Crystallex International Corp v. Bolivarian Republic of Venezuela, No. 18-2797 (3d Cir. 2019)Annotate this Case
Crystallex, a Canadian gold mining company, invested hundreds of millions of dollars to develop gold deposits in Venezuela, which then expropriated those deposits and transferred them to its state-owned oil company, PDVSA. To seek redress, Crystallex invoked a bilateral investment treaty between Canada and Venezuela to file for arbitration before the International Centre for Settlement of Investment Disputes. The arbitration occurred in Washington, D.C., and the panel awarded Crystallex $1.2 billion, plus interest. The district court confirmed that award and issued a $1.4 billion federal judgment. Unable to identify Venezuelan-held commercial assets in the U.S. that it could lawfully seize, Crystallex sought to attach PDVSA’s shares in PDVH, its wholly-owned U.S. subsidiary. PDVH is the holding company for CITGO, a Delaware Corporation. The attachment suit is governed by the Foreign Sovereign Immunities Act, 28 U.S.C. 1602–1611. Under federal common law, a judgment creditor of a foreign sovereign may look to the sovereign’s instrumentality for satisfaction when it is “so extensively controlled by its owner that a relationship of principal and agent is created.” The district court concluded and the Third Circuit affirmed that Venezuela’s control over PDVSA was sufficient to allow Crystallex to attach PDVSA’s shares of PDVH. The court rejected jurisdictional and equitable objections and a claim that PDVSA’s “tangential role” in the dispute precludes execution.