February 13, 2015 decision to enforce an ICSID award against Venezuela in Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 87 F. Supp. 3d 573 (S.D.N.Y. 2015).

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