UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

 

RUSORO MINING LIMITED, )
)
Petitioner, )
)
v. ) Civil Case No. 16-cv-02020 (RJL)
)
BOLIVARIAN REPUBLIC OF )
vENEZUELA, ) F I L E D
)
Respondent. ) MAR '2 2018
) C|erk, U.S. District & Bankruptcy
Courts for the District of Co|umbia
MEMORANDUM OPINION
March /3+` ,2018[D1<r.##1,16]

For the third time in as many years, Respondent Bolivarian Republic of Venezuela
(“Venezuela”) finds itself before the U.S. District Court for the District of Columbia
opposing the confirmation of an arbitral award flowing from its expropriation of foreign
gold-mining assets.l In this case, Venezuela seeks to persuade the Court that the arbitral
tribunal, constituted pursuant to provisions of the bilateral investment treaty between
Canada and Venezuela, exceeded the scope of its authority in awarding damages to Rusoro
Mining Limited (“Rusoro”) for the expropriation of that entity’s assets. In the alternative,
Venezuela seeks a stay of enforcement of the arbitral award in light of a pending appeal of
the award in Paris. Unfortunately for Venezuela, its third time is not a charm and for the

reasons that follow, this Court will DENY Venezuela’s l\/lotion to Dismiss Petition and to

 

' See Crystallex Int’l Corp. v. Bolivarian Rep. of Venez., 244 F. Supp. 3d 100 (2017); Gold Reserve Inc. v.
Bolivarian Rep. of Venez., 146 F. Supp. 3d 112 (2015).

Deny Confirmation of the Arbitral Award or, in the Alternative, to Stay (“Mot. to Dismiss”)
[Dkt. # 16], and GRANT Rusoro’s Petition to confirm the Award (“Petition”) [Dkt. #1].
BACKGROUND

Rusoro Mining Limited (“Rusoro”) is a Canadian corporation listed on the Toronto
Stock Exchange. See Rusoro Mining Lta’. v. Bolivarz`an Rep. of Venez., ICSID Case No.
ARB(AF)/l2/5, Award 11 ll (Aug. 22, 2016), Friedman Decl., Ex. 2 [Dkt. # l-2]
(“Award”). Its principal business is the exploration and production of gold. Id. 11 l2.
Between 2006 and 2008, Rusoro acquired controlling interests in twenty-four Venezuelan
companies, which held a total of 58 mining concessions and contracts. See id. 111 12, 77-
78. All of Rusoro’s assets were in Venezuela. Id. 1l 652.

On July l, 1996, Canada and Venezuela entered into the Agreement between the
Government of Canada and the Government of the Republic of Venezuela for the
Promotion and Protection of Investments (“BIT” or “Treaty”). See Mot. to Dismiss, Ex. 2
[Dkt. #16-3]. The Treaty governs investments between the contracting parties, providing
protections against expropriation and establishing a mechanism for dispute resolution. See
id.

As relevant here, the Treaty provides for the resolution of disputes between an
investor (i.e., Rusoro) and a host contracting party (z'.e., Venezuela). Article XII.l
provides:

Any dispute between one Contracting Party and an investor of the other

Contracting Party, relating to a claim by the investor that a measure taken or

not taken by the former Contracting Party is in breach of this Agreement, and
that the investor or an enterprise owned or controlled directly or indirectly

by the investor has incurred loss or damage by reason of, or arising out of,
that breach, shall, to the extent possible, be settled amicably between them.

Id. Failing amicable resolution, an investor may submit the dispute to the Additional
Facility Rules of the lnternational Centre for the Settlement of lnvestment Disputes
(“ICSID”), 2 “provided that either the disputing Contracting Party or the Contracting Party
of the investor, but not both, is a party to the ICSID Convention.” Id. art. XII.4(b).3 The
Treaty provides that expropriation must be made “against prompt, adequate and effective
compensation.” Id. art. VII. “Such compensation,” the Treaty goes on to say, “shall be
based on the genuine value of the investment or returns expropriated immediately before
the expropriation or at the time the proposed expropriation became public knowledge,
whichever is the earlier.” Id. This amount “shall be paid without delay . . . .” Ia’.

At the time of Rusoro’s acquisitions, Resolution No. 96-12-02, issued by the Central
Bank of Venezuela, regulated gold exports. See Award M 138-39. The Resolution’s
“overarching principle” was the “liberty of export,” id. 11 138, with only limited conditions
imposed on companies seeking to export gold from the country. Namely, gold producers
were required to (i) register with the Central Bank of Venezuela, (ii) obtain non-
discretionary export authorization from the Central Bank of Venezuela, and (iii) sell at least

15% of their total annual gold production on the private domestic market. See id.

 

5

2 The lCSlD Additional Rules provide that “[t]he Tribunal shall have the power to rule on its competence.’
lCSID Arbitration (Additional Facility) Rules art. 45 Apr. lO, 2006,
http://icsidfiles.worldbank.org/icsid/icsid/staticfiles/facility/partd-chapOS.htm.

3 lt is undisputed that Canada is a party to the ICSID Convention and that Venezuela is not. See lCSID,
List of Contracting States and Other Signatories of the Convention (as of January ll, 2018),
https://icsid.worldbank.org/en/Documents/icsiddocS/List%200f%20Contracting%2OStates%20and%200t
her%ZOSignatories%200f%20the%2OConvention%20-%20Latest.pdf.

4
.J

Resolution No. 96-12-02 remained in place until Venezuela enacted the April 2009
BCV Resolution, which “significantly altered the legal regime for the export of gold.” Ia’.
11 145. As such, Venezuela now mandated (i) that 60% of each gold producer’s quarterly
gold production be sold to the Central Bank of Venezuela; and (ii) that gold producers
export no more than 30% of their gold production Id. 1111 144, 145, 147, 501. Subsequent
measures, undertaken the same year, imposed further restrictions on foreign gold mining
entities, while loosening restrictions on domestic ones. Ia’. 1[1[ 148_152. Under these
measures, the Central Bank paid for the gold in local currency, tied to the Official Exchange
Rate, which was consistently lower than the market rate. Id. 1111 145, 501. The Central
Bank was also charged with approving all proposed exports. Id. 11 147.

The following year, Venezuela went one step further. lt banned the use of the
secondary currency exchange, known as the Swap Market, placing all foreign exchange
transactions under the jurisdiction of the Central Bank. See id. 11 154. Shortly thereafter,
Venezuela announced that Rusoro would be required to sell 50% of its gold production,
and 50% of its foreign currency income, to the Central Bank. Ia’. 1111 156-59.4

These measures finally came to a head with the government’s complete
expropriation of Rusoro’s Venezuelan assets. On August 1 1, 201 1, President Hugo Chavez
declared the “immediate nationalization” of the Venezuelan gold mining sector. Ia’. 11 160.
Within one month, Venezuela adopted Supreme Decree No. 8.413 (“Nationalization

Decree”), in which the State asserted control over the property and mining rights of all

 

4 The 2010 ban of the Swap Market and the additional restrictions imposed on Rusoro in that year are,
collectively, described as the “2010 Measures” in this opinion.

4

gold-producing companies in the country. ld. 1111 160-62. On March 31, 2012, Rusoro
“formally withdrew from [its] mining areas.” Ia’. 11 173. Rusoro’s “[m]ining [r]ights and
other assets” were taken by the Venezuelan Government shortly thereafter. Id. 11 174.

On July 17, 2012, Rusoro submitted a Request for Arbitration to the International
Centre for Settlement of lnvestment Disputes (“ICSID”). Id. 11 l.5 ln its request, Rusoro
alleged multiple breaches of the Treaty by Venezuela, and sought an award of
compensation plus interest, legal fees and costs, as well as any other relief the Tribunal
considered appropriatel See id. 11 1. Rusoro claimed that Venezuela had expropriated its
investment without payment of compensation. Id. 11 179. Rusoro sought compensation in
the amount of approximately $ 2.3 billion. Id. 11 180.6 Venezuela raised jurisdictional and
merits defenses. See id. 1111 181_85, 187.

The Tribunal was constituted on January 4, 2013. Id. 1111 8, 16. The parties,
represented by counsel (many of whom appear on the briefs before this Court), id. 11 19,
participated in multiple hearings before the Tribunal, id. 1111 62, 66, producing witnesses,
experts, and documents, id. The Tribunal declared the proceeding closed on June 29, 2016.
See id. 11 76. The panel unanimously ruled on August 22, 2016 that Venezuela “breached

Art. VII of the BIT by expropriating Rusoro’s investment in Venezuela without payment

 

5 Rusoro made this request pursuant to (1) the “ICSID Additional Facility Rules of 10 April 2006,” and (2)
the BIT, each of which provided for the lCSID as a forum for the resolution of disputes arising under the
BIT. Award 11 2.

6 The precise number was $ 2,318,898,825.00. Ia'.

of compensation,” and ordered that Venezuela pay Rusoro $ 966.5 million “as
compensation for the expropriation of its investment.” Ia’. 11 904.7

The Tribunal explained its reasoning at length, devoting considerable discussion in
the Award to the calculation of damages. The Tribunal acknowledged that the parties
agreed that (i) the proper valuation date was September 16, 2011, the day when the
Nationalization Decree was issued, and (2) that the term “genuine value,” as used in Article
VII of the Treaty, “equates with the traditional concept of ‘fair market value.”’ Ia’. 11 647.
It noted two distinct features of the damages assessment in this particular case: (i) that
Rusoro, as a publicly-traded corporation, was subject to accounting and disclosure
requirements, id. 11 651, thereby enhancing the reliability of their balance sheet and trading
price, and (ii) that Rusoro’s enterprise was confined to a single~industry, gold exploitation,
in a single country, Venezuela, id. 11 652. The Tribunal went on to discuss the nature of the
international gold market and its correlation to the value of gold-producing companies, id.
1111 654-58; Rusoro’s investment in Venezuela, id. 1111 659-82; the book value of that
investment, id. 1111 683*707; Rusoro’s market capitalization, id. 1111 708-714; and Rusoro’s
valuation of its investments, id. 1111 715-50.

With this background established, the Tribunal acknowledged that the damages
calculation was “a hypothetical exercise” because “in real life, in September 201 1 no buyer

having good information about the gold sector in Venezuela would have been prepared to

 

7 The precise number was $ 966,500,000.00. Id. The Tribunal also ordered Venezuela to pay Rusoro $
1,277,002.00 as compensation for the breach of the Annex of the BlT resulting from the 2010 l\/Ieasures,
and to pay the costs of the arbitration Ia’.

buy a gold producing enterprise in that country for a fair price.” Id. 11 752. lt explained
that “the value of gold companies is affected by the intensity of the regulatory measures
adopted by host states,” and it acknowledged that Venezuela’s regulatory measures would
have created a “chilling effect” sufficient to deter any prospective investor. Id. 1111 753-
54. As such, in analyzing the Treaty’s instruction to value an expropriated asset at the time
“immediately before the expropriation or at the time the proposed expropriation became
public knowledge,” id. 11 756 (internal quotations omitted), the Tribunal reasoned that
“[t]he fair market value which the State must pay is that which an innocent, uninformed
third party would pay, having no knowledge of the State’s pre-expropriation (but post-
investment) policy toward the expropriated company and its sector,” id.8

There were six valuations proffered on the record. First, the “Investment Valuation”
assessed the value of Rusoro’s acquisitions and investments in Venezuela. This number
came to $ 774.3 million. Id. 11 763. Second, the “Adjusted lnvestment Valuation” revised
the “Investment Valuation” amount to account for the increase in the value of gold
internationally between the time of investment and the time of expropriation. Ia’. 11 764.
This inflated the $ 744.3 million number to $ 1.128 billion. Ia’. Third, the “Book
Valuation” reflected the net book value of Rusoro’s assets, totaling $ 908 million. Ia’. 11
766. Fourth, the “Maximum Market Valuation” reflected Rusoro’s peak stock market

valuation, $ 700.6 million, taken February 28, 2008. Id. 11 768. Fifth, the “Final Market

 

8 Because it had already concluded that Venezuela’s 2010 gold regulations violated the Treaty, the Tribunal
excluded the effect of those regulations from its valuation of Rusoro’s investment Id. 11 756.

Valuation” reflected the decline in market capitalization following Rusoro’s initial
investment in Venezuela. Id. 11 769. By this measure, Rusoro’s investment was $ 125.6
million. Id. Sixth, Rusoro’s expert, Brent Kaczmarek, calculated the value of Rusoro’s
expropriated assets to be $ 2.23 billion. See id. 11 770.

Ultimately, the Tribunal relied on only three of the six methods: the Maximum
Market Valuation, the Book Valuation, and the Adjusted lnvestment Valuation.9 ln
reaching the “genuine value” of the expropriated investment, the Tribunal assigned a
weight to each method. lt accorded 25% to the Maximum Market Valuation, 25% to the
Book Valuation, and 50% to the Adjusted lnvestment Valuation. Id. 11~789. The weight
assigned to each method reflected that method’s “strengths and shortcomings.” Ia’. For
example, the Maximum Market Valuation had the advantage of reflecting “no subjectivity
in its calculation,” based, as it was, on the stock market’s independent assessment Ia’. The
Maximum Market Valuation had a shortcoming, however: Rusoro achieved this marker for
only “a very short period, in mid[-]2008, three years before the date of the expropriation.”
la’. Similarly, the Book Valuation represented “a conservative criterion,” as it was taken
directly from Rusoro’s audited balance sheet, but did not account for increases in the price
of gold during the relevant time period or the “development of the mining properties” under
Rusoro’s control. Id. The Adjusted lnvestment Valuation received the most weight, 50%,
because it “reflect[ed] the value the investment would have reached on the date of

expropriation, simply as a direct consequence of the increase in the price of gold and of

 

9 The Tribunal rejected the remaining three methods: the lnvestment l\/lethod, id. 1111 772-76; the Final
Market Valuation, id. 1111 777-80; and Rusoro’s expert’s valuation, see id. 1111 781-86.

8

gold producing companies.” Ia’. When averaged and weighted, the Quantum for the
expropriated assets totaled approximately $ 966.5 million. Ia’. 11 790.

On October 10, 2016, Rusoro asked this Court to confirm the arbitral award. [Dkt.
# 1].

LEGAL STANDARD

The New York Convention, which is incorporated in the Federal Arbitration Act
(“FAA”), see 9 U.S.C. §§ 201-208,10 provides for “recognition and enforcement of arbitral
awards made in the territory of a State other than the State where the recognition and
enforcement of such awards are sought.” Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, art. l.1, openedfor signature June 10, 1958, 21 U.S.T. 2517
(“New York Convention”). Here, because the Award was made in France and enforcement
is sought in the United States, both of which are signatories to the New York Convention,
the confirmation is governed by the Convention. See Petition 11 49; U.S. Dep’t of State,
Treaties in Force: A List of Treaties and Other lnternational Agreements of the United
States in Force on January 1, 2007, § 2 at 12, available at
http://www.state.gov/documents/organization/89668.pdf.

As our Circuit has recognized, “consistent with the ‘emphatic federal policy in favor
of arbitral dispute resolution’ recognized by the Supreme Court[,] . . . the FAA affords the
district court little discretion in refusing or deferring enforcement of foreign arbitral

awards.” Belize Soc. Dev. Lta’. v. Gov’t ofBell'ze, 668 F.3d 724, 727 (D.C. Cir. 2012)

 

'° The Federal Arbitration Act permits any party to an arbitration under the Convention to seek confirmation
of the arbitral award in U.S. federal district court within three years of the award. See ia’. § 207.

9

(quoting Miz‘subl`shl` Motors Corp. v. Soler Chrysler~Plymouth, lnc., 473 U.S. 614, 631
(1985)). Courts “may refuse to enforce the award [brought under the New York
Convention] only on the grounds explicitly set forth in Article V of the Convention.”
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 935 (D.C. Cir. 2007) (quoting Yusaf
Ahmeal Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2d Cir. 1997)); See 9
U.S.C. § 207 (providing that the reviewing court “shall confirm the award” absent a basis
under the New York Convention for denying recognition or enforcement (emphasis
added)); Int’l Traa’l'ng & Ina’us. Inv. Co. v. DynCorp Aerospace Tech., 763 F. Supp. 2d 12,
19-20 (D.D.C. 2011) (collecting cases). Because “the New York Convention provides
only several narrow circumstances when a court may deny confirmation of an arbitral
award, confirmation proceedings are generally summary in nature.” DynCorp Aerospace
Tech., 763 F. Supp. 2d at 20 (citing Zez`ler v. Deitsch, 500 F.3d 157, 169 (2d Cir. 2007)).
“The party resisting confirmation-in this case, Venezuela_bears the heavy burden of
establishing that one of the grounds for denying confirmation in Article V applies.” Gola’
Reserve, lnc. v. Bolivarl`an Rep. ofVenez., 146 F. Supp. 3d 1 12, 120 (2015); see also Zeiler,
500 F.3d at 164; Ottley v. Schwartzl)erg, 819 F.2d 373, 376 (2d Cir. 1987) (“[T]he showing
required to avoid summary confirmation is high.”); Imperz`al Ethiopian Gov’t v. Baruch-
Foster Corp., 535 F.2d 334, 336 (5th Cir. 1976).
ANALYSIS

Mindful of the limited grounds under which it may challenge the Award, Venezuela

argues that the Tribunal exceeded the scope of its consent to arbitrate, rendering the Award

invalid. See Mot. to Dismiss at 11. Venezuela relies on Article V(l)(c) of the New York

10

Convention, which provides in relevant part that “[r]ecognition and enforcement of the
award may be refused . . . if . . . [t]he award deals with a difference not contemplated by or
not falling within the terms of the submission to arbitration.” Ia’. Venezuela principally
contends that the Tribunal’s use of valuations that predate September 16,2011, the date of
expropriation, exceeds the Tribunal’s jurisdictional writ. See Mot. to Dismiss at 2.

The jurisdictional analysis involves two steps. First, the Court must determine “the
amount of deference it should grant the Tribunal’s own determination of [the] scope [of its
jurisdiction], insofar as that question was itself delegated to the Tribunal.” Gola’ Reserve,
146 F. Supp. 3d at 121 (emphasis in original). Second, applying the appropriate measure
of deference (if any), this Court must decide “whether the Tribunal acted within its
permissible scope to arbitrate.” Ia'. For the following reasons, l conclude that the
Tribunal’s decision is entitled to substantial deference and that it ultimately acted well
within its permissible scope to arbitrate.

Deference Owed to Tribunal’s Determination of its Jurisdiction

The threshold question is whether, and to what extent, this Court owes deference to
the Tribunal’s determination of its jurisdiction to hear this dispute. There is a presumption
that courts review arbitral tribunals’ jurisdictional determinations de novo. See BG Group
PLC v. Rep. of Arg., 134 S. Ct. at 1206. This presumption may be overcome, however,
when both parties have clearly and unmistakably delegated the question of “arbitrability,”
z`.e., the question whether the parties agreed to arbitrate a particular dispute, to the arbitrator.
Fz'rst Optz`ons of Chicago, lnc. v. Kaplan, 514 U.S. 93 8, 944 (1995). When the parties have

committed the jurisdictional determination to the arbitrator, courts “should give

11

considerable leeway to the arbitrator, setting aside his or her decision [as to the scope of
his or her authority over the case at hand] only in certain narrow circumstances.” lal. at
943. As the Second Circuit has concluded, when the parties have delegated the arbitrability
issue to the arbitrator, the party resisting confirmation of the award “is not entitled to an
independent judicial redetermination of that same question.” Sclmeia'er v. Kz'nga’om of
Thailana’, 688 F.3d 68, 74 (2d Cir. 2012); see also Chevron Corp. v. Ecuaa’or, 795 F.3d
200, 208 (D.C. Cir. 2015); Oracle Am., Inc. v. Myriaa’ Grp. A.G., 724 F.3d 1069, 1074-75
(9th Cir. 2013); Petrofac, Inc. v. DynMcDermott Petroleum Operatl`ons Co., 687 F.3d 671,
675 (5th Cir. 2012); Green v. SuperShuttle Int’l, lnc., 653 F.3d 766, 769 (8th Cir. 2011);
Qualcomm Inc. v. Nokl`a Corp., 466 F.3d 1366, 1373 (Fed. Cir. 2006); Contec Corp. v.
Remote Sol., Co. Ltcl., 398 F.3d 205, 208 (2d Cir. 2005); Terminex Int’l Co., L.P. v. Palmer
Ranch Lta’. P’shz'p, 432 F.3d 1327, 1332_33 (11th Cir. 2005).

Here, the Treaty clearly assigns the question of arbitrability to the Tribunal. The
Governments of Canada and Venezuela agreed that arbitration proceedings would be
governed by the lCSlD Additional Facility Arbitration Rules. See Treaty, art. Xll.4(b).
Under the Treaty, when “either the disputing Contracting Party or the Contracting Party of
the investor, but not both, is a party to the lCSlD Convention,” the investor may submit
the dispute to arbitration under the Additional Facility Rules of lCSlD. See z'a’.ll The

Additional Facility Rules, in turn, expressly provide that “[t]he Tribunal shall have the

 

'l Canada is a party to the lCSID Convention. Venezuela is not a party to the Convention. See lCSID,
List of Contracting States and Other Signatories of the Convention (as of January 1 l, 2018), available at
https://icsid.worldbank.org/en/Documents/icsiddocs/List%200f%20Contracting%20States%20and%200t
her%20Signatories%200f%20the%20Convention%20-%20Latest.pdf.

12

power to rule on its competence.” Additional Facility Rules, art. 45(1), Petition, Ex. 5
[Dkt. # 1-6]. District Courts in our Circuit have consistently concluded that the BlT clearly
and unmistakably grants tribunals the power to determine their own jurisdiction. See
Crystallex, 244 F. Supp. 3d at 111-12; Gola’ Reserve, 146 F. Supp. 3d at 121~22.

As it did unsuccessfully in Crystallex, Venezuela seeks to refute this conclusion by
pointing to the position of the Attorney General of Canada in United Mexican States v.
Cargill, Inc., 2011 ONCA 622 (Can. Ont. C.A. 2011) [Dkt. # 16-4]. Even assuming it
would be proper to consider such extrinsic evidence, cf. Mumin v. Uber Techs., Inc., 239
F. Supp. 3d 507, 523-24 (E.D.N.Y. 2017), this Court’s conclusion would remain
unchanged 12

The Canadian Attorney General’s position, as the Court noted in Crystallex,
involved “a different case (Um'tea’ Mexl`can States v. Cargill, Inc.), before a different court
(a Canadian tribunal), based on a different bilateral investment treaty (NAFTA).” 244 F.
Supp. 3d at 113. Canada has taken no such position in this litigation. Cf. Sumitomo Shojl`
Am., ]nc. v. Avaglz'ano, 457 U.S. 176, 183 (1982) (describing Government of Japan’s
position in that case). Nor am l aware of any such position by the Government of Canada

concerning the BIT. Venezuela’s cases are not to the contrary: they uniformly involve

 

'2 Cargl`ll involved a petition to a Canadian court to set aside an arbitral award handed down pursuant to
the North American Free Trade Agreement (“NAFTA”) by a Toronto-based tribunal. See ia’. ln Cargill,
the Attorney General of Canada_not a party to the case_intervened at the appellate stage, filing a Factum
contending that (i) the “scope of damages” that a particular tribunal convened pursuant to NAFTA may
award was “a matter ofjurisdiction,” and (ii) that the Court of Appeal should review this jurisdictional
question for “correctness.” See Factum of the Attorney General of Canada, Cargill, 201 l ONCA 622 [Dkt.
# 16-5]. Venezuela likens the “correctness” standard to de novo review. l\/Iot. to Dismiss at 15-16.

13

positions taken by sovereign nations concerning the particular treaty at issue before the
Court. See, e.g., Abbott v. Abbott, 560 U.S. 1, 16-19 (2010).

Because the parties “clearly and unmistakably” agreed to arbitrate arbitrability, this
Court must, and will, give substantial deference to that decision, and will not “second-
guess[] the arbitrator’s construction of the parties’ agreement.” Gola' Reserve, Inc., 146 F.
Supp. 3d at 121 (quoting Parsons & Whittemore Overseas Co., lnc. v. Societe Generale a’e
l’Ina’ustrie Da Papier (RAKTA), 508 F.2d 969, 977 (2d Cir. 1974)). As such, this Court
will “give considerable leeway to the arbitrator, setting aside his or her decision only in
certain narrow circumstances.” First Options, 514 U.S. at 943.

Turning now to Venezuela’s challenges to the Tribunal’s damages calculation, the
Bolivarian Republic first asserts that the Tribunal improperly “valu[ed] Rusoro before the
date of expropriation.” Mot. to Dismiss at 19. l disagree. To be sure, the Maximum
Market Valuation, dated February 28, 2008, occurred more than three years prior to the
date of expropriation, and therefore fell outside the Treaty’s limitations period. But, as the
Award explained, this measure was not intended as a stand-in for the value on September
16, 201 1, the date of expropriation. The Maximum Market Valuation was simply one input
in the Tribunal’s calculation for the “genuine value” on September 16, 2011. lndeed,
although it had the virtue of objectivity, see Award 11789, the Maximum Market Valuation
predated the substantial, global increase in the price of gold_a trend that, under ordinary
economic conditions, would have increased Rusoro’s trading price, ia’. 11 764.

Venezuela also faults the Tribunal for its use of the Adj usted lnvestment Valuation,

criticizing that method of valuation, the disparity between the valuation and the actual

14

market capitalization on the date of expropriation, and the use of the price of gold to
increase the valuation. Mot. to Dismiss at 22_24. Venezuela similarly claims that the
Book Value fails to account for the economic restrictions imposed in 2009 and 2010. Ia’.
at 24_25. These are no more than disagreements as to the damages calculation, however,
and “courts have no authority to disagree with [the arbitrator’s] honest judgment in that
respect.” Rep. ofArgentina v. AWG Grp. Lta’., 211 F. Supp. 3d 335, 360 (D.D.C. 2016)
(quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36
(1987)). Curiously, Venezuela does not explain why the Tribunal’s chosen methods unduly
exceeded the scope of the Tribunal’s power to award damages. Perhaps it couldn’t !

lt is abundantly clear to this Court that the Tribunal, in its extensive damages
analysis, see Award 1111 634_855, did not exceed the scope of its authority under our
Circuit’s case law. As in Kanuth v. Prescott, Ball & Turben, lnc., “there is nothing on the
face of the panel’s lump-sum award which suggests that the panel failed to construe the
contract.” 949 F.2d 1175, 1182 (D.C. Cir. 1991). “To hold otherwise would require us to
inquire into precisely how and why the panel derived the lump-sum award, an inquiry
clearly outside of our limited review.” Ia’.; see also Contech Const. Proa’s., Inc. v. Heierli,
764 F. Supp. 2d 96, 110 (D.D.C. 2011) (holding that When examining an arbitration award
“it is particularly necessary to accord the ‘narrowest of readings’ to the excess of authority
provisions” (quoting Kanath, 949 F.2d at 1180)).

lndeed, were l to review the damages calculation a’e novo, as Venezuela would have
me do, l would still conclude that the Tribunal reached a reasonable quantum of damages,

acting well within the powers assigned to it by the BIT. Faced with the unenviable task of

15

assessing damages for assets in a national market subject to onerous regulations, and
relating to a singularly unique commodity, the Tribunal did a commendable job in reaching
its damages calculation. Thus, Venezuela having failed to identify any basis under the
New York Convention to deny confirmation of the Award, this Court will grant Rusoro’s
Petition, and confirm the Tribunal’s Award.
POSSIBLE STAY OF ENFORCEMENT

Having rejected Venezuela’s jurisdictional challenge, l will now turn to its claim
that this Court should stay enforcement pending the decision of the Court of Appeal in
Paris concerning the validity of the Award. Under the New York Convention, district
courts have discretion to stay proceedings where “a parallel proceeding is ongoing in the
originating country and there is a possibility that the award will be set aside.” Earopcar
Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310, 317 (2d Cir. 1998). lndeed, the
Second Circuit’s Europcar opinion sets out factors relevant to the decision whether to grant
a stay in these circumstances Ia’. at 317_18. Although our Circuit has not expressly
adopted the Europcar factors, courts in this district have repeatedly drawn on them in
determining when a stay of the enforcement of an arbitration award is appropriate See,
e.g., Chevron Corp. v. Rep. ofEcuaa’or, 949 F. Supp. 2d 57, 71-72 (D.D.C. 2013); Cont’l
Transfert Technique Lta’. v. Fea’. Gov’t ofNigeria, 697 F. Supp. 2d 46, 59-60 (D.D.C.
2010); G.E. Transp. S.P.A. v. Rep. ofAlbania, 693 F. Supp. 2d 132, 137-38 (D.D.C. 2010).
However, because “‘the adjournment of enforcement proceedings impedes the goals of
arbitration[,]’ . . . a stay of confirmation should not be lightly granted.” Chevron Corp.,

949 F. Supp. 2d at 71 (quoting Europcar, 156 F.3d at 317).
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Europcar instructs courts to consider:

(1) the general objectives of arbitration_the expeditious resolution of
disputes and the avoidance of protracted and expensive litigation;

(2) the status of the foreign proceedings and the estimated time for those
proceedings to be resolved;

(3) whether the award sought to be enforced will receive greater scrutiny in
the foreign proceedings under a less deferential standard of review;

(4) the characteristics of the foreign proceedings including (i) whether they
were brought to enforce an award (which would tend to weigh in favor of a
stay) or to set the award aside (which would tend to weigh in favor of
enforcement); (ii) whether they were initiated before the underlying
enforcement proceeding so as to raise concerns of international comity; (iii)
whether they were initiated by the party now seeking to enforce the award in
federal court; and (iv) whether they were initiated under circumstances
indicating an intent to hinder or delay resolution of the dispute;

(5) A balance of the possible hardships to the parties . . . ; and

(6) Any other circumstances that could tend to shift the balance in favor of
or against adjournment . . . .

156 F.3d at 317-318.

The first Earopcar factor, the expeditious resolution of disputes and the avoidance

of protracted and expensive litigation, weighs heavily in Rusoro’s favor. l\/lore than five
years have passed since Rusoro initiated arbitration proceedings; Rusoro prevailed before
the Tribunal; and Rusoro has yet to receive payment from Venezuela. Such circumstances
strongly militate against the entry of a stay. See, e.g., Gola’ Reserve, 146 F. Supp. 3d at
135; Chevron Corp., 949 F. Supp. 2d at 72; G.E. Transp. S.p.A., 693 F. Supp. 2d at 139.
Venezuela’s contention that enforcement might, depending on the outcome of the foreign

proceedings, simply beget more “protracted and expensive litigation,” Mot. to Dismiss at

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30, is unavailing in light of the extensive proceedings to date, and the goal of “immediate
satisfaction of arbitral awards” set out in the BIT, lCSlD Additional Facility Rules, and
New York Convention, Gola’ Reserve, 146 F. Supp. 3d at 135.

The second factor, the status of foreign proceedings and the estimated time for those
proceedings to be resolved, likewise weighs in Rusoro’s favor. lt is unclear when the
French appellate process will conclude, but, according to an uncontested statement in a
declaration attached to Rusoro’s Opposition, see Opp’n to Motion to Dismiss or, in the
Alternative, Stay (“Opp’n”), Decl. of Elie Kleiman 11 8 [Dkt. # 18-7], the Court of Appeal’s
decision is unlikely to be rendered prior to April of this year. l\/loreover, Venezuela may
appeal an adverse decision, thereby extending the foreign proceedings further still. Ia’.
With “no final resolution . . . imminent,” Gola’ Reserve, 146 F. Supp. 3d at 135, delaying
our own proceedings would unduly interfere with the federal policy of swift, decisive
resolution of arbitral proceedings, see Mitsubishi Motors Corp., 473 U.S. at 665 (“Like any
other mechanism for resolving controversies, international arbitration will only succeed if
it is realistically limited to tasks it is capable of performing well_the prompt and
inexpensive resolution of essentially contractual disputes between commercial partners.”).
Venezuela points out that French courts have set aside, in part or in whole, arbitral awards
on jurisdictional grounds. Mot. to Dismiss at 32. But Venezuela makes no mention of any
factual similarities between those disputes and the case at bar. This factor therefore favors
Rusoro.

Nor do the lesser Europcar factors fortify Venezuela’s motion for a stay. The third

factor, “whether the award sought to be enforced will receive greater scrutiny in the foreign

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proceedings under a less deferential standard of review,” militates only modestly in
Venezuela’s favor. Europcar, 156 F.3d at 317. Although the Paris Court of Appeal will
exercise a’e novo review, that court will set aside an award “on grounds narrower than those
of Article V of the New York Convention,” i.e., the applicable standard in this case, “and
Venezuela brings the same challenges before the Paris Court of Appeal that it does before
this Court.” Gola’ Reserve, 146 F. Supp. 3d at 135; see also Kleiman Decl. 11 5; 2d Decl.
of Thomas Bevilacqua 11 13 [Dkt. # 16-1].

The fourth factor, with' its four sub-factors, unequivocally supports Rusoro’s
position. Here, the (i) foreign proceeding (i.e., the appeal in France) was brought to set
aside an award, (ii) that appeal followed Rusoro’s filing of the instant action in this Court,
and (iii) those foreign proceedings were initiated by the party challenging the award. Last,
in considering whether “the foreign proceedings were intended to hinder or delay
resolution of the dispute,” without impugning Venezuela’s intentions, this Court notes that
the appellate process in France has delayed enforcement of the award. See Golcl Reserve,
146 F. Supp. 3d at 136.

So, too, with the fifth factor, the balance of hardships, and the sixth, “any other
[relevant] circumstances.” As to the balance of hardships, Rusoro has not received any
compensation from Venezuela, despite having had “virtually its entire business
expropriated by the Venezuelan state.” Opp’n at 35 (citing Award 11 652) (emphasis in
original). As this District Court concluded in Scz`ence Applications Int’l Corp. v. Hellenic
Rep., “a country with a treasury and all the resources [of] a government,” not to mention

the abundant natural resources it controls, stands in a better position than a private firm,

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particularly one, as here, practically devoid ofassets. 13 Civ. 1070 (GK), 2017 WL 65821,
at *4 (D.D.C. Jan. 5, 2017). Last, as to the sixth factor, l must note that the Bolivarian
Republic has refused voluntarily to satisfy any of the awards entered against it under the
Treaty following the nationalization of the gold industry. Opp’n at 35. What more need
one say !

ln sum, Europcar factors one and two-the ones relied on most heavily within our
Circuit_both favor Rusoro, and the totality of the other four factors collectively favor
Rusoro as well. As such, the Europcar analysis supports an immediate confirmation.

CONCLUSION

For the foregoing reasons, the Court DENIES Venezuela’s Motion to Dismiss
Petition and to Deny Confirmation of the Arbitral Award or, in the Alternative, to Stay,
GRANTS Rusoro’s Petition, and ORDERS confirmation of the Award. A separate order

consistent with this opinion will be issued this day.

_/' i
it 011-)1\¢5‘1&“`/\/

RICHARij“s-. 1LJEON
United States District Judge

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